Business Judgment Rule Washington

Angel may have established a standard of review which if adopted by other jurisdictions could change forever the landscape of the business judgment rule.

Business judgment rule washington. The standard of conduct in oregon and washington is colloquially known as the business judgment rule application of the business judgment rule comes into play in nearly all board decision making from deciding how far to pursue a collections matter to selecting a contractor for multimillion dollar repairs to raising or lowering monthly assessments. 2 in theory the business judgment rule protects management from liability for honest mistakes in judgment as long as they act with due care and loyalty. Are clothed with presumption which the law accords to them of being in their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge.

The business judgment rule protects the business decisions of corporate directors and officers who are sued by shareholders for claims of a breach of the duty of care. The rule exists in some form in most common law countries including the u. But the only process the law recognizes to yield the benefit of the business judgment rule is a board process dominated by independent directors.

5 john farrar. By david wilson sep 10 2001 12 00am edt. The homeowners also rely upon the business judgment rule under which they argue personal liability will not be found based upon a decision made within the authority of the association and made without bad faith or corrupt motive.

11 if their actions are supported by appropriate due diligence are in good faith and do not create conflicts of interest they will be protected from liability even if their decisions cause damage to their companies. 4 5 mei 1984 hlm. Indeed the business judgment rule as defined by leading corporate law jurisdictions and the american bar association generally protects directors from liability associated with negligent.

The role of the business judgment rule where homeowners associations is concerned is the subject of ongoing debate. This article discusses the provisions of business judgment rule bjr in the company law and the application of bjr by the courts in the united kingdom uk canada and indonesia. It is rooted in the principle that the directors of a corporation.

In the uk and canada the. However the supreme court of washington in the decision dated april 10 1997 in the case of riss v. The business judgment rule is a case law derived doctrine in corporations law that courts defer to the business judgment of corporate executives.