Duty of Care
Explain the requirements of the Duty of Care, the Duty of Loyalty, and the Business Judgment rule. Who or what are these duties designed to protect? Are these duties necessary? Why or why not?
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A longtime friend and client approaches you and explains that he has the opportunity to purchase a company that has developed a very lucrative technology. Unfortunately, the company has had some legal issues with clients and vendors in the past. Your friend assures you that, going forward, he can resolve the problems that have led to the legal issues, but he does not want to be held liable for the company’s past failings. Your friend asks you to give your opinion on whether he should purchase the stock of the company or purchase only the assets. Which method of acquisition would you recommend and why? Use this week’s lecture as a basis for your post. Respond to at least two of your classmates’ posts.
The duty of care is the legal obligation people or companies have to desist from engaging in conduct or omissions that could harm another person (Nwabachili, 2017). The person causing the harm should also know that acting or failing to act in a particular manner might harm their victim. As such, the elements of duty of care are as follows; foreseeability of the harm to the victim, the connection between the action of the perpetrator and the injuries suffered by the victim, and the extent of injuries sustained by the victim. This duty seeks to protect people from the excesses and negligent actions of those around them (Nwabachili, 2017). Having such responsibility is necessary because it allows victims to take legal action for any harm occasioned on them due to another person’s or an organization’s negligent actions.(740words)