ACC 241 – Final Exam Study Questions and Legal Liability Concepts (Verified)

Description: This ACC 241 final exam study set includes verified and updated questions with answers. It covers key business law topics such as agency liability, contracts, consideration, promissory estoppel, partnership obligations, LLC liability, shareholder rights, and the business judgment rule. The document also explains contract formation, offer and acceptance rules, and settlement agreements. It provides a complete review for final exam success. Agent isn't liable as long as... - answerPrinicpal is fully disclosed If a principal is partially disclosed: - answerBoth agent and principal are liable If a principal is undisclosed - answerBoth agent and principal can be liable The principal is undisclosed. Who is going to be liable if this contract is breached? - answerBoth agent and principal could be liable Principal hires a minor to make contracts on behalf of the principal. When the contract goes bad, principal tries to get out of it by saying that the agent was a minor, so principal should not be held liable. Is the principal liable? - answerYes, principal still liable If the principal Page1 authorizes an agent to do something when the person isn't supposed to be an agent, is the principal still liable? - answerYes Is a principal still bound to contracts entered into by an agent if the agent is a minor? - answerYes A is a general partner. A debt comes due that the partnership can't pay. Is A liable for it? - answerYes, personally liable Are general partners personally liable for debts and obligations of the partnership? - answerYes Liability in LLCs - answerMembers have complete liability shield Liability in general partnerships - answerMembers are personally liable for debts and obligations A is part of an LLC. Which debts and obligations is A liable for? - answerNone Preferred vs Common Shareholders - answerCommon shareholders get right to vote Pros and cons of common shareholders - answerPros- right to vote Cons- after Pref Shareholders in distributions Pros and cons of preferred shareholders - answerPros- receives dividends and dissolution first Cons- no right to vote Shareholder Derivative Action - answerWhen someone has harmed a company and the company hasn't done anything- a shareholder can stand in place of the company and sue that person on behalf of a company AFTER they have made demand for action What is a prerequisite before someone can file shareholder derivative action? - answerHAVE TO MAKE DEMAND OF THE CORPORATION OR BOARD OF DIRECTORS TO TAKE ACTION Business Judgment Rule - answerIf a Board of Director member makes a bad decision, but it is an honest mistake of Page2 judgment (did due diligence), does not violate duty of care. A is on the board of directors. She attends meetings, does research, etc. and makes a bad decision. Is she liable? Did she violate Duty of Care? Why or why not? - answerNo, under Business Judgment Rule Quorum voting rules- how many constitutes a quorum? how many do you need to pass? - answerA quorum is OVER 50% of shares. Majority required to pass- over 50% A BOD has 13 people. If they want to start the meeting, how many have to show up? - answer7 people A BOD has 13 people. 7 people show up. How many have to approve a measure for it to pass? - answer4 people A BOD has 13 people. Minimum amount that need to approve a measure for it to pass? - answer4 people Elements of implied-in-fact contract: - answerPerson A furnishes goods or service to Person B Person A expected to be paid Pers B knew or reasonably should have known that Person A expected to be paid B had chance to reject goods/services but did not Offers are effective when? - answerOnce received Offeror can revoke offer when? - answerany time up until acceptance Acceptance is valid when? - answerWhen sent How to terminate an offer - answerofferor revokes it before it is accepted offeree rejects it Rejection is valid when? - answerWhen received Revocation is valid when? - answerWhen received Options contract - answerOfferor promises to keep option open in exchange for consideration A says I want to sell you my car, think about it for a few days, I'll leave the offer open. Can A revoke the offer? - answerYes, no consideration provided Everything with offers is effective ______, except for _____, which are valid _____ -