acca f4.pdf
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Case
Result
Case Facts Held
A nadvertisement
with element
of
reward is a
public offer .
Carlill v
Carbolic
Smoke
Ball Co
[1893]
An advert placed for'smoke
balls' to prevent influenza.
offered to pay £100 if
anyonecontracted influenza after
using the ball. Deposited
£1000 with the Alliance!ank to show their
sincerity
in the matter. "he plaintiff bought one of the balls but
contracted influenza
she was entitled to recover as
(a) "he deposit of money showed
an
intention to be bound therefore the
advert was an offer#
(b) $t was possible to make an offer
to the world at large which is
accepted by anyone who buys asmoke%ball#
(c) "he offer of protection would
cover the period of use# and
(d) "he buying and using of the
smoke%ball amounted to acceptance.
Acceptance of
offer has to be
communicated.
R v Clarke
[1927]
"he &overnment offered a
reward for information
leading to the arrest ofcertain
murderers and a pardon to
anaccomplice who gave the
information. larke saw
the proclamation. (e gave
information which led to
theconviction of themurderers.
(e admitted that his only
ob)ect in doing so was toclear
himself of a charge of
murder and that he had no
intention
of claiming the reward at
thattime. (e sued the rown
for
the reward
"he court dismissed the case. "here
cannot be assent without knowledge
of the offer# and ignorance of theoffer is the same thing whether it is
due to never hearing of it or
forgetting it after hearing.*
Case Case Facts Held
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Reslt
/evocation hasto be
communicated.
B!r"e #
$eo" #a"
[188%]
An offer made on 1st
ctober $n ardiff2. laimant in
3ew 4ork2 received it on11th 5 send acceptance atonce. $n the main time the
defendant change his
mind
and sent a letter ofrevocation
on 6th ct. /evocation
letter reached on 17th ct.
"he revocation was not complete
until it had been communicated tothe offeree. "his was on 17th
ctober. $n the main time however the offer had been accepted. As aresult the revocation was ineffective
5 the contract did e8ist. "he
defendant was therefore liable
under the contract.
./evocation
can be
communicated
by a reliable
source.
&icki"so"v &odds
[187']
Dodds offered to sell hishouse to Dickinson the
offer being open until 9am
+riday.
n "hursday Dodds sold
thehouse to Allan. Dickinson
was told of the sale by
!errythe estate agent and he
delivered an acceptance before 9am +riday.
As the laimant knew that thedefendant was no longer in a
positionto sell the property to him the
defendant had drawn his offer
validly. $t was impossible
thereforeto say there was ever that e8istence
of the same mind between the two
parties which is essential in point of law to the making of an agreement.
ffer does not
laps with death
of offeree andremains valid
if
considerationis
being made.
rri"to"
v
rri"to"
[19*2]
A father bought a house on
mortgage for his son and
daughter%in%law and promised them that if they
paid off the mortgage they
could have thehouse. "hey began to do
this but before they hadfinished paying the fatherdied. (is widow claimed
the house.
"he father's promise was a
unilateral
contract % a promise of the house inreturn for their act of paying the
installments. $t could not be
revoked by him once the couple entered on
performance of the act. "he couplewas entitled to continue paying theinstallments and claim the house
when the mortgage has been fully
paid off.
Case Case Facts Held
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Reslt
A ounter
ffer /evokesthe original
offer.
H!de v
+re"c,
[18-%]
.: ;une < offered to sell
hisestate to ( for £1000# (
offered £970 => ;une <re)ected ('s offer =9 ;une(
offered £1000. < refused
to
sell and ( sued for breachof contract
(eld that if the defendant's offer
to sell for £1000 had beenunconditionally accepted there
would have been a bindingcontract# instead the plaintiff made an offer of his own of £970
and thereby re)ected the offer
previously made by the defendant.
$t was not afterwards competentfor the plaintiff to revive the
proposal of the defendant by
tendering an acceptance of it# andthat therefore there e8isted no
obligation of any sort between the
parties.
?roducts ondisplay are
only an
invitation to
treat and notan offer.
