Which of the following is NOT an example of a situation that could lead to unlimited liability for EAN Holdings?

Unlimited liability refers to a situation where an individual or entity is fully responsible for all obligations and debts, potentially exposing personal assets to fulfill those liabilities. In a business context, this can arise from various situations involving negligence or misconduct that exceed normal operational risks.

In the context of EAN Holdings, negligent entrustment, gross negligence related to vehicle defects, and false arrest can lead to unlimited liability because they reflect a serious breach of responsibility that could directly harm others. For instance, negligent entrustment occurs when a business irresponsibly provides a vehicle to someone unfit to operate it, leading to accidents and liabilities. Similarly, gross negligence involving a vehicle defect may result in severe accidents, making the company liable for damages. False arrest may also subject the company to significant claims if it unlawfully detains someone, indicating a serious lapse in judgment or procedure.

However, minor traffic violations typically do not rise to the level of negligence or misconduct that exposes a business to unlimited liability. These violations, while they can lead to fines or penalties, generally fall under the realm of infraction and are not considered severe enough to impact the financial standing of the corporation or lead to personal asset exposure. Thus, minor traffic violations are much less likely to result in unlimited liability compared