Case Study Corporate and Business Law Fran and Gill

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Case Study Corporate and Business Law Fran and Gill

Case study

Fran, Gill and Harry

  1. What are the legal consequences (if any) of this contract for the company?

This company is a private limited company, where decisions like that cannot make a one of the directors without acceptance of other directors. Therefore, Fran exceeds her authority and concluded contract with Grace. In this case, Fran in role of agent of the company, Grace is the third part. Gill and Harry does not ratify this contract, then Fran liable to Grace for breach of warranty of authority, because she accepted and warranted she had authority, which she did not possess.         

  1. Please describe Fran’s responsibility and liability as a director. What Gill and Harry need to do to remove Fran from his position (if they legally can)?

The relevant statutory duties of the directors of a company are to act bona fide in the interests of the company, to use their powers for a proper purpose (that is, not for any collateral purpose) and to avoid conflicts of duty and personal interest

A director must show undivided concern for the company’s interests, regardless of whether or not the company is prejudiced by a conflict of interest.

These duties are owed to the company as a separate legal person and not the shareholders. Any action for breach of duty must therefore be brought by the company. Fran appears to be in clear breach of her fiduciary duties and so it is open to the company to bring proceedings against her to recover any losses suffered as a result of her actions.

  1. Please advise whether they can do it in 2017 and what could be their maximum dividends in 2017.


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Case study

“Fran, Gill and Harry”

Checked by: Ainash Alpeisova

Created by: Gabit Zhandarbekov

Astana 2017

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  1. Please advise whether they can do it in 2017 and what could be their maximum dividends in 2017.