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Patty Owned a Sole Proprietorship

Question 45

Multiple Choice

Patty owned a sole proprietorship.She had four salespersons selling the company's products.One of her salespersons made false statements about a competitor's products while trying to sell Patty's products.The competitor sues Patty's business and wins the lawsuit.Under what circumstances could Patty be personally responsible to pay the judgment?


A) none,because this was a debt of the business
B) if Patty was separately named in the lawsuit
C) if Patty knew about the salesperson's activities
D) if the salesperson's activities were part of a continuing pattern rather than an isolated incident
E) Patty is liable here regardless of any other circumstances.

Correct Answer:

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