Fis,er v
Bell [19'%]
A shopkeeper displayed aflick knife with a price tag
in the window. "he
/estriction of ffensive
<eapons Act 1979 made itan offence to 'offer for sale'
a 'flick knife'. "he
shopkeeper was prosecutedin the magistrates' court
"he knife had not in law been'offered for sale. According to the
law of contract the display of an
article with a price on it in a shop
window is merely an invitation totreat. $t is in no sense an offer for
sale the acceptance of which
constitutes a contract.
An ffer
must be
distinguishedfrom a mere
supply of
information
Harve! v
Face!
[1893]
"he plaintiff sent a
telegram
to the defendant to sell property. "elegraph lowest
cash price. "he defendant
reply was @lowest cash
priceis £900. "he plaintiff
telegraphed @we agree to
buy B.. for £900 asked by
you.
$t was held that the defendantCs
telegram was not an offer but
simply an indication of minimum price the defendant would want.
Case
Reslt
Case Facts Held
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An
advertisement
is only aninvitation to
treat and notan offer.
Harris v
.ickerso"
[1873]
Auction of sale of furniture
was advertised in a
newspaper ondon broker saw the advertisement and travel to ondon to
attendthe sale the items had beenwithdrawn from the sale
before he arrived he claimed
that his action of attending
the auction amounted to anacceptance of an offer as
result he claimed that
contract has been breechedand sued for damages.
$t was not an
offer as it was
notclear definite or
uneEuivocalfromthe
advertisement
that the
auctioneerwanted to sell
the items of
furniture to the broker the
auctioneer had
no intention to be
bound to this
broker it was amere
statement of
intention.
Acceptance
is valid if sent in time
by any moreunlesse8clusively
specified.
.
/ates
bildi"s v
R 0
lle!" So"s
[197*]
fferor asked for the offer
to be accepted by registered post the offeree accepted the
by an ordinary letter whicharrived promptly
"he offeror had
suffered nodisadvantage in
a way that theoffer had beenaccepted as the
offeror did not
put a condition
specifying thatthe acceptance
could only be
made byregistered
post the
acceptance wasvalid.
-ilence doesnot amount to
Felt,ose
v
+ wrote to his nephewoffering to buy the nephews horse for £F0.17
$t was held thatthere was no
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acceptance. Bi"dle!
[18'3]
and adding
@if $ hear no more abouthim $ will consider the
horse mine. "he nephew
never replied.
contract the
uncle had noright to impose
upon the nephew
to sell
his horse. "henephew had not
given anywritten proof.
Acceptancemust be
communicated
throughauthorized
person.
oell v
$ee [19%8]
"he plaintiff applied for a )ob as headmaster 5 the
school managers decided
to appoint him. ne of them acting without
authority told the plaintiff
he had been accepted.ater the managers
appointed someone else.
"he plaintiff sued allegingthat by breach of a
contract to employ him
"here was nocontract as there
had been no
authorisedcommunication
of intention to
contract on the part of the
body that is the
managersalleged to be a
party to the
contract.
?ostal /uleG
A letter of
4dams v
$i"dsell
2 Se5t6 "he defendant
wrote to the plaintiff
A binding
contract was
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acceptance
once postedis deemed
accepted.
(1818) offering to sell goods
asking for a reply *in thecourse of post*
* Se5t. "he plaintiff
received
the letter and sent a letter of acceptance.
9 Se5t. "he defendantreceived the plaintiff's
acceptance bt o" 8
Se5t
had sold the goods to athird party.
made
when the plaintiff posted
the letter
of acceptance on
7 -ept so thedefendant was in
breach of contract.
,e ostal Rle
H $f
acceptance by post has been
reEuested or
where it is anappropriate and
reasonablemeans ofcommunication
between parties
acceptance is
complete as soon as the
acceptance is
posted,even if the letter
is delayed,
destroyed or lostin the post so
that it never
reaches theofferor.
Case
Reslt
Case Facts Held
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onsideratio
nG
?rice paid byeach party to
the contractfor the other partyCs
promise.
