Question

After conducting considerable research and investigation, the directors of a major automobile company, American Car Company, decide to produce a large volume of diesel cars. Four years later, when the diesel cars are introduced to the public for sale, few of them are sold because of the public’s interest in buying electric and hybrid vehicles due to the increasing environmental damage of pollutants and an increase in gasoline prices. The business judgement rule will shield the corporate management from liability because ________.

Answer 1

Answer:

because this was an honest mistake of judgment based on the information that the American Car Company had

Explanation:

Based on the information provided within the question it can be said that the business judgement rule will shield the corporate management from liability because this was an honest mistake of judgment based on the information that the American Car Company had. Therefore since the business judgment rule protects company's based on the presumption that they have made a business decision based on an informed basis and in good faith.