Company Law (overview od development of company law in cwc Caribbean)



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Company Law Notbeook
THE SALOMON PRINCIPLE OF WHAT RELEVANCE
Recession; restore parties to original position

  • Whatever contract was entered to has to be cancelled

  • Bars to recission

  • Time lapse- company take too long to bring action

  • Affirmation- where the co. has adopted the contract

  • If a third party has acquired a right to the subject matter

  • Subject matter has been destroyed


  • Damages ; seek for breach of fiduciary duty

  • Restitution; order promoter to repay the company due to secret profits/ non- disclosure


  • Suggest remedies the company can seek against the promoter

  • Compensation is a form of remedy that an INDIVIDIUAL can bring against

  • Under s 67 of the co act 1985 UK it provides for persons with a statutary right to claim compensation from promoters who were induced to take shares or debentures by an untrue statement in the prospectus

  • Meaning that if persons based on the prospectus posted by the promoters and purchase shares and suffer a loss; they can individually bring an action against the promoter



  • effect of Pre-Incorporation Contract on a company after it has been formed
    General rule: a company could never be made liable fo a pre-incrop. Contract
    Such contract entered into by a promoter would make the promoter personally liable
    Common law position: created confusion;
    Kelner v Baxter the promoters signed the contract with the other party ( supplier of wine) for and on behalf of the company; promoters were signing as agent of a company that was NOT YET FORMED and thus they were held personally liable
    Courts said promoter could not be an agent of a “principal” i.e. it did not exist yet

    • Further said, after the company as formed, the Co. could not ratify action of promoter

    • Co. sold wine thus adopted contract; but could not ratify a contract when they did not exist

    • The only way it could’ve ratify contract THE COMPANY HAD TO BE IN EXISTANCE IN THAT TIME


    • Newbourne: the promoter signed not as an agent but merely to authenticate a contract that he, the promoter, felt the co. was already a party to i.e. the promoter in this case never purported to be an agent of the company or for the company to be formed.


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