Crrie v
isa [187*]
onsideratio
n need not
be adeEuatesatisfactory2 but must be
valuable
beneficial2.
,omas v
,omas
[18-2]
A promise to convey a house to a
widow on her promise to pay
£1.00 rent p.a. and keep the housein repair was binding
?erformanceof e8isting
legal
obligationdoes not
amount toconsideratio
n.
Colli"s v
ode:or!
[1831]
A witness legally reEuiredto attend the court was
promised payment if he
would attend the court andgive evidence. (e attended
court and sued for the promise
(e had not provided considerationas he was legally obliged to attend
under the summon <ritten
command to a person to appear incourt.2
?erformanceof e8isting
Stilk v
!rick
"wo out of eleven sailorsdeserted a ship. "he
As the sailors were already bound by their contract to sail
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duty doest
not amountto
consideratio
n.
[18%9] captain promised to pay
the remaining crew e8tramoney if they sailed the
ship back but later
refused to pay
back and to meet such
emergencies of the voyage promising to sail back was not
valid consideration. "hus the
captain did not have to pay the
e8tra money.
ontract
holds if
work
is done intime and
both parties
take practical
benefit from
it.
+illiams v
Ro::e!
(199%)
/offey had a contract to
refurbish a block of flats %
sub%contracted the work
to <illiams % work begun% <illiams realized the
fact that he
underestimated the costof the work and was in
financial difficulties.
/offey to avoid foul of a penalty clause in his main
contract with the owner2
agreed to pay <illiamsan e8tra payment per flat.
<illiam did not receive
full payment H <ork
stopped /offey arguedthat <illiams was only
doing what he was
contractually bound to do
and so had not providedconsideration.
(eld that where a party to an
e8isting contract later agrees
to pay an e8tra *bonus* in
order to ensure that the other party performs his obligations
under the contract then that
agreement is binding if the party agreeing to pay the
bonus has thereby obtained
some new practical advantageor avoided a disadvantage.
?erformance
beyond
e8isting dutyamounts to
consideratio
n.
Hartle! v
o"so"b!
[18*7]
A high number of desertions
from a merchant ship
rendered the vesselunseeworthy undermanned
since e8tra pay was offer to
the crew if they remainloyal
"he promise of e8tra money was
recoverable by seaman who
remained loyal since they werenow working in a dangerous
situation they were doing more
than reEuired in there originalcontract2
?astconsideratio
Re c4rdle
[19*1]
A wife and her threegrown%up children lived
$t was held that the promisewas unenforceable as all the
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n is no
consideration.
together in a house. "he
wife of one of the childrendid some decorating and
later the children
promised to pay her £,66
and they signed adocument to this effect.
work had been done before
the promise was made andwas therefore past
consideration
?rivity of
contractG
nly partiesto the
contract can
sue eachother.
eddle v
4tki"so"
[18'1]
"he claimantCs father and
father%in%law agreed with
each other to pay theclaimant £100 and £=00 in
consideration of his then
intended marriage and after the marriage had taken
place they confirm their
agreement in writing. £=00was not paid and the
claimant sued his
father%in%law
-on%in%law could not sue because
he had not provided
consideration.
?erformanceof an
e8isting
contractual
obligation issufficient
consideratio
n to supporta promise
from a third
party.
S,adell v
S,adell
[18'%]
promised his nephew Aan allowance if he would
marry his fiancIe ! $n
those days an agreement to
marry was legally binding2.
"he promise was binding eventhough A was already obliged to
marry !. A had provided
consideration for the uncleCs
promise as he was initially under a duty to fiancIe not to uncle but
by entering into the agreement
with the uncle he had put himself under an obligation to him too.
?innelCscaseG
Foakes v
Beer [188-]
Jrs !eer had obtained )udgment for a debt of £
"he interest was recoverable.?ayment 5 satisfaction of a
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A lesser sum
is not a goodconsideratio
n for a
higher sum.
