Industrial Development Consultants Ltd v Cooley

Facts

Cooley, managing director of IDC, was offered a contract by a gas board that would not deal with IDC. He left IDC by pretending to be ill and took the contract himself.

Issue

Was Cooley liable to account for the profits?

Held

Yes. The information came to him as managing director, and he had a duty to pass it on. He had to account even though IDC might not have obtained the contract.

Principle

A director must not divert to himself an opportunity that came to him in his capacity as director.

Why it matters

It applies the no-conflict rule to corporate opportunities.

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