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Premier Waste Management Ltd v Towers [2011]
This case presents a timely reminder to directors regarding the extent of their duties to a company. In particular, directors need to be aware of just how far their fiduciary duties and their duties of loyalty extend when conflicts of interest arise.
This case concerns The Commercial Agent's (Council Directive) Regulations 1993 which were introduced to regulate the relationships between commercial agents and their principals.
Pure economic loss, ie. loss which is not consequential upon some direct physical damage or injury, is not generally considered recoverable in claims for compensation relating to negligence. The basis of such claims is the law of tort in which courts seek to restore parties to a position had negligence not occurred.
Most people understand fraud in the criminal sense whereby an individual makes an intentional deception for personal gain or to damage another person. However, fraud plays an equally important role in civil law, primarily where it is used to induce parties into contract. In this context it is generally dealt with by the Misrepresentation Act 1967 but its earliest legal definition arose at common law.
Ratification is a process whereby a principal approves the actions of an agent who has acted to bind that principal without preceding legal authority. The concept applies to a variety of circumstances such as international treaties and constitutional changes but its most pertinent day-to-day application relates to contract law.
Following on from Part I, in which we set out the definition of ratification and the conditions required for it to be applied, we now examine what actions are capable of being ratified, how ratification is applied and its legal effect.
Misrepresentation is generally understood to be a false statement of fact made by one party to another. It is most relevant in the context of contract law whereby one party attempts to induce another into a contract on the basis of words or conduct that amount to false statement. Where a claimant proves misrepresentation the remedies available may include rescission or damages.
After the basic principles were established for actions in misrepresentation, there were various elements that became refined through judicial interpretation. These requirements shaped the concept into its modern form and may be summarised as follows:
The litigation process can be exceedingly costly for both parties in a dispute. The civil procedure rules (CPR) which have applied to all civil cases in England and Wales since 1999 were designed to improve access to justice by making legal proceedings cheaper, quicker and easier to understand.
The Transfer of Undertakings (Protection of Employment) Regulations, known as TUPE, protect employment contracts when a business, part of a business or service provider changes ownership. Two types of changes invite protection:
There are important distinctions between the roles of shareholders and directors even when an individual or a number of individuals occupy both roles. The separation between the two positions should be borne in mind when a company is established because ownership of a company and management of a company entail different rights and responsibilities. The interaction of the two roles plays an important part in the smooth functioning of a company.
The legal remedy of unfair prejudice seeks to protect the rights of minority shareholders from detrimental actions by majority shareholders. Provisions contained in s994 Companies Act 2006 enable aggrieved shareholders to bring an action against the company.
Contractual negotiations can provide parties with plenty of contentious material for subsequent litigation if relationships sour. One of two litigious approaches is usually taken when commercial relationships become strained: claims for breach of contract or claims for misrepresentation.
Misrepresentation is a false statement of fact made by one party to another, which can induce a party to enter into a contract. A negligent misrepresentation is a statement that is made carelessly or without reasonable grounds for believing it to be true.
Loss of opportunity is something that individuals and businesses encounter every day. Normally it is just part and parcel of the decision-making process but where it is the result of a breach of contract or fraudulent misrepresentation, loss of opportunity is capable of justifying legal action. It should be noted though that a claim for loss of opportunity based on misrepresentation presents significant challenges.
The ongoing economic malaise continues to see businesses succumb to the pressures of financial hardship each day. When companies are on a downward spiral it can be very difficult for managers to know what their best options are; inaction can mean that that decision-making is abruptly taken out of their hands.
