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s.177 Duty to declare interest in proposed transaction or arrangement -…

- - - - However, if Director A is not sure whether it's a good idea or not. Director B can make a full and frank disclosure to the GM and seek approval under s.180(4)(a). or also ratification.
      - If Director B does not provide advanced disclosure of his interest in the contract, the contract may be rescinded. Lose the right to rescind the contract when third-party rights intervene. For instance, if the goods that were contracted for are passed on to a third party. (contract law)
  - - - If director B was also a director in company 2 then we would have competing directorships. In this situation there would be a potential conflicts of duties under s.175(7) and so s.175 would apply.
      - Director B Must make advanced disclosure of his interest or make a full and frank disclosure seeking approval or ratification from the GM.
- - - - The Companies (Tables A to F) Regulations 1985, SI 1985/805, Table A, art 85 provided as follows: ‘Subject to the provisions of the Act, and provided that he has disclosed to the directors the nature and extent of any material interest of his, a director notwithstanding his office—(a) may be a party to, or otherwise interested in, any transaction or arrangement with the company or in which the company is otherwise interested; (b) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the company or in which the company is otherwise interested; and (c) shall not, by reason of his office, be accountable to the company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.’
- - - - Gwembe Valley Development Co Ltd v Koshy [2004] 1 BCLC 131 at [144]–[145]
        
        (director liable to account for profit made on undisclosed conflict of interest in transaction with the company despite the contract having long been performed and therefore incapable of being set aside)