Stephen Set Up a Film Production Company in Partnership with Hilary.The

Multiple Choice

Stephen set up a film production company in partnership with Hilary.The company has never made a successful film,and,as such,their only asset is their camera,worth $20 000.Thinking that their new film will be a success,Stephen signs a contract with Brad Pitt,despite Hilary's protests,promising to pay him $1 million or 5% of the profits of the film,whichever is higher.The film is a flop and now they can't afford to pay Brad.Which of the following is true?

A) If Brad sues,they will only be liable up to the value of the company's assets.
B) If Brad sues,only Stephen will be personally liable because he set up the contract.
C) If Brad sues,Stephen and Hilary will be jointly and severally liable.
D) If Brad sues,the company will not be liable because Stephen broke his fiduciary duty.
E) If Brad sues,the company is vicariously liable if Stephen is also an employee.