Disclosure and Declaration of Interests

One instance of obvious conflict between the interests of the company and those of a director concerns contracts entered between the director (or an individual or entity associated with the director) and the company, also referred to as ‘self-dealing’. A classic example of self-dealing is the case of Aberdeen Railway Company Ltd v Blaikie Brothers, in which the director and chair of a company, Mr Blaikie, had a conflict of interest due to his role as managing partner of the firm that supplied office furniture to the company. This case was outlined in Chapter 4 where it was shown that, despite the fact that the price paid for the furniture was fair, the company was entitled to have the contract set aside due to Mr Blaikie’s conflict. Interestingly, some jurisdictions now provide a defence where the contract is fair to the company. Case law from each of the jurisdictions provides a rich source of examples of such conflicts. These include payment for services or purchase of goods, transfer of company money or assets to directors and their associates, and usurpation of company business. Some of these cases involve multiple directorships and corporate opportunities, which are more specifically discussed in Chapters