Explain whether the business judgment rule will be

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Reference no: EM133449130

Case Study: Grace is an entrepreneurial aeronautical engineer who has grown her business into the publicly listed company, Ideas Made Real Ltd (the Company).

One year ago, Will as managing director of the company, entered into a contract with Beyond Jets Pty Ltd (Beyond Jets) to provide them with 30 pilot consoles for $2 million. The order has been manufactured and delivered to Beyond Jets, but no payment has been received.

Grace has now discovered that it was very clear at the time the contract was entered into that Beyond Jets was in financial difficulties and was known in the engineering industry to be a bad credit risk. She has also discovered that Will knew this but wanted to help Beyond Jets trade out of trouble, as Jack, the managing director of Beyond Jets is his cousin.

Beyond Jets is now in liquidation and the Company is still owed $2 million.

Questions: The following questions 12, 13 and 14 relate to Ideas Made Real Ltd. You are required to provide her with answers to the following questions.

With reasons, explain whether the 'business judgment rule' will be relevant in Will and Jack's circumstances? Your answer must include the relevant section(s) of the legislation.

Reference no: EM133449130

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