Business Law and Ethics (BUSLAW101) - Contractual Problems Report

This report delves into key aspects of business law and ethics, focusing on contractual problems within a company law context. It examines the concepts of "directing mind and will," emphasizing the individuals who guide a company's actions and decision-making, and explores the legal implications. The report also analyzes the doctrine of "piercing the corporate veil," which addresses the circumstances under which the separate legal entity of a company can be disregarded to hold directors or shareholders liable for their actions. Through case law analysis, including cases such as DPP v Kent and Sussex Contractors Ltd, Lennard’s Carrying Co. Ltd v Asiatic Petroleum Co. Ltd, Tesco Supermarket v Nattrass, and Salomon v Salomon Co Ltd, the report illustrates the practical application and significance of these legal principles in corporate governance and accountability. The conclusion reinforces the importance of these concepts in ensuring ethical business practices and legal compliance.

Running head: BUSINESS LAW AND ETHICS
Contractual Problems
Name of the student:
Name of the university:
Author note:

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Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Directing mind and will:.........................................................................................................2
Piercing the corporate veil:.....................................................................................................3
Conclusion:................................................................................................................................4
Reference:..................................................................................................................................5

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Introduction:
The principle regarding the two terms of the report is related to the company law. It is
to be stated that the phrases of this report have been important in nature regarding the legal
nature of the company and it is necessary to define the provision of the terms practically so
that it is possible to understand the scope of the two terms.
Discussion:
Directing mind and will:
There is no particular definition provided in any of the legislation regarding the
essentiality of the terms “directing mind and will”. It can be stated literally that the term
denotes the person who are generally directed the mind and will of the company (De Wet
2017).
It is a well principle of law that company has a separate legal entity and the company
will not be held liable for the wrongful acts of the directors or the shareholders of the
company. It is a fact that though the company is a separate legal entity and it is not liable for
any acts of the member of the company, it is not a person (Flint 2016). It is not possible for
the company to work alone without the help of the directors and stakeholders. In certain case
law, it has been observed that the directors will be held liable if there is any discrepancies
happened regarding the company matter. The same principle was adopted in the case of DPP
v Kent and Sussex Contractors Ltd [1944] KB 146.
The necessity regarding the directing the mind and will was followed in the case of the
Lennard’s Carrying Co. Ltd v Asiatic Petroleum Co. Ltd [1915] AC 705. The directors of
the company are usually engaged with the company affairs and take all the important

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decisions. It was observed by the court in Tesco Supermarket v Nattrass (1971) UKHL 1 that
if the Board of Director of any company had made any such breach, the affected party has the
choice to sue the company under the provision of directing mind and will.
Piercing the corporate veil:
The doctrine regarding the piercing the corporate veil is a general defence that support
the separate legal entity of the company. It has been proved by the court in several occasions
that a company cannot in any way be held liable for the wrongful acts of the management.
Therefore, it can be stated that the rights and liabilities of the company is quite different from
the rights of its corporal body (Lipsitt 2013).
It is a well principle of law that company has a separate legal entity and the
company will not be held liable for the wrongful acts of the directors or the shareholders of
the company. One of the essential cases regarding the matter is Salomon v Salomon Co Ltd
[1897] AC 22.
The doctrine has helped to standardised the role of a company and conceptualise the
fact that the directors of a company could not hide himself behind the legal veil of the
company. If there is any chance, law will restrain them to do so. The word corporate veil
prescribes the duty of a corporation as the duty of the shareholders. Piercing the corporate
veil is antonym to the word corporate veil. In this case, the director of the company will be
held liable for their own acts. It has been regarded that if any allegation made against the
company regarding the wrongful acts of the management, it is the duty of the court to find out
the offender without inking the legal character of the company (Yadav 2017).

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Conclusion:
Therefore, from the above-mentioned grounds it can be proved that both the
principles are important regarding the company affairs and certain provisions have been
imposed on the directors of the company for their wrongful acts.

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Reference:
De Wet, M., 2017. Directing'The Absolute': towards destabilising the victim/perpetrator
binary in Sam Shepard's A lie of the mind (1985) (Doctoral dissertation, University of
Pretoria).
Flint, D., 2016. Incentives, Employers, and the Corporate Veil: Should Domestic
Corporations Be More Accountable for the Actions of Their Overseas Subsidiaries?. Ariz. St.
LJ, 48, p.833.
Lipsitt, L.P., 2013. impression of outside objects, whether agreeable or offensive; but the
mind, possessed of a self-directing power, may turn its attention to whatever it thinks proper.
It should, therefore, be employed in the most useful pursuits, not barely in contemplation but
in such contemplation as may. Early Influences Shaping The Individual, 161, p.207.
Yadav, P.K., 2017. Lifting of Corporate Veil.