scholarly journals A DIRECTOR'S DUTY TO CONFESS: A MATTER OF GOOD FAITH?

2007 ◽  
Vol 66 (2) ◽  
pp. 348-364 ◽  
Author(s):  
Lusina Ho ◽  
Pey-Woan Lee
Keyword(s):  
Common Law ◽  
Good Faith ◽  
Independent Source ◽  
Company Directors ◽  
Per Se ◽  
English Law ◽  
Specific Duty ◽  
A Company ◽  
Disclosure Obligations ◽  
Do So

In common law jurisdictions, there has been considerable academic and judicial discussion of the duties of company directors generally. In contrast, relatively little ink has been spent on the specific duty, if any, of a company director to disclose his own misconduct (in the civil realm) to the company, even less so on the nature and basis of such a duty. This is unsurprising given the very restrictive approach to disclosure obligations in English law. Thus, while a director may in loose terms be said to be under a “duty” to disclose interests that conflict with the company's, such disclosure only serves the purpose of relieving him from liability, and failure to do so per se has not been regarded as an independent source of liability.

The Companies Ordinance (Amendment) (No. 17) Law: Effects on the Alteration of the Objects Clause in a Company Memorandum

1982 ◽  
Vol 17 (2) ◽  
pp. 169-196
Author(s):  
Zipora Cohen
Keyword(s):  
Legal Status ◽  
Common Law ◽  
Company Law ◽  
Good Faith ◽  
Special Procedure ◽  
A Company ◽  
Do So

The Companies Ordinance (Amendment) (No. 17) Law, 1980, (hereinafter referred to as Amendment no. 17) has fundamentally reformed the legal status of the objects clause of a company memorandum. It is no exaggeration to say that this amendment constitutes the greatest reform effected in company law in Israel up to the present day.English Common Law regarded the objects clause as defining the capacity of the company, and not only the powers of those acting on its behalf. This approach, formulated at a time when it was impossible to alter the objects clause of the memorandum persisted even after the English legislature relented somewhat and permitted the objects to be altered, albeit with certain restrictions and according to a special procedure. This is still the approach in England today: the objects of the company are viewed as determining its capacity, and therefore, an act done in deviation from the objects is considered void, and cannot be ratified by the company, even if all the members wish to do so. At the same time, the European Communities Act 1972, affords protection to people transacting with the company in good faith, even in the case of a deviation from the objects (sec. 9(1)).

A Digest of Recent Israeli Cases

1984 ◽  
Vol 19 (1) ◽  
pp. 154-157
Author(s):  
Paul Sharon
Keyword(s):  
Supreme Court ◽  
Standard Form ◽  
Good Faith ◽  
The Supreme Court ◽  
Company Directors ◽  
General Part ◽  
A Company

This was an Additional Hearing granted by leave of the President of the Supreme Court for the purpose of considering the incidence, ratione personae, of the good faith requirement established under sec. 12 of the Contracts (General Part) Law, 1973. The significance of the decision lay in the question of the liability of agents and company directors who negotiate contracts to which they are not themselves party. In particular, the Court was called upon to consider whether, on the basis of sec. 12, a company director negotiating a contract solely on the company's behalf could be held personally liable in relation to that contract, or whether he could seek refuge behind the corporate veil.The respondent, David Castro (hereafter: the Purchaser), had negotiated with Yosef Pnini (hereafter: the Appellant) for the purchase of an apartment to be built by Pnidar, Development and Building Investments Company, Ltd. (hereafter: the Company). The Appellant was manager of the Company, and he and his wife were the sole stockholders. The Appellant and the Purchaser signed a standard-form preliminary agreement which the Company used for the sale of apartments in buildings that it constructed, and the Purchaser made all payments due for the purchase of the apartment. During the course of negotiations it was not revealed to the Purchaser that neither the Company nor the Appellant owned the property upon which the apartment was to be constructed.

CONTROLLING CONTRACTUAL DISCRETION

2013 ◽  
Vol 72 (1) ◽  
pp. 65-90 ◽  
Author(s):  
Richard Hooley
Keyword(s):  
Common Law ◽  
Good Faith ◽  
Reasonable Person ◽  
Discretionary Powers ◽  
Do So ◽  
The Way

AbstractThis paper identifies the source, content and limits of the controls that might be imposed by a court on the way a party exercises discretionary powers conferred under the terms of a contract. It is argued that such controls boil down to a requirement of “good faith”, in the sense that the party exercising the discretion must do so honestly, and that this can be tested by asking whether the decision is one that no reasonable person acting reasonably could have reached in the circumstances. It is suggested that a similar requirement should apply when a contracting party exercises a right to terminate for breach, whether at common law or under a termination clause.

scholarly journals Limits on Contractual Freedom

2019 ◽  
Author(s):  
Michael Bridge
Keyword(s):  
Common Law ◽  
Public Law ◽  
Good Faith ◽  
Fair Dealing ◽  
Contractual Term ◽  
English Law

Abstract This article is concerned with an important feature of English law that distinguishes it sharply from civilian systems of law and, to a lesser extent, from other common law systems—namely, its eschewal of an imposed duty of good faith and fair dealing. It will be shown that English law is receptive to such a standard in particular cases but that much of the ground that may be thought to be covered by good faith and fair dealing is covered instead by controls on the exercise of contractual discretion by reference to an implied contractual term that the discretion not be exercised in a way that is capricious, arbitrary, or irrational. This body of law has grown up in the last 30 years or so and has been influenced to a degree by public law considerations.

