Texas Corporate Directors’ Standard of Care and Right To Rely: A Proposed Modification



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Texas Tech Law Review


In 1955, the Texas Legislature adopted the Texas Business Corporation Act (TBCA), which largely derives from the Model Business Corporation Act (Model Act). Periodically, the American Bar Association Committee on Corporate Laws amends the Model Act to reflect modern business, political, and social developments. Texas traditionally has followed the lead of the Model Act's revisers, with occasional modifications. Recently, the ABA Committee examined section 35 of the Model Act and adopted new provisions (the Revision) concerning corporate directors, including a statutory standard of care and a revised "right to rely." It is likely that interested parties will soon urge the Texas Legislature to amend the TBCA so that Texas law will conform to the revised Model Act and other states' enactments. This article examines the possible effects of adoption, modification, or rejection of the Model Act Revision.



Texas Business Corporation Act, TBCA, Model Business Corporation Act, Section 35, Corporate directors, Standard of care, Right to rely


8 Tex. Tech L. Rev. 291