State corporate laws generally do bar a director from contracting with the corporation he serves.

Question

Quizplus · Accepted Answer

This rule is known as the "no self-dealing" rule and is designed to prevent conflicts of interest and ensure the director acts in the best interest of the corporation and its shareholders. However, some states have exceptions to this rule, such as when the contract is approved by disinterested directors or shareholders, or when the contract is fair to the corporation.

State Corporate Laws Generally Do Bar a Director from Contracting