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corporations as a shield against personal liability

1. Whenever the agent's duties to the principal conflict with the agent's own interests:

A) the agent automatically is regarded as having breached the duty of loyalty.

B) the agent must disclose such fact to the principal, or be in violation of the duty of loyalty.

C) there is no duty of disclosure if the agency is gratuitous.

D) the agent must resign immediately.

2. A person who commits a crime under instructions from her principal:

A) is relieved from liability if committed within the scope of employment.

B) is guilty of the crime because the agent's duty to society overrides the duty to follow the direction of the principal.

C) is relieved from liability because newly revised criminal codes will almost always impose liability on the principal.

D) is deemed to be a minor.

3. Which form of business organization most limits personal liability for its investors or participants?

A) Sole proprietorship.

B) General partnership.

C) Corporation.

D) They all share this attribute equally

Solution Preview

Hi there -
For your first question, whenever the agent's duties to the principal conflict with the agent's own interests, I believe the best answer is:
B) the agent must disclose such fact to the principal, or be in violation of the duty of loyalty.
The agent owes the ...

Solution Summary

This job shows how to deal when an agent's duties to the principal conflict with the agent's own interests.

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