(solution) Business Law : Assignment

Added on - 15 May 2020

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Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note
BUSINESS LAW1Table of ContentsCase introduction.............................................................................................................................2The duties violated by the directors in this case..............................................................................4Analysis of the decision which have been provided by the court in relation to this case...............5Future implications of the case in relation to the Australian legal system......................................6References........................................................................................................................................8
BUSINESS LAW2Case introductionIn the case of Vrisakis v Australian Securities Commission [1993] 9 WAR 395 thequestion before the court was to determine whether the director involved in relation to theoperations of the company has been able to live up to the expectations which is imposed on thedirectors while they discharge. When this case had been decided the Corporation Act 2001 (Cth)has not been in enacted therefore statutory duties in relation to which a director must functionwith respect to an organisation was not applicable. However in this case the duty which thedirectors needed to comply with and which the court has to analyse was the mirror image of theduty provided in section 180(1) of the act. This duty was in relation to the observance of a degreeof due care and diligence while operating on behalf of the company. In this case it had beenprovided by the court that the direction and management of the organisation consists of makingdecisions and working upon actions which may bring much promise on one hand however on thesame time they are fraught with risk on the other hand. This system is inherent in the life cycle ofCommerce and industry. In this case a non executive director was assumed to have significantresponsibilities in relation to the operations of the company. This is because he had significantexperience in commercial matters along with the specialised knowledge ability and skill which isrequired to manipulate or influence the company's affairs which have been conducted previouslyin a way which can be considered as totally inappropriate. The director in this case was expectedto take into account or more intense analysis and evaluation in relation to the affairs of thecompany. In this context Ipp J had held at the director has to be excused from any form ofliability as if it is not done it would be discouragement towards the expected entrepreneurshipfrom non executive directors like him.
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