Jacqui and Penny Decided to Go into Partnership in a Small

question 77

Multiple Choice

Jacqui and Penny decided to go into partnership in a small baseball equipment manufacturing firm.Jacqui raised $250,000 in start-up funds,in large part on the basis of documents that she forged.These documents purported to show that Jacqui and Penny owned their factory,when in fact they merely leased it.Jacqui spent all of the money on herself,and she now has no assets and has been jailed for 10 years.The creditors have contacted Penny and told her they will hold her liable for the loss.

• A)Since she was unaware of Jacqui's fraudulent actions,Penny cannot be successfully sued by the creditors.
• B)Since Penny is Jacqui's partner,she is vicariously liable for this fraud.
• C)Penny is both civilly and criminally liable for Jacqui's behaviour.
• D)Since they should have verified independently everything that they were told by Jacqui,the creditors must bear their own losses.
• E)Penny can successfully argue volenti non fit injuria in her own defence.

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Definitions:

Diabetes Insipidus

A disorder marked by an imbalance of water in the body, leading to intense thirst and the production of large amounts of urine.

ADH

Antidiuretic hormone, a peptide hormone that regulates the amount of water reabsorbed by the kidneys.

Aldosterone

A steroid hormone produced by the vertebrate adrenal cortex; stimulates sodium reabsorption. See mineralocorticoids.

Ammonia

A compound of nitrogen and hydrogen with the formula NH3, commonly used as a fertilizer and in various industrial processes.