PJC Business 2024

P IERCING THE C ORPORATE V EIL

PJC 108.5

PJC 108.5

Instruction on Evasion of Existing Legal Obligation

PJC 108.5A Instruction on Evasion of Existing Legal Obligation in Cases Governed by Tex. Bus. Orgs. Code § 21.223(a)(2)

Don Davis used [ name of corporation ] as a means of evading an existing legal obligation for the purpose of perpetrating and did perpetrate an actual fraud on Paul Payne primarily for the direct personal benefit of Don Davis .

[or]

PJC 108.5B Instruction on Evasion of Existing Legal Obligation in Cases Not Governed by Tex. Bus. Orgs. Code § 21.223(a)(2) Don Davis used [ name of corporation ] as a means of evading an existing legal obligation, and holding only [ name of corporation ] responsible would result in injustice.

[or]

COMMENT

When to use. PJC 108.5 should be used as an instruction accompanying the ques tion in PJC 108.1 if it is alleged that a defendant used a corporation to evade an exist ing legal obligation. Use PJC 108.5A in those contract-related matters governed by Tex. Bus. Orgs. Code §21.223(a)(2) and PJC 108.5B in other matters. For additional discussion on section 21.223(a)(2), see PJC 108.2. Use of “or.” If used with other instructions (see PJC 108.3–108.4 and 108.6– 108.8), PJC 108.5 must be followed by the word or , because a finding of any one of the theories for disregarding the corporate fiction defined in the instructions would support an affirmative answer to the question. “Actual fraud,” “direct personal benefit,” and “injustice.” See PJC 108.2 for cases discussing these terms.

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