Which of the Following Is True Regarding Isaiah's Plan to Rely

question 53

Multiple Choice

Which of the following is true regarding Isaiah's plan to rely on the due diligence defense?

• A)He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the prospectus had they reviewed it with due diligence.
• B)He will be able to do so if he can establish that the purchasers would have had reasonable grounds to question either the registration statement or the prospectus had they reviewed them with due diligence.
• C)He will not be able to use that defense unless he can establish that he reviewed the registration statement and the prospectus,and had reasonable grounds to believe that the registration statement was accurate with no omission of material facts.
• D)He will not be able to rely on that defense because he is an issuer.
• E)He will be able to do so only if he can establish that the purchasers would have had reasonable grounds to question the registration statement had they reviewed it with due diligence.

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Definitions:

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.

Strict Liability

A legal principle holding an individual or entity responsible for damages or injuries caused by their actions or products, regardless of negligence or intent.

Implied Warranty

An unwritten guarantee that the product or service being sold is fit for its intended purpose.

Express Warranty

A promise or guarantee made by a seller about the quality, function, or performance of a product, explicitly stated in the contract or sales agreement.