In Litigation Involving a Promoter,one of the Parties Named in a Contract

question 56

Multiple Choice

In litigation involving a promoter,one of the parties named in a contract is described as an entity yet to be incorporated.Any statutory protections from contractual liability available to a promoter have been strictly construed by the courts.Accordingly,in these circumstances,the promoter will be bound by personal liability in the eyes of a court finding the absence of which of the following?

• A) A specific advantage of a valuable business opportunity exists.
• B) A specific provision expressly relieves such liability.
• C) The corporation has committed a crime
• D) The directing mind has committed a crime

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Definitions:

Implied

Something suggested or indicated, though not expressly stated.

Internal Revenue Service

The U.S. government agency responsible for the collection of taxes and enforcement of tax laws.

Expressed Powers

Specific powers granted to the government or its branches explicitly mentioned in a constitution, particularly the United States Constitution.

Confederal System

A form of government where power is distributed among several independent states, which retain full control over their internal affairs but cooperate on certain issues.