Business Liability

  1. Jennifer, Martin, and Edsel form a limited liability company called Big Apple, LLC, to operate a bar in New York City. Jennifer, Martin, and Edsel are member-

managers of the LLC. One of Jennifer’s jobs as a member-manager is to drive the LLC’s truck and pick up certain items of supply for the bar each Wednesday. On the way

back to the bar on Wednesday after picking up the supplies for that week, Jennifer negligently runs over a pedestrian, Tilly Tourismo, on a street in Times Square.

Tilly is severely injured and sues Big Apple, LLC to recover monetary damages for her injuries. Who is liable? Why?

  1. Francis is a jewelry-maker who works out of his home. He wants to sell his jewelry, which is designed for his target market of preschool aged children, online.

Children appreciate his jewelry pieces because the pieces are colorful and are made of small parts such as beads, various silver findings, and tassels. Which business

organization form should Francis choose? Why?

  1. Mike, a managing member of Big House Realty, Corporation, often uses his company credit card for personal expenses like dry cleaning and new clothes. He insists

that these are business expenses because he must wear new clothes in order to show houses. Is Mike at risk of losing his liability protection? Why or why not?

Sample Solution