=090K% against Dr +oakes
with interest whosubseEuently asked for time
to pay. -he agreed that she
smaller sum was not consideration
for the promise to accept thisamount in satisfaction of a debt
interest and cost a greater sum.
?ayment bycheEue gives
no benefit
over and
above payment in
cash a
lesser sum is
not a goodconsideratio
n for ahigher sum2.
& C
Bildi"s
Rees
[19'*]
"he ?s a small buildingcompany had completed
some work for Jr. /ees for
which he owed the company
£,6=. +or months thecompany which was in
severe financial difficulties
pressed for payment.
ventually Jrs. /ees whohad become aware of the
company's problemscontacted the company and
offered £F00 in full
settlement. -he added that if
the company refused thisoffer they would get
nothing. "he company
reluctantly accepted acheEue for £F00 *in
completion of the account*
and later sued for the balance.
$t was held that the company wasentitled to succeed. "he )udge was
of the view that it was not unfair
for the creditors to go back on
their word and claim the balanceas the debtor had acted un)ustly
by e8erting improper pressure.
Doctrine of
promissory
Ce"tral
$o"do"
$n 19F> the ?s granted a 99
year lease on a block of flats
$t was held that they were entitled
to recover this money as their
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is estoppelG
4ou cannote8ploit the
situation by
going back
against your own words
ro5ert!
rst $td6 v
Hi, rees
Hose $td
[19-7]
in ondon to the Ds at an
annual rent of £=700.!ecause of the outbreak of
war in 19F9 the Ds could
not get enough tenants and
in 19,0 the ?s agreed inwriting to reduce the rent to
£1=70. After the war in19,7 all the flats were
occupied and the ?s sued to
recover the arrears of rent as
fi8ed by the 19F> agreementfor the last two Euarters of
19,7.
promise to accept only half was
intended to apply during war conditions. ?s were estopped
from going back on their promise
and could not claim the full rent
for 19,0%,7.
"he doctriceof
promissory
estoppeldoes not
create a new
cause of
action wherenon e8isted
before.
Combe vCombe [
19*1]
A husband entered into acontract promising his wife
to pay £ 100.00 free of
income ta8 after their divorce. "he wife did not
apply to the court for a
maintenance order but
when the husband failed toimplement his promise she
sued to enforce the
agreement relying on his
promise and the doctrine of promissory estoppel.
"he wife was not a in appositionto enforce the agreement as she
lacked consideration on her part.
"he eEuitable doctrine did notcreate a new cause of action
where none e8isted before.
Agreements
between
erritt v
erritt
A husband separated from
his wife wrote and signed a
(usband promise was enforceable
the agreement having been made
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spouses
about to or already
separated are
legally
binding.
[197%] document stating that in
consideration of the wife paying off the outstanding
mortgage debt of £160 on
their matrimonial home
he would transfer thehouse into her sole
ownership. "he wifeimplemented her promise
but husband did not. (e
alleged that his promise
was a domestic relationnot giving rise to a legal
relation.
when the parties were not living
together courteously. A legalrelation is assumed where a
husband deserts his wife and an
agreement is concluded of the
ownership of the matrimonialhome occupied by the wife and
children.
A statement
of Euality based upon
which a
contract ismade as far
as buyer is
concerned
considered aterm.
Ba""erma"
v ,ite[1977]
A buyer of hops asked by
the seller whether sulphur had been used in the
treatment and added that if
it had he will not buy. "heseller assured him that
sulphur had not been used.
-ulphur had been used.
"he court decided that the sulphur
was a vital part of the contract.Around which the whole deal
revolved it was a term.
An assertion
made by person whois a layman
for those
goods being
sold is notconsidered a
term.
;scar
C,ess $td6v +illiams
[19*7]
<illiam on selling a car to
the claimant company of car dealers asserted that it was a19,6 model. "he
registration book appeared
to confirm this statement
but it had been altered bysome previous owner and
the car was infect a 19F9
model
"he statement was in innocent
misrepresentation but not a termof the contract. "he seller whowas not a car dealer with
e8perience knowledge did not
intend to be bound contractually
by his statement concerning theage of the vehicle.
