Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fabio, Donatella and Georgio (the trio) create new fragrance called Un Fire which is scientifically proven to improve communications skills with the opposite sex. The

Fabio, Donatella and Georgio ("the trio") create new fragrance called "Un Fire" which is scientifically proven to improve communications skills with the opposite sex. The trio established a company called Fabdoge Pty Ltd (Fabdoge) and were named as the only directors of the company. One week before the company was registered with ASIC, the trio sold all the rights to "Un Fire" to Fabdoge (by pre-incorporation contract) for $3,000,000. Immediately after registration, the transaction was disclosed to and approved by all three directors. It had cost the trio $100,000 to create the fragrance. The market value of the fragrance has been valued at $1,000,000.

Which of the following statements is correct?

a.

The sale may be rescinded because the trio made a personal gain from the sale of "Un Fire" to Fabdoge

b.

The sale is valid because the trio are not "promoters" as defined at common law and therefore do not owe any fiduciary duties to Fabdoge

c.

The sale is valid because the trio at all times acted honestly and disclosed their interests in the transaction to Fabdoge

d.

The sale may be rescinded because the trio did not disclose their interest in the transaction to an independent board of directors

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Law Express Criminal Law

Authors: Emily Finch, Stefan Fafinski

8th Edition

1292295414, 978-1292295411

More Books

Students also viewed these Law questions

Question

Exactly what is that "corresponds" in the correspondence principle?

Answered: 1 week ago

Question

6. How can hidden knowledge guide our actions?

Answered: 1 week ago

Question

7. How can the models we use have a detrimental effect on others?

Answered: 1 week ago