Practice question
A customer buys an ordinary software package solely to use it in her own business. The seller promises no investment return, pooled enterprise, or participation in its profits. Does payment of the price alone establish an investment contract?
- Yes, because every payment is an investment contract
- Yes, because all software is a security
- No, because payment alone does not establish the remaining investment-contract elements
- No, because electronic products can never be connected with securities
- Yes, because the seller hopes to earn a profit
Legal references
- RA8799, Securities Regulation Code, Section3.1: https://lawphil.net/statutes/repacts/ra2000/ra_8799_2000.html
- Power Homes Unlimited v. SEC, GR164182, February26 2008, main decision: https://lawphil.net/judjuris/juri2008/feb2008/gr_164182_2008.html
- SEC v. Prosperity.Com, GR164197, January25 2012, main decision: https://lawphil.net/judjuris/juri2012/jan2012/gr_164197_2012.html
Answer this question in flashcards to review your response and continue practicing.