BUS107 Commercial Law


The directors of Mutha Records Ltd, a company that produces rap and hip hop albums, are approached by a young rap artist who calls himself ‘Lil’ Weasel’. They listen to a demo recording prepared by Lil Weasel then debate the potential for financial returns for their company if they were to produce his debut album. After further consideration and some market research, the directors agree the market is currently flooded with rap albums by debut artists and decide not to offer Lil’ Weasel a contract.

Although devastated by their decision, Lil’ Weasel picks himself back up and approaches another record production company. He is rejected by seventeen more companies until finally another record production company called Sucka Records Ltd agrees to produce his debut album and offers him a contract. Lil’ Weasel becomes an instant megastar. His debut album sells millions of copies worldwide and wins several music awards.

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The shareholders of Mutha Records Ltd are furious at their directors for passing on the opportunity to produce the Lil’ Weasel album. They want to sue the directors for breaching their duty to exercise care, skill, and diligence.

Use the IRAC method to advise the shareholders of Mutha Records Ltd whether the directors have breached their duty to exercise care, skill, and diligence and what defences the directors might have

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