ABSTRACT

Percival v Wright (1902) The plaintiffs were the registered owners of shares in a company. Negotiations took place and eventually a sale of the shares was agreed, to the chairman and two other directors of the company. The plaintiffs subsequently learnt that, prior to and during their own negotiations, the board of directors had been approached by a third party with a view to the purchase of the entire undertaking of the company at prices far higher per share than that agreed in the sale. These negotiations ultimately failed. The plaintiffs brought an action against the chairman and the two directors asking to have the sale set aside on the ground that the directors ought to have disclosed the negotiations with the third party for the sale of the company’s undertaking.