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Fulham Football Club Ltd v Cabra Estates plc

[1994] 1 BCLC 363

Case summary last updated at 22/01/2020 16:50 by the Oxbridge Notes in-house law team.

Judgement for the case Fulham Football Club Ltd v Cabra Estates plc

Football club had football ground on lease. In return for substantial payment, directors of club agreed not to oppose any future planning applications which owners of the ground might make. Sought to get out of contract by alleging it was unlawful fetter of their duty to act in best interests of club in future. Held:
·       Performance of a contract is not breach of s.173 if director exercised independent judgment when entering into the contract
·       Thus provided D believed contract was for benefit of company at time he entered it, cannot claim later on that contract stops him acting for benefit of company
·       Here, directors entered agreement which substantially benefitted company
Ø  Thus cannot be said that they improperly fettered their future discretion

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