LEGL 2700 Test 3 Epstein UGA
Questions and Answers | Latest Update |
2024/2025 | Graded A+
What is the business judgment rule?
✔✔ The business judgment rule protects corporate directors from liability for decisions made in
good faith and with reasonable care, even if the decisions turn out poorly.
What does piercing the corporate veil involve?
✔✔ Piercing the corporate veil involves holding shareholders personally liable for a
corporation's debts or actions, typically when the corporate entity is abused or misused.
What is breach of fiduciary duty in a corporate setting?
✔✔ Breach of fiduciary duty occurs when a corporate officer or director fails to act in the best
interests of the corporation, violating their obligation of loyalty and care.
What is insider trading?
✔✔ Insider trading refers to the illegal buying or selling of securities based on non-public,
material information about the company.
1
,What is the duty of loyalty for corporate officers?
✔✔ The duty of loyalty requires corporate officers to act in the best interest of the corporation,
avoiding conflicts of interest and self-dealing.
What is a class action lawsuit?
✔✔ A class action lawsuit allows a group of individuals with similar claims to sue collectively
as a single party against a defendant.
What does arbitration involve in dispute resolution?
✔✔ Arbitration is a method of resolving disputes outside the court system where an impartial
arbitrator makes a binding decision.
What is mediation in the context of dispute resolution?
✔✔ Mediation is a process where a neutral third party facilitates communication between
disputing parties to help them reach a mutually acceptable agreement.
What is limited liability for business owners?
2
,✔✔ Limited liability protects business owners by ensuring they are not personally responsible
for the business's debts or liabilities beyond their investment in the company.
What does duty of care entail for corporate directors?
✔✔ The duty of care requires corporate directors to make informed and prudent decisions for the
corporation, exercising the care that a reasonably prudent person would in similar circumstances.
What is a partnership agreement?
✔✔ A partnership agreement is a formal document outlining the terms and conditions of a
partnership, including each partner’s rights, duties, and profit-sharing arrangements.
What is unjust enrichment?
✔✔ Unjust enrichment occurs when one party benefits unfairly at the expense of another, often
leading to a legal remedy to restore fairness.
What is executive compensation?
✔✔ Executive compensation refers to the financial remuneration and benefits provided to top
executives of a corporation, including salaries, bonuses, and stock options.
3
, What is the purpose of disclosure requirements for public companies?
✔✔ Disclosure requirements ensure that public companies provide accurate and comprehensive
information to shareholders and regulators, promoting transparency and accountability.
What is compensatory damages?
✔✔ Compensatory damages are monetary awards intended to compensate a plaintiff for actual
losses and damages suffered due to another party's wrongful actions.
What is federal preemption?
✔✔ Federal preemption occurs when federal law overrides or supersedes state law in areas
where the federal government has exclusive authority.
What does constructive dismissal refer to in employment law?
✔✔ Constructive dismissal happens when an employee resigns due to the employer's significant
breach of contract or failure to provide a suitable work environment.
What is vicarious liability in tort law?
✔✔ Vicarious liability holds an employer or principal legally responsible for the negligent
actions of an employee or agent performed within the scope of their duties.
4
Questions and Answers | Latest Update |
2024/2025 | Graded A+
What is the business judgment rule?
✔✔ The business judgment rule protects corporate directors from liability for decisions made in
good faith and with reasonable care, even if the decisions turn out poorly.
What does piercing the corporate veil involve?
✔✔ Piercing the corporate veil involves holding shareholders personally liable for a
corporation's debts or actions, typically when the corporate entity is abused or misused.
What is breach of fiduciary duty in a corporate setting?
✔✔ Breach of fiduciary duty occurs when a corporate officer or director fails to act in the best
interests of the corporation, violating their obligation of loyalty and care.
What is insider trading?
✔✔ Insider trading refers to the illegal buying or selling of securities based on non-public,
material information about the company.
1
,What is the duty of loyalty for corporate officers?
✔✔ The duty of loyalty requires corporate officers to act in the best interest of the corporation,
avoiding conflicts of interest and self-dealing.
What is a class action lawsuit?
✔✔ A class action lawsuit allows a group of individuals with similar claims to sue collectively
as a single party against a defendant.
What does arbitration involve in dispute resolution?
✔✔ Arbitration is a method of resolving disputes outside the court system where an impartial
arbitrator makes a binding decision.
What is mediation in the context of dispute resolution?
✔✔ Mediation is a process where a neutral third party facilitates communication between
disputing parties to help them reach a mutually acceptable agreement.
What is limited liability for business owners?
2
,✔✔ Limited liability protects business owners by ensuring they are not personally responsible
for the business's debts or liabilities beyond their investment in the company.
What does duty of care entail for corporate directors?
✔✔ The duty of care requires corporate directors to make informed and prudent decisions for the
corporation, exercising the care that a reasonably prudent person would in similar circumstances.
What is a partnership agreement?
✔✔ A partnership agreement is a formal document outlining the terms and conditions of a
partnership, including each partner’s rights, duties, and profit-sharing arrangements.
What is unjust enrichment?
✔✔ Unjust enrichment occurs when one party benefits unfairly at the expense of another, often
leading to a legal remedy to restore fairness.
What is executive compensation?
✔✔ Executive compensation refers to the financial remuneration and benefits provided to top
executives of a corporation, including salaries, bonuses, and stock options.
3
, What is the purpose of disclosure requirements for public companies?
✔✔ Disclosure requirements ensure that public companies provide accurate and comprehensive
information to shareholders and regulators, promoting transparency and accountability.
What is compensatory damages?
✔✔ Compensatory damages are monetary awards intended to compensate a plaintiff for actual
losses and damages suffered due to another party's wrongful actions.
What is federal preemption?
✔✔ Federal preemption occurs when federal law overrides or supersedes state law in areas
where the federal government has exclusive authority.
What does constructive dismissal refer to in employment law?
✔✔ Constructive dismissal happens when an employee resigns due to the employer's significant
breach of contract or failure to provide a suitable work environment.
What is vicarious liability in tort law?
✔✔ Vicarious liability holds an employer or principal legally responsible for the negligent
actions of an employee or agent performed within the scope of their duties.
4