,e
oorcock
A wharf dock2 owner madean agreement to permit a
"he court implied a term into theagreement that the river bottom
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case [1889] ship owner to unload his
ship at the dock the shipwas damaged when at low
tied it was grounded at the
bottom of the river on a
hard ridge.
would be reasonably safe. Such
implied terms are based on the presumed but unexpressed
intention of the parties.
ontract is
termed void
on breach of a condition.
ossard v
S5iers
[187']
A soprano Jadame
?oussard agreed to sign a
series of opera for -piersshe failed to appear on the
opening night and was
refused for her services for her subseEuent nights she
sued for the breach of
contract.
"he obligation to appear on the
opening night was a condition and
since madame ?oussard was in breach of this condition -piers
was entitled to treat the contract
has at an end.
!reach of awarranty
does not
make the
contractvoid.
Bitte"i v
!e [187']
A tanner !itteni who addedto sign in a series of
concerts and to attend : days
of rehearsals
beforehand failed to appear for the first , days of
rehearsal &ye in
conseEuence refused !itteniservices for the balance of
the rehearsal and performances !itteni suedfor the breach of contract.
"he obligation to appear in therehearsal was a mere warranty and
!itteni breach could not be treated
as an end of the contract. &ye was
accordingly in the breach of contract when he refused !etteni
services for the remainder of the
contract.
A non
serious
breach of aninnominate
term can
only result in
claim for damages.
Ha"sa
.ord
[197']
An e8clusion
clause;lle! v
arlboro
A notice in a hotel room
e8cluded liability for loss or
"his was ineffective because the
contract for accommodation had
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cannot be
introducedinto contract
after it has
been made.
, cort
[19-9]
damage to guest property. been made at the reception desk.
nly naturallosses
reasonably
foreseeable
by a bystander
can be
claimed for.
Hadle! v
Ba<e"dale
[18*-]
A carrier was given amill%shaft to deliver to a
plant manufacturer as a
model for making a new
shaft the carrier delayed indelivery and unknown to
him the mill stood idle
during the period of delay.
(e was not liable for the loss of profit and the rule was formulated
as followsG
"he loss should be such as
may fairly and reasonably beconsidered either arising
naturally from the breach of
contract or as may reasonably
be supposed to have been incontemplation of both parties
at the time they made thecontract.There are two types of loss for
which damages may be
recovered:General damage normal loss.
Special damages abnormal
loss.
A company
is a separate
legal entityhaving its
own assetsand
liabilities.
Salmo" v
Salmo"
com5a"!$td6 [1897]
-almon had been in the boot
and leather business for
some time together withother family members he
sold the old business to hisnewly formed td.
company. ?ayment was in
form of cash shares anddebentures when the
company was eventually
winded up it was agreed
that -almon and thecompany was the same and
he could not be the creditor of his own so his debentureswould not have any effect.
(ouse of lord held that since there
was no fraud involved his
debentures were valid thecompany was properly constituted
and therefore it was a separatelegal personality from -almon.
A companyis a separate
$ee v $ee=s
4ir
An aerial crops spraying business in which Jr. ee
Although he was ma)ority shareholder and the sole working
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legal entity. :armi"
$td6 [19'%]
was a ma)ority shareholder
and was the sole workingdirector was killed while
piloting the air craft.
director of the company he and
the company separate legal persons and therefore he could
also be and employee of it for the
purpose of relevant statute with
rights against it when killed in anaccident in the course of his
employment.
A sham
company isalso liable
along with
the relatedviolator.
0o"es v
$i5ma"
[19'2]
agreed to sell some land
to ; than changed hismind and in order to evade
specific performance sold
the land to a company of which he was a controlling
member.
"he company was sham and
specific performance e8tended notonly to but also to the company.
ourt is not
free to thisregard the
principle of
-alomon v
-alomonunless
carefully
watched.
