Mitch Takes His Two Best Suits to Quality Cleaners and Receives

question 12

Multiple Choice

Mitch takes his two best suits to Quality Cleaners and receives a ticket as a receipt.Quality tells Mitch his suits will be cleaned and will be ready to be picked up on Monday.Another customer overhears the exchange and early on Monday goes to Quality,convinces the worker he is Mitch but that he has lost his receipt.He identifies and retrieves the suits,which happen to fit him perfectly too.Quality Cleaners

• A)is strictly liable to Mitch for the suits.
• B)is liable to Mitch only if Mitch can prove Quality was grossly negligent.
• C)has no liability unless Mitch proves Quality did not use ordinary care.
• D)will avoid liability if the receipt contained an exculpatory clause excluding gross negligence.

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Definitions:

Preferred Shares

Preferred shares represent ownership in a company with preferential rights to dividends and assets upon liquidation, compared to common shares.

Doctrine of Ultra Vires

A principle stating that actions taken by a corporation that are beyond its legal power or authority are invalid.

Duty of Loyalty

An obligation to act in the best interest of another party, typically in fiduciary relationships.

Corporate Opportunity

A legal doctrine that prohibits directors, officers, and controlling shareholders of a corporation from taking a business opportunity for themselves that rightfully belongs to the corporation.