Topic 3

gerard fauria
Quiz by gerard fauria, updated more than 1 year ago
gerard fauria
Created by gerard fauria about 2 years ago
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Topic 3 test

Resource summary

Question 1

Question
What is the key concern in cases after Salomon v Salomon?
Answer
  • Whether companies have separate legal personality
  • Whether companies are duly incorporated
  • Whether the controlling member tries to evade personal liabilities

Question 2

Question
The corporate veil will be pierced if the parent company owns all shares in a subsidiary.
Answer
  • True
  • False

Question 3

Question
In what context of consequences of a company's separate legal personality would you find Lee v Lee's Air Farming?
Answer
  • Company owns its own property
  • Legal proceedings (company sues and is sued in its own name)
  • Separate focus for contract (company enter into contracts into its own account)

Question 4

Question
What is the outcome of Persad v Singh?
Answer
  • Piercing the veil not accepted even when the owner tries to avoid personal liability.
  • Piercing the veil only if the owner tries to avoid personal liability.
  • Piercing the veil can be justified when a relationship of agency exists between the company and one of its controlling members.

Question 5

Question
A statutory provision can vary the general rule of separate legal personality (i.e. pierce the veil) in pursuit of other policy objectives.
Answer
  • True
  • False

Question 6

Question
Under which of the following circumstances we won't consider a company is an agent of a controlling member and, thus, the court pierces the veil?
Answer
  • If there are unusual circumstances raising a clear presumption that such agency relationship exists.
  • Where an express agency agreement is enforced.
  • Where there is a presumed resulting agency which is not rebutted.

Question 7

Question
For a member to directly accept liability as a guarantee he only needs to fill a legal form (under Statute of Fraus 1677 s.4), which must be written and signed by or on behalf of the guarantor.
Answer
  • True
  • False

Question 8

Question
Why did the Court decide to pierce the veil in the Petrodel v Prest case?
Answer
  • Unusual circumstances raising clear presumption of agency.
  • Prest directly accepted liability as a guarantee.
  • Presumed resulting trust which was not rebutted.
  • Unusual circumstances raising clear presumption of trust.

Question 9

Question
A parent company will never be jointly or vicariously liable for the torts attributable to its subsidiary.
Answer
  • True
  • False

Question 10

Question
Which of the following does not apply to the narrow scope of the court's special power to pierce the veil?
Answer
  • Combat fraud
  • Prevent abuse by the company
  • Penalize unconscionable behaviour

Question 11

Question
What principle can explain the outcomes of Gilford Motor v Horne; and Jones v Lipman?
Answer
  • Evasion
  • Concealment
  • Resulting trust

Question 12

Question
The concealment principle involves piercing the veil.
Answer
  • True
  • False

Question 13

Question
For a legal proceeding to be brought against an overseas company and its UK-based parent in UK courts there are 2 requirements: i) C establishes that there is an [blank_start]arguable[blank_end] case against at least one UK-based party ([blank_start]anchor[blank_end] defendant); ii) C has been affected by the activities of its overseas subsidiary.
Answer
  • arguable
  • anchor

Question 14

Question
What case seems to open the doors to accept guidelines from the parent company as a means of assuming responsibility over the subsidiary?
Answer
  • AAA v Unilever
  • Okpabi v Royal Dutch Shell
  • Lungowe v Vedanta Resources plc
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