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Downing Ltd specializes in IT installations for retailers. Sam, a director of Downing Ltd, was approached in a private capacity as a well-known expert in the field and invited to join the board of...

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Downing Ltd specializes in IT installations for retailers. Sam, a director of Downing Ltd, was approached in a private capacity as a well-known expert in the field and invited to join the board of Twilight Ltd, whose business mirrors to a certain extent of Downing Ltd’s business. Sam accepted the invitation to be their director while remaining on the board of Downing Ltd. Having developed a rival system to Downing Ltd, Twilight Ltd organized a public launch of the new product. For the launch, Sam contacted a number of Downing Ltd’s clients. The launch led to the signing up of a number of major clients, including some clients of Downing Ltd. Questions: (1) Advise the board of Downing Ltd whether Sam has breached any legal duty to the company. (2) Would your answer be different if Sam resigned from Downing Ltd before he joined the board of Twilight Ltd? State your reasons.



Answered 802 days After Oct 07, 2019

Solution

Sanjukta answered on Dec 18 2021
123 Votes
1) As per the case study, it is quite evident that Sam being a member of the board concerning of the Downing Limited, contacted the major clients of Downing Limited specifically for Twilight Ltd.’s new product launch. By doing this he directly
eached the legal duty of the firm as this act is in
each of director’s fiduciary duty. To be specific a fiduciary is an individual who tends to hold an ethical or legal relationship of trust with one or more than one party. Particularly in most of the cases, fiduciary tends to take care of money or any other assets for another individual. Throwing light on the above-mentioned discussion it is quite evident that Downing Ltd is entitled for claiming damages against Sam. As per law, directors own their firm fiduciary duties in terms of acting in good faith as well as exercising care and also a...
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