Fulham Football Club Ltd v Cabra Estates plc [1994] 1 BCLC 363

• 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 Defendant 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

  • Thus cannot be said that they improperly fettered their future discretion