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Three-ring circus

Annette Roberts explains how s 36C(1) of the Companies Act 1985 may have unexpected consequences for solicitors

25 April 2003

Occasionally a solicitor may sign a contract as solicitor and agent for a client. The circumstances when s/he may do so will be regulated by the firm’s protocol. The rules of agency will apply to the arrangement between the solicitor and his principal, the client. Where the client is a company, different considerations arise because of the artificial nature of a company. For some time Parliament has intervened to protect third parties when dealing with a contract purportedly made on behalf of a company and this is dealt with in s 36C(1) of the Companies Act 1985: “A contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.” Braymist case Braymist Ltd v Wise Finance Company Ltd [2002] EWCA Civ 127 highlights the impor...

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