Ignoring the client’s financial ability of a customer may be deemed breach of the duty of care and ‎fiduciary duty of directors of the corporation ‎

Two senior managers in a corporation were sued, inter alia because they were negligent in enabling the continuing supply of goods to a costumer, despite an increasing debt of the customer towards the corporation.

The Court accepted the claim and held that the managers ignored the financial ability of the costumer, concealed critical information as the status of the customer, presented false reports to the management of the corporation and continued to supply goods to the costumer, while they were acting contrary to the instructions of the corporate’s management and the legal advice they received.  In this the directors breached their duty of care and fiduciary duty and were found liable for the corporate’s damage