Recently A has shown himself to be somewhat impetuous in his dealings with hotel bookings. So last month the board passed a resolution restricting the expenditure limit on hotel bookings to £5000 per month per director per hotel. This month, A, who in good faith thinks that cheaper, “no frills” hotels are the best way forward for the JS, has been arranging hotel contracts on behalf of JS at a cost of some £6000 to £8000 per month per hotel thinks this will mean cheaper but more package holidays to sell to younger customers in a time of austerity.
Whilst A was in Spain last month checking holiday resorts, he found a resort on the Spain coast with many local hotels each with much spare bed capacity. Realising that JS would probably not wish to commit to too many non-exclusive type holidays, he contracted to purchase them all in his own name.
what issues in regards to directors duties occur in these facts?
company law Watch
- Thread Starter
- 24-04-2016 11:29
- 26-04-2016 18:14
Acting out with his scope of authority and breach of duty to avoid conflict of interest (i.e. in his self dealing).
Also breach of s172 Companies Act 2006 to promote the best interests of the company.
Simons case (sorry I cannot remember the full citation), states that directors owe the s172 as a fiduciary duty to the company.
Hope this helps, sorry i haven't looked over my company law notes in ages !