Wright v Atlas Wright (Europe) Ltd [1999] B.C.C. 163

• Service contract was entered into between company and Claimant (the former managing director of company) appointing him consultant for life.

• No written resolution was passed by shareholders approving service contract, as required by what is now s.188 in relation to directors’ service contracts of longer than certain period of years.

• However all the company’s shareholders were informed of arrangement and consented to it.

Neuberger J

• If person for whose benefit a procedural requirement exists waives the right, informal consent is valid.

  • I.e. anyone with a procedural right is competent to waive that right

• However doubted whether it is possible to use informal procedure where calling of meeting is for benefit of:

  • Future members 

  • Creditors

Facts

• Purpose of what is now s.188 is protection of company’s members.

• Thus members, as those protected by section, can override any formal requirements in section.

• Therefore service contract was binding on company.