4dams v
Ca5e
i"dstries
[199%]
ape an nglish registered
company was involved inmining asbestosa form of
mineral2 in south Africa and
marketing it world wide to
various subsidiaries one of its marketing subsidiaries
? a company
incorporated and carryingon business in the L.- had a
court )udgment against it.
$t was unsuccessfully argued that
the veil should be lifted betweenthe companies so as to enabled the
)udgement to be enforced against
cape.
Fort"m
aso" $td6
v Fort"m
$td6 [199*]
"he claimant a well known
store in ?iccadilly ondon bought an action in the tort
of passing off against the
defendant. "he defendant
carried on business as animporter of low price to
goods from (ong Mong and
hina and then e8ported to
urope. "he defendant didnot apply its name to the
goods themselves
"here was no evidence that any
costumer of the claimant storewould buy the defendants good
thinking they were the claimants
therefore the action failed.
Any contract
not4s,br!
Raila!s
"he ob)ects clause of the
company set out purpose of
"he contract was ultra virus and
beyond the capacity of the
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authorized
by theob)ects
clause of a
company is
termed ultravirus.
Carriae v
Ric,e
[187*]
the company as the making
and selling of railwaycarriages. "he company
entered into a contract to
purchase a concession for
constructing a railway.
company.
+ailure of
substratum
may result inwinding up
of company.
erma"
date co::ee
Co6 [1882]
"here was a failure to carry
out the ob)ect of making
coffee from dates by meansof a &erman patent
although the company did
manufacture it with a-wedish patent2.
"he company would be wound
up.
"he articlesin all
respects areenforceable
by company
against its
members.
Hickma" v>e"t [192%]
"he o.Cs articles includeda clause to the effect that all
disputes between thecompany 5 its members
were to be referred to
arbitration. A member
brought court proceedingsagainst the o.
"he proceedings were stayed. "heompany could enforce the
arbitration clause against amember.
An alteration
of articles of
associationcan be made
in the best
interest of the
company.
ree",al,
v 4lder"e
Ci"emas[19*%]
"he issue was the removal
from the articles of the
membersC right of firstrefusal of any shares which
a member might wish to
transfer# the ma)ority wishto make the change in order
to admit an outsider to
membership in the interest
of the company.
"he benefit to the company as
whole held to be a benefit which
any individual hypotheticalmember of the company could
en)oy directly or through the
company 5 not merely a benefitto the ma)ority of the members
only.
An alteration
of articles of Sidebottom
b >ers,a
"he alteration was to e8pel
a member who carried on a
"he alteration was held valid.
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association
to e8pel amember in
the best
interest of
the companycan be made
withcompensatio
n.
leese Co6
[192%]
business completely with
the company.
ompany
has the
power toalter its
AA with a
retrospectiveeffect.
4lee" v
old Ree:s
[19%%]
N held fully paid 5 partly
paid%up capital in the
company. "he o.Cs articles provided for a lien a right
over another!s property to
protect a debt charged onthat property.2 for all debts
5 liabilities of any member
upon all partly paid sharesheld by the member. "he
o. by special resolution
altered its articles so that the
lien was available on fully paid%up shares as well.
$t was held that the o. had the
power to alter its articles by
e8tending the lien to fully paidshares. Alteration to the articles is
only sub)ect to the alteration by
-9 A 1967. /ights in the articlesare limited as to their duration by
the articles which confer them.
laim can be
made on breach of aservice
agreement
due to
alteration of the articles.
Sot,
Fo"driesltd6 v
S,irla
[19-%]
A managing director was
appointed under contractwith a company for tenyears but after the articles
had been changed
empowering his removal as
director he was dismissed.
"he court awarded them damages
for wrongful dismissal since thealteration of the articles althougheffective constituted a breach of
their contract of service# it was
contrary to the agreement that he
should serve for ten years which became impossible when he lost
their directorship.
/aising-hare
Cleme"s v
Cleme"s
? held ,7O of the shares dheld 77O. D along with
"he fact revealed that the director with ma)ority shareholders were
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apital to
dilute ashareholderC
s voting right
is an
improper purpose 5
shall not bevalidated.