FORMULATING A FRAMEWORK FOR DIRECTORS’ DUTIES TO CREDITORS: AN ENTITY MAXIMISATION APPROACH

2005 ◽  
Vol 64 (3) ◽  
pp. 614-646 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
General Principle ◽  
Common Law ◽  
The Other ◽  
Financial Difficulty ◽  
English Law ◽  
A Company

IT is now well settled in English law, as well as in several other common law jurisdictions, that when their company is in some form of financial difficulty, directors cannot ignore the interests of their companies’ creditors, but rather they have a duty to their company to consider those interests. This is all well and good, but while this general principle has been stated on many occasions by various courts, the courts have been slow to define important aspects of this responsibility. There are two major issues that have not been clarified. The first is this: from what point is the duty to consider creditor interests imposed on directors? There has been no unanimous judicial pronouncement on this issue, and this has produced some uncertainty. We know with some certainty that the duty does not operate where a company is clearly solvent. At the other extreme, we have certainty in that courts have said that the duty does apply where a company is insolvent.

binds a company and its members under the terms of the memorandum and articles of association. In each case, there is separate provision for these varieties of contract under other legislation. Apart from the provisions of the 1999 Act, the third party’s rights arising under some other rule of law will remain unaffected. Thus, if an existing common law or equitable exception to the doctrine of privity of contract applies in favour of T, he may rely on that instead of invoking the provisions of the 1999 Act. This will be particularly important in cases in which T is unable to prove that he has relied on the term in the contract between A and B or in any other case in which the restrictive provisions of s 1 and s 2 might work against T. Thus, if T can establish the existence of a trust of the promise made in his favour or if he has an action in the tort of negligence or if some other statutory exception applies in his favour, T will still be able to avail himself of that alternative route. Although s7(1) only refers to T’s right under s 1, it must follow that the provisions of ss 2 and 3 are also inapplicable, since both of these provisions expressly state that they apply where T has relied on s 1. It has been seen above that at common law there is nothing to prevent the promisee from enforcing a term expressed to be for the benefit of the third party, if he wishes to do so. This position is preserved under s 4 of the 1999 Act.

1995 ◽  
pp. 805-806
Keyword(s):  
Rule Of Law ◽  
Common Law ◽  
Third Party ◽  
Alternative Route ◽  
The Third ◽  
The Third Party ◽  
Privity Of Contract ◽  
A Company ◽  
Made In ◽  
Do So

10. Company law II: directors, finance, and capital

2019 ◽  
pp. 143-159
Author(s):  
James Marson ◽  
Katy Ferris
Keyword(s):  
Common Law ◽  
Company Law ◽  
Public Companies ◽  
Essential Information ◽  
Minority Protection ◽  
Company Directors ◽  
The Common ◽  
The Law ◽  
A Company

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the law governing company directors and shareholders. The common law duties on directors have been codified and expanded through the Companies Act (CA) 2006. Directors are responsible to the company itself, not to individual shareholders. Minority protection (of shareholders) is provided through the CA 2006 to restrict directors’ acts that may unfairly disadvantage them. Public companies must have a company secretary and they must satisfy statutory requirements in relation to their qualifications. Shareholders have no automatic right of management in the company although, through attendance and the rights to vote at shareholder meetings, they may have influence over the business conducted.

16. Unconscionability and unfairness

2018 ◽  
Author(s):  
Elizabeth Macdonald ◽  
Ruth Atkins ◽  
Jens Krebs
Keyword(s):  
Bargaining Power ◽  
Common Law ◽  
Good Faith ◽  
The Other ◽  
Freedom Of Contract ◽  
English Law ◽  
Unfair Terms

This chapter is concerned with unconscionability, good faith, and inequality of bargaining power. It is often stated that there are no such general doctrines in English Law. Concerns about uncertainty clearly play a part in this, and there is a tension between freedom of contract and intervening in the bargain reached by the parties on the basis of its substantive unfairness. There has, of course, been legislative intervention in relation to the use of unfair exemption clauses and unfair terms, more generally, in the consumer context (see Chapters 10 and 11) and, before such legislation, in particular, judges were prepared to manipulate common law rules on incorporation and construction (see Chapter 9) to deal with unfairness. This chapter principally deals with cases in which the courts have intervened in a contract, or refused to enforce it, where one party had some weakness in his or her position, in relation to the other, and that other has gained unduly advantageous terms.

Good Faith in English Contract Law

2020 ◽  
pp. 187-232
Author(s):  
Mindy Chen-Wishart ◽  
Victoria Dixon
Keyword(s):  
Common Law ◽  
Contract Law ◽  
Good Faith ◽  
Fair Dealing ◽  
Legal Development ◽  
The Road ◽  
Ethical Content ◽  
English Law

Contrary to orthodoxy, good faith is no stranger to English law. Properly understood, we have been “speaking prose all our lives without knowing it.” The debate over whether to introduce a doctrine of good faith is therefore misconceived—the horse has bolted; the stable door has opened. Rather, the salient questions are: (i) How can a good faith requirement be justified? (ii) What role should it play in the evolution of English contract law? (iii) What does good faith require? And, (iv) how can we start to taxonomize its demands in order to stabilize its requirement? We support a humble role for good faith as an attitude of honesty, fair dealing, and fidelity to the contractual purpose that is, in turn, constitutive of the activity of contracting. These three aspects are manifest in many contract law rules that apply with different intensity and effect to the four categories of contracts that we identify. This is our proposed taxonomy “3 by 4.” Open recognition of this humble version of good faith will: make explicit the implicit ethical content of English contract law, enhance our understanding and organization of many apparently disparate rules, legitimize these rules and facilitate legal development in a manner consistent with common law incrementalism. This leaves open the policy questions of how far and how fast English law should travel down the road of good faith.

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