The __________ Precludes Imposing Liability on Directors and Officers for Honest

question 71

Multiple Choice

The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.

• A) business judgment rule.
• B) duty of diligence.
• C) duty of obedience.
• D) None of these is correct.

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Definitions:

Misrepresentation

The act of presenting false or misleading statements that lead someone to enter into a contract under mistaken understanding.

Contract

A legally enforceable agreement between two or more parties with mutual obligations.

Set Aside

A legal term that refers to the court's power to invalidate or annul a decision or action.

Induced

The act of being led or moved by persuasion or influence, often used in contexts involving decisions or actions.