...o high-dividend bonds or growth stocks. The trust instrument gives no special preference to either beneficiary. Which statement best describes Trustee's duty? This question tests the duty of impartiality. Uniform Trust C...
Citations: Uniform Trust Code section 803
...company that Settlor had worked for decades earlier. The stock had no special voting control and was easily marketable. For seven years, Trustee made no written investment plan, did not review Felix's income needs, and r...
Citations: NCBE MEE Subject Matter Outline, Trusts and Estates, Uniform Trust Code sections 804, 807, 1001, and 1002, Uniform Prudent Investor Act principles
...who merely watched. This essay tests affirmative duties arising from special relationships and voluntary undertakings. NCBE MBE Subject Matter Outline, Tor...
Citations: NCBE MBE Subject Matter Outline, Torts, Restatement (Second) of Torts, Restatement (Third) of Torts
A restaurant employee, without authority, ordered $12,000 of specialty wine in the restaurant owner's name. The next day, the owner learned the price, quantity, and supplier. He told the employee, "You had no right to do...
Citations: Restatement (Third) of Agency section 4.01
A consulting firm emailed a specialist, "We will hire you for our Denver project starting July 1. Move by then and we will cover your relocation expenses." The specialist accepted, declined another project, paid to break...
Citations: Restatement (Second) of Contracts 90, NCBE NextGen UBE Content Scope, Contracts
Seller, located in State C, sold specialized equipment to Buyer, located in State D. The contract stated, "This agreement and the rights and obligations of the parties are governed by State C law." It also stated, "Any c...
Citations: Conflict-of-laws principles, Contract choice-of-law principles
A corporation's articles limit director monetary liability to the fullest extent permitted by statute. A shareholder sues directors for an uninformed decision and separately sues one director for secretly taking a ven...
Citations: Model Business Corporation Act director-liability principles
Corporate officers receive repeated written warnings that a plant is violating safety regulations. They deliberately ignore the warnings because stopping production would reduce quarterly bonuses. Which fiduciary-duty...
Citations: General corporate fiduciary-duty principles
Trustee asked Beneficiary to sign a release approving Trustee's purchase of trust property. Trustee told Beneficiary the price was fair but did not disclose that Trustee was the buyer, that Trustee had obtained a lowe...
Citations: Uniform Trust Code section 1009
...n now." Which statement is most accurate? This question tests trustee duties to inform and account. Uniform Trust Code section 813
Citations: Uniform Trust Code section 813
A corporation considers a consulting contract with a company owned by one director's sibling. The interested director discloses the relationship and leaves the room before disinterested directors vote. Which statement...
Citations: Model Business Corporation Act conflicted-interest principles
A corporation is seeking expansion sites for its retail stores. A director learns through board materials that a prime site is available and leases it personally before telling the corporation. Which statement best de...
Citations: General corporate opportunity principles
A court finds that a corporate officer wrongfully diverted a contract opportunity that belonged to the corporation and earned $600,000 in profit from it. Which remedy is most likely available? The correct answer state...
Citations: General corporate opportunity principles
A director owns a warehouse company. Without disclosing that ownership, the director persuades the corporation to lease space from the warehouse company at above-market rent. Which fiduciary duty is most directly impl...
Citations: General corporate fiduciary-duty principles
A disinterested board studies three expansion options for several weeks, consults management and outside advisers, and selects one. The option later fails. Which statement best describes the directors' likely fiduciar...
Citations: General corporate fiduciary-duty principles
...without disclosure. Which statement is most accurate about fiduciary duties? The correct answer distinguishes managers from passive members in a manager-managed LLC. Revised Uniform Limited Liability Company Act princip...
Citations: Revised Uniform Limited Liability Company Act principles
...sure? The correct answer captures the limited but important fiduciary duties of controlling shareholders. NCBE July 2019 MEE controlling-shareholder analysis
Citations: NCBE July 2019 MEE controlling-shareholder analysis
A trust instrument states, "Trustee is not liable for mistakes in judgment made in good faith." Trustee later intentionally hides a conflict of interest and transfers trust assets to a business Trustee owns. Beneficia...
Citations: Uniform Trust Code section 1008
A trust was funded almost entirely with stock in one public company. The trust instrument did not direct retention of the stock. For four years, Trustee kept the entire position without reviewing the beneficiaries' ne...
Citations: Uniform Trust Code section 804, Uniform Prudent Investor Act principles
Before approving a financing plan, directors rely on a report from the corporation's CFO and advice from outside counsel. The directors have no reason to doubt either source. Which statement best describes reasonable...
Citations: Model Business Corporation Act director standards
...permits outside businesses and that passive members owe no fiduciary duties themselves. Is Rina likely liable for breach of fiduciary duty? Discuss the LLC fiduciary-duty issues and the effect of the operating agreement...
Citations: Revised Uniform Limited Liability Company Act principles, NCBE MEE Business Associations outline
FreshPath Foods, Inc. sells packaged meals to grocery stores. Over 18 months, its quality-control director sent the CEO and board audit committee five written reports stating that one plant was shipping meals without...
Citations: General corporate fiduciary-duty principles, Model Business Corporation Act director-liability principles
HarborMed, Inc. develops software for hospital scheduling. Its chief technology officer, Dana, was asked by the board to explore partnerships with rural hospital networks. During that work, Dana learned that North Rid...
Citations: NCBE MEE Business Associations outline, General corporate fiduciary-duty principles
Oak & Iron, Inc. is a closely held corporation with three shareholders. Ana owns 60%, Ben owns 25%, and Cara owns 15%. For ten years, all three worked for the corporation and received modest salaries plus annual divid...
Citations: General controlling-shareholder fiduciary-duty principles, NCBE MEE Business Associations outline
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