Australian Law

Part c) - 10 marks (from chapter 13.4/20th edition equivalent chapter 17)

Part c) is a real exercise in understanding the development over time of the duty of care and diligence as well as understanding liability for breach in order to determine whether the statement is correct or not. Note that, in either the introduction or the conclusion, you must state whether the statement is correct or not.

"Company directors have to exercise a very high standard of care and diligence under both the Corporations Act and case law because if they make a decision that causes any damage to the company, they will be personally liable to creditors."

REQUIRED: Using your knowledge from studying directors duties, discuss the correctness of this statement