1. Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a
franchise under the Jumbo Juice trade name as a member of a select
group of dealers that engage in retail juice sales. To potential investors,
the franchisor must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
1. Simone is a manager of Rolling Hills Resort LLC, a limited
liability company. Rolling Hills is formed in a state that does not explicitly
create fiduciary duties for LLC managers but does require the exercise of
good business judgment. Unless a court rules otherwise, Simone owes
fiduciary duties to
a. Rolling Hills’s members.
b. Rolling Hills’s suppliers.
c. Rolling Hills’s customers.
d. none of the choices.
1. First Editions, Inc., a book dealer based in Texas, does business in all
fifty states exclusively online. According to a decision of the United
States Supreme Court, for an individual state to compel an out–of-state
business to collect and remit state taxes, the business must have in
that state
a. a substantial physical presence.
b. a potential marketing base.
c. an accessible Web site.
d. a party paid to solicit business for its products.
1. Ilya is an officer with Jetspeed, Inc. Ilya is in a position to
acquire assets that would benefit Jetspeed if acquired in its name. Ilya’s
usurping this opportunity may violate the duty of
a. acting in one’s own interest.
b. agency.
c. care.
d. loyalty.
1. Rea, an officer with Sel-Mart Company, misappropriates the firm’s
property through fraud. Later, Rea and Sel-Mart agree to a mutual
release of claims. Still later, Sel–Mart discovers Rea’s fraud and files a
suit to recover the misappropriated property. Most likely, the court will
rule that Rea
a. breached her duty of loyalty by failing to disclose her misconduct.
b. is not liable due to Rea’s duty to act in her own self-interest.
c. is not liable due to Sel-Mart’s failure to timely discover the fraud.
d. is not liable due to the mutual release of claims.