CT Bar Business Organizations & Contracts 4

Question 1

A corporate director approves a transaction in which she has a personal financial interest. Under Connecticut law, what is the best way to ensure the transaction is not voidable?

Accepted Answer

Disclose the interest and obtain approval of a majority of disinterested directors or shareholders

Answer

Connecticut law allows interested director transactions if the director discloses the interest and disinterested directors or shareholders approve the transaction in good faith.

Question 2

Which of the following is a valid basis for rescinding a contract under Connecticut law?

Accepted Answer

Mutual mistake of fact going to the essence of the contract

Answer

A mutual mistake about a basic assumption on which the contract was made, materially affecting the agreed exchange, is grounds for rescission.

Question 3

Under Connecticut's Business Corporation Act, what is the minimum number of directors required for a Connecticut corporation's board of directors?

Accepted Answer

One director

Answer

Connecticut permits a corporation to have a board of directors consisting of as few as one director.

Question 4

A third-party beneficiary seeks to enforce a contract between two other parties. What must the third party demonstrate?

Accepted Answer

The contracting parties intended to benefit her directly

Answer

An intended third-party beneficiary has enforceable rights only if the parties to the contract intended to confer a direct benefit on that third party.

Question 5

An LLC member in Connecticut wants to withdraw from the company. The operating agreement is silent on withdrawal rights. Under Connecticut's LLC Act, the member:

Accepted Answer

May withdraw at will but is not entitled to a buyout as a matter of right

Answer

Connecticut's LLC Act allows a member to dissociate but does not automatically entitle the member to a buyout unless the operating agreement or the statute's specific provisions so provide.

(CT Bar) Connecticut Bar Exam Practice Test

(CT Bar) Connecticut Bar Exam Practice Test

CT Bar Business Organizations & Contracts 4