Business Flashcards
A shareholder in a company passes away, leaving shares in the company as part of their estate. The PR of the deceased wishes to transfer these shares to a beneficiary of the estate but is not currently a member of the company.
How can the PR of the deceased execute the share transfer, and what is the legal effect of this action?
The PR can create an instrument of transfer for the shares and it is as effective as if they were a member fo the company
Man purchased business from a plc through a sale agreement.
Agreement stated the company’s shareholders would settle the “current” liabilities of the business, but it did not expressly identify any third party or class of third parties by name.
The man also undertook to complete outstanding customer orders and to assume responsibility for any liabilities incurred after the purchase.
A dissatisfied customer, who had placed an order before the business was sold, brought a claim against the man. The customer argued that the sale agreement conferred a benefit on him under the Contracts (Rights of Third Parties) Act 1999 and that he should be entitled to enforce the agreement against he man to recover for his loss.
Is the customer likely to succeed in his claim against the man?
The customer is unlikely to succeed, because he was not expressly identified in the sale agreement as required by the Act.
For a third party to enforce a term of contract, the contract must…
the contract must expressly identify the third party by name, as a member of class, or by description.
Themis Avraadmides and another v Colwill [2006] emphasises the strict requirement for express identification, ruling out any process of implication or construction to infer third-party rights.
What is the Duomatic principle
allows for the informal assent of shareholders to govern corporate decisions without the need for formal resolutions or meetings, provided these shareholders unanimously agree
