The Board of Directors of Filex Corporation at a Regular

question 16

Multiple Choice

The board of directors of Filex Corporation at a regular meeting of the board entered into a contract with Ginger Grant,one of its directors.This contract called for Filex to purchase 120 acres of land from Ginger.There were ten members on the board,eight of whom were present at the meeting.One of the directors present was Ginger.All the other directors were disinterested in the transaction and not related to Ginger.After a lengthy discussion,six directors voted in favor of the contract and two voted against it.Ginger voted for the contract.Which of the following is true?

• A)The contract between Ginger and the corporation is illegal and invalid.
• B)The contract is valid since it was approved by a majority of a quorum of the board.
• C)The contract becomes void if the corporation proves that the contract was unfair to it.
• D)The contract is voidable unless Ginger proves that the contract is fair to the corporation.

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Definitions:

Governmental Functions

Activities and responsibilities carried out by a government, typically including legislation, law enforcement, and provision of public services.

Assignment

The transfer of rights, property, or duties from one party to another.

Delegation

The act of assigning responsibility or authority to another person to carry out specific duties.

Third-Party Beneficiary

An individual or entity that, while not a direct party to a contract, is intended by the contracting parties to benefit from it.