Asked by breana norris on Jun 15, 2024
Verified
Courts have held that even if a director of a company can prove that he or she acted in good faith,the director cannot be excused from liability.
Good Faith
Good Faith refers to an honest intention to act without taking an unfair advantage over another party, often assumed in the context of negotiations or business dealings.
Liability
A financial obligation or debt that an individual or company owes.
- Identify the legal duties and obligations of board members and corporate officers.
Verified Answer
BR
Brian ReyesJun 18, 2024
Final Answer :
False
Explanation :
Courts have recognized the concept of "business judgment rule," which provides a level of protection to directors who act in good faith and with reasonable care in making business decisions. Thus, if a director can prove that he or she acted in good faith and made an informed decision, the court may excuse the director from liability.
Learning Objectives
- Identify the legal duties and obligations of board members and corporate officers.
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