Rayfield v Hands is a UK company law case, concerning the enforceability of obligations against a company.

Facts

Mr Rayfield sued the directors of Field Davis Ltd to buy his shares. Article 11 of the company’s constitution said ‘Every member who intends to transfer shares shall inform the directors who will take the said shares equally between them at a fair value.’ The directors were refusing to follow this rule, and Mr Rayfield sought an injunction.

Judgment

Vaisey J granted the injunction and held the article imposed an obligation on the directors, not as officers, but also in their capacity as members. He referred to Re Leicester Club and County Racecourse Co where Pearson J referred to directors as ‘worker members of the company’ and that ‘they are doing their work in the capacity of members, and working members of the company’. He referred to the privity decisions of Denning LJ in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board

Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board

Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 is an English contract law case, notable for Denning LJ's views concerning privity of contract.-Facts:...

and Drive Yourself Hire Co (London) Ltd v Strutt and also Carlill v Carbolic and The Satanita

The Satanita

The Satanita [1897] AC 59 is an English contract law case, which in the Court of Appeal, concerned the formation of a contract. It is notable because it stands as an example of a case which does not fit the typical pattern of offer and acceptance that English law purports to require to find...

to say that the company did not need to be joined to the action to bring it, even though a members create a contractual relation with the company.

See also

• UK company law
• Capacity in English law
  Capacity in English law
  --------Capacity in English law refers to the ability of a contracting party to enter into legally binding relations. If a party does not have the capacity to do so, then subsequent contracts may be invalid; however, in the interests of certainty, there is a prima facie presumption that both...
  
  
• Agency in English law
  Agency in English law
  Agency in English law is a component of UK commercial law, and forms a core set of rules necessary for the smooth functioning of business.-Authority:...
  
  
• Bratton Seymour Service Co Ltd v Oxborough [1992] BCC 471