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Book Title
10th Edition
ISBN: 9781337605656
Author: CROSS
Publisher: CENGAGE L
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Chapter 18, Problem 2BS
Summary Introduction

Case summary: Person W is the owner of company WC and is also a board of directors of the company WC. Company OC is negotiating with company WC for renovation of the headquarters. W previously disclosed about his personal interest in incorporating the construction company to two of the other directors. The company approves of the contract by three-to-two votes with W voting with majority.

To find: The extent to which the contract is binding on the corporation.

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Oxy Corp. is negotiating  with Wick Construction Co. for the renovation of Oxy’s corporate headquarters. Wick, the owner of Wick Construction  Co., is also one of the five members of Oxy’s board of directors. The contract terms are standard for this type of contract.  Wick has previously informed two of the other directors of his  interest in the construction company. Oxy’s board approves  the contract by a three-to-two vote, with Wick voting with the  majority. Question: Should the contract between Oxy Corp and Wick Construction corp. be set aside or is it binding? What would have been the proper way for Wick to conduct himself at the Oxy board meeting?
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