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MMLU-Pro / 1918 / A bank loaned a company …

Problem

Answer published by the source. Consult the official source to check your work against its answer.

question

A bank loaned a company $1,500,000 for the manufacture of a widget control system. As a condition of the loan, a majority shareholder in the company agreed in writing to personally guarantee the loan. Thereafter, the company defaulted on the loan and entered into a repayment agreement with the bank. This agreement provided that the bank would "use maximum efforts in selling the company's assets at the highest possible price. " The bank proceeded to sell the company's assets, discharging the indebtedness of the widget company. Later, it was ascertained that the bank did not realize the "highest possible price" in administering the sale of the company's assets. Consequently, the shareholder was forced into bankruptcy and lost her entire investment in the company. The shareholder brings an appropriate action against the bank to recover her investment in the company. She will most likely

category

law

options

  1. prevail, because the bank's inability to get the highest possible price directly resulted in the shareholder's bankruptcy.
  2. prevail, because the bank did not act in the best interest of the shareholder.
  3. not prevail, because the shareholder agreed to personally guarantee the loan.
  4. prevail, because the bank breached its fiduciary duty to the shareholder under the terms of the contract between the bank and the company.
  5. not prevail, because the bank's sale of the company's assets discharged whatever contractual relationship existed between the shareholder and the bank.
  6. prevail, because the bank did not use maximum efforts in selling the company's assets.
  7. prevail, because the bank did not realize the highest possible price from the sale of the cornpany's assets.
  8. not prevail, because the shareholder was an incidental beneficiary of the bank's sale of the company's assets.
  9. not prevail, because the bank has the right to sell the company's assets as it sees fit.
  10. not prevail, because the bank was only required to use maximum efforts, not necessarily achieve the highest possible price.

src

ori_mmlu-professional_law

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Source and history

upstream_id / Original problem ID
1918
task_id
2afdda96-b0a9-529d-bb16-e59dfa8b9cf8
task_key
default--test--1918
task_revision_id
1
config / split
default / test

Official source

initial import