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Snelling v Snelling

[1973] QB 87

Case summary last updated at 03/01/2020 16:43 by the Oxbridge Notes in-house law team.

Judgement for the case Snelling v Snelling

P and Ds were directors of a company and were all owed a lot of money by the company. They signed a contract saying that if one of the directors resigned, they would forfeit the money owed to them by the company. P then sued for the money owed to him by the company. Court sad that although normally an agreement not to sue a 3rd party was unenforceable, it could be enforced (i.e declaration was given that P had forfeited money owed to him) where the promisee had a sufficient interest in TP not being sued. In this case the other directors were also owed money and therefore they had a sufficient interest to enforce the agreement. Van der lahn’s correct interpretation is that a stay on an agreement not to sue is unenforceable unless it is precise. However the company itself could not itself stay the action since it cannot enforce someone else’s agreement. 

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