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Standard of care and justifiable reliance - 15 Pa. Cons. Stat. § 512

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     § 512.  Standard of care and justifiable reliance.
        (a)  Directors.--A director of a domestic corporation shall
     stand in a fiduciary relation to the corporation and shall
     perform his duties as a director, including his duties as a
     member of any committee of the board upon which he may serve, in
     good faith, in a manner he reasonably believes to be in the best
     interests of the corporation and with such care, including
     reasonable inquiry, skill and diligence, as a person of ordinary
     prudence would use under similar circumstances. In performing
     his duties, a director shall be entitled to rely in good faith
     on information, opinions, reports or statements, including
     financial statements and other financial data, in each case
     prepared or presented by any of the following:
            (1)  One or more officers or employees of the corporation
        whom the director reasonably believes to be reliable and
        competent in the matters presented.
            (2)  Counsel, public accountants or other persons as to
        matters which the director reasonably believes to be within
        the professional or expert competence of such person.
            (3)  A committee of the board upon which he does not
        serve, duly designated in accordance with law, as to matters
        within its designated authority, which committee the director
        reasonably believes to merit confidence.
        (b)  Effect of actual knowledge.--A director shall not be
     considered to be acting in good faith if he has knowledge
     concerning the matter in question that would cause his reliance
     to be unwarranted.
        (c)  Officers.--Except as otherwise provided in the articles,
     an officer shall perform his duties as an officer in good faith,
     in a manner he reasonably believes to be in the best interests
     of the corporation and with such care, including reasonable
     inquiry, skill and diligence, as a person of ordinary prudence
     would use under similar circumstances. A person who so performs
     his duties shall not be liable by reason of having been an
     officer of the corporation.

        Cross References.  Section 512 is referred to in sections
     515, 516, 517 of this title; section 712 of Title 17 (Credit
     Unions).

Last modified: November 27, 2007