The Judge's Review of the Evidence Confirmed the Parties Did

question 9

Multiple Choice

The judge's review of the evidence confirmed the parties did not indicate who they intend to be liable if their contemplated new corporate entity fails to come into existence. In which of the following circumstances is such a finding likely to be most problematic?

• A) in a pre-incorporation contract
• B) if the identification theory applies
• C) where the contract is in writing
• D) if there is criminal liability

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Definitions:

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.