Snelling v John G Snelling Ltd [1973]

Facts

  • In a family business, 3 brothers loaned money to their business, on the agreement between themselves that if any of them resigned as a director, they would forfeit their loaned money
  • One brother resigned and attempted to recover the money he was owed

Issue

  • Could the remaining 2 brothers rely on a contract to which the company was a third party

Decision

  • Yes, claim failed

Reasoning

  • A family agreement can have legal implications, the agreement could be relied upon
RELATED CASE  ASB Bank v Harlick [1996, New Zealand]

Posted in Contract Law Revision Notes.

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