Commercial Law, 2012 Bar — Question VII

ESSAY

A, B, C, D, E are all duly elected members of the Board of Directors of XYZ Corporation. F, the general manager, entered into a supply contract with an American firm. The contract was duly approved by the Board of Directors. However, with the knowledge and consent of F, no deliveries were made to the American firm. As a result of the non-delivery of the promised supplies, the American firm incurred damages. The American firm would like to file a suit for damages. Can the American firm sue: a) The members of the Board of Directors individually, because they approved the transaction? (2%) b) The corporation? (2%) c) F, the general manager, personally, because the non-delivery was with his knowledge and consent? (2%) d) Explain the rules on liabilities of a corporation for the act of its corporate officers and the liabilities of the corporate officers and Board of Directors of a corporation acting in behalf of the corporation. (4%)

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