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Directors’ Duties of Care – Issues of Classification, Solvency and Business Judgment and the Dangers of Legal Transplants

John H Farrar

(2011) 23 SAcLJ 745

In the Anglo-American world and Singapore, the duties of care of directors developed in equity, statute and common law. This leads to complications. Some jurisdictions now have a business judgment rule which gives directors immunity from suit by the company if certain conditions are fulfilled. The question is whether the rule can be transplanted, what are the consequences and in particular what should be the relationship with insolvent trading.