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Sarah Is a Director of Family Educational Testing Services Inc,a

Question 6

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Sarah is a director of Family Educational Testing Services Inc,a corporation incorporated under the Canada Business Corporations Act.She also carries on her own business of finding educational testers and psychometrists needed by testing services businesses.The other members of the board want to hire Sarah to find five testers for the corporation.Which statement best describes the legal rules that would apply to Sarah undertaking such work?


A) She cannot do business with the corporation because there would be a conflict between her personal interest in getting the best price for her services and her fiduciary obligation to act in the best interests of the corporation,which would require her to seek the lowest price.
B) She can do business with the corporation but only if the corporation chooses her after a bidding process open to all of Sarah's competitors.
C) She can do business with the corporation because,as a separate legal person,the corporation is free to decide with whom it does business.
D) She can do business with the corporation only if she gives notice to the board that she has an interest in the transaction,if she does not vote on the resolution of the board approving the contract,and if the transaction is fair and reasonable to the corporation.
E) She can do business with the corporation as long as she agrees to work for a fair price.

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