Bros6 ltd
[197']
other directors decided to
increase the nominal sharecapital. A general meeting
was held for the issue. D
favoured ? showed
deterrence > alleged that the purpose of this was to dilute
her voting control below to=7O 5 therefore deprive of
her power to vote special
resolution.
raising share capital not with the
intension to favour all but thereason was to dilute the minority
voting control. "he directors were
miss using their power.
"he directorsowe no
general duty
to individualmembers.
ercival v
+ri,t
[19%2]
-ome -hareholders askedo.Cs secretary for any party
interested to buy their
shares H -hareholders thensold shares to hairman.
ater it was revealed that at
the time of negotiationdirectors were engaged with
a party for sale of shares at
a price which was
considered to be high of thecurrent deal. "he
shareholders wished to return
back.
"he director owe a fiduciary dutyto company but not to individual
shareholders so under no duty
does the director is liable to actfor the best interest of an
individual. o. could have sued
the director if any would havedone.
Directors
cannot attain
any benefit
from thereoffice by
breaching
their fiduciary
duties.
Cook v
&eeks [
191']
-hares of the railway o.
"2 were eEually divided on
its directors. "he company
got a contract. "hreedirectors of "2 were not
willing the o. to have the
contract. "hey formedanother company D2 )ust
because of getting a new
contract. "hese directorslater sold a plant by
ma)ority voting to D. thers
directors sued.
$t was held that Directors could
not retain benefits of the o. "2
to themselves. "he director could
not use their voting control to bring a loss to the minority.
Director cannot make
Real
(,asti")
/egal hasting2 ltd. owed acinema 5 wished to buy
$t was held that Directors usedtheir special knowledge to gain
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profit from
there position as
directors
regardless of
their motivesor
conseEuences to the
company.
ltd6 v
lliver
[19-2]
two more cinemas 5 later
sell them all as goingconcern. !ut regal was not
in financial position to buy
the two cinemas. -ome
directors were not were notagree. /egal with some
directors formed another company real applied for
ma)ority shares managed
amount sold cinemas as
going concerns regal gotmore profit portion where as
co. got less.
hidden profits. $t was a breach of
duty. "hey were accountable for the profit made.
+iduciary
dutiessurvive even
after the
directorsleave the
company.
?&C v
Coole![1972]
olle was a director of $D.
A company wanted to givea contract to olle not to
$D. olle because of
having interest in thecontract resigned 5
accepted the contract in his
own capacity.
(e was in a breach of fiduciary
duty as he preferred to earn profitfor his own sake and acted against
the best interest of the company.
+iduciary duty e8ited even after his resign from the company.
A director
should not be allowed
to contractwith his owncompany.
4berdee"
Raila! v
Blaikie
[18*-]
o. ontracted for chair
from a claimant partnership.of which the director was a
member2. "he director wasinterested at both sides butcouldnCt bargain for the
company.
ompany was entitled for
avoiding the contract. 3o Euestionshould be raised for fairness K
unfairness of the contract.
A director is
made
personallyliable for
debts 5
liabilities if
he hascommitted
wrongfultrading.
rodce
arketi"
Co"sorti
m
$td6 [ 1989]
ompany traded
successfully for 9 years
built up an overdraft had acontinuing loss H iabilities
e8ceeded assets between
1960 H 6>2. $n +eb. 6>
directors recognizinge8pected liEuidation carried
on trading. -uffered lossdirectors were sued.
"he court reEuired the directors to
contribute for £ >7000K% in o.Cs
assets because being aware of thegoing concern problem trading
was carried on. <rongful attitude
observed.
A ompany
secretarya"orama
&evelo5me
o.Cs secretary of the
defendant ordered a
"he contract was binding since
hiring of cars was usual to the
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within his
authority canmake
contracts
with third
parties on behalf of his
company.
"t v Fidelis
Fr"is,i"
[1971]
imousine 5 stated that it
was to be used in business but used personally.
-ecretary usually hired cars
in the past.
office of companyCs secretary.
"d o: Cases
For ore St:: #isit
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