User:Skkblaw/Duty of care (business associations)

Editing the Case Law Section:

In this decision, a standard of gross negligence was used, which is defined as “reckless indifference to or a deliberate disregard of the whole body of stockholders or actions which are without the bounds of reason.” In the case of Van Gorkom, a share price was set for a company buyout with essentially no consideration, this meeting the standard of gross negligence in informed decision making. Thus, the Duty of Care certainly involves informing oneself prior to making decisions.

Francis V. United Jersey Bank (emphasizing monitoring as a part of the duty of care). In this case, a women was given control of an implied trust as a result of her husband's death. Thus, she assumed the role of director. During her time as director, her sons stole millions of dollars from the trust. The courts stated that she breached her duty of care because she failed to monitor what was happening within her organization. Thus, monitoring activity within an organization is part of the fiduciary duty of care.