PJC Business

PJC 105.15

F RAUD AND N EGLIGENT M ISREPRESENTATION

PJC 105.15 Question on Defenses to Violation of Texas Securities Act—Buyer If you answered “Yes” to Question ______ [ 105.12 ], then answer the follow ing question. Otherwise, do not answer the following question. QUESTION ______ Do you find that Don Davis did not know, and in the exercise of reasonable care could not have known, of the untruth or omission found by you in your answer to Question ______ [ 105.12 ]? Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 105.15 submits one of the two affirmative defenses to liability for a securities violation. See Tex. Gov’t Code §§4008.052, 4008.053 (formerly Tex. Rev. Civ. Stat. art. 581–33A(2), 33B); Sterling Trust Co. v. Adderley , 168 S.W.3d 835, 843 (Tex. 2005); Williams v. Khalaf , 802 S.W.2d 651, 656 n.3 (Tex. 1990). PJC 105.14 submits the other defense. An affirmative answer to either question is a defense to lia bility. See Sterling Trust Co. , 168 S.W.3d at 843. To determine whether an issuer is entitled to this defense, see Tex. Gov’t Code §§ 4008.052, 4008.054 (formerly Tex. Rev. Civ. Stat. art. 581–33A(2), 33C). Broad-form submission. PJC 105.15 is a broad-form question designed to be accompanied by one or more appropriate instructions. Tex. R. Civ. P. 277 requires that “the court shall, whenever feasible, submit the cause upon broad-form questions.” Tex. R. Civ. P. 277; see Thota v. Young , 366 S.W.3d 678, 689 (Tex. 2012) (rule 277’s use of “whenever feasible” mandates broad-form submission in any or every instance in which it is capable of being accomplished).

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