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    Irac Method

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    Maruch Maralit Amores
    King Ltd signed a contract to exclusively supply chemical goods to Bing Ltd, but later Bing Ltd discovered that King Ltd's wholly-owned subsidiary was selling identical goods to competitors at lower prices. The subsidiary was created by King Ltd to avoid its contractual obligations to Bing Ltd. The directors of Bing Ltd can ask the court to pierce the corporate veil of King Ltd's subsidiary and sue King Ltd for breach of contract, as precedents allow piercing the veil when a subsidiary is used to avoid a legal obligation.

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    Irac Method

    Uploaded by

    Maruch Maralit Amores
    139 views1 page
    King Ltd signed a contract to exclusively supply chemical goods to Bing Ltd, but later Bing Ltd discovered that King Ltd's wholly-owned subsidiary was selling identical goods to competitors at lower prices. The subsidiary was created by King Ltd to avoid its contractual obligations to Bing Ltd. The directors of Bing Ltd can ask the court to pierce the corporate veil of King Ltd's subsidiary and sue King Ltd for breach of contract, as precedents allow piercing the veil when a subsidiary is used to avoid a legal obligation.

    Original Description:

    Method for creating a case brief, typically used in the U.S.

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    King Ltd signed a contract to exclusively supply chemical goods to Bing Ltd, but later Bing Ltd discovered that King Ltd's wholly-owned subsidiary was selling identical goods to competitors at lower prices. The subsidiary was created by King Ltd to avoid its contractual obligations to Bing Ltd. The directors of Bing Ltd can ask the court to pierce the corporate veil of King Ltd's subsidiary and sue King Ltd for breach of contract, as precedents allow piercing the veil when a subsidiary is used to avoid a legal obligation.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Download as rtf, pdf, or txt
    139 views1 page

    Irac Method

    Uploaded by

    Maruch Maralit Amores
    King Ltd signed a contract to exclusively supply chemical goods to Bing Ltd, but later Bing Ltd discovered that King Ltd's wholly-owned subsidiary was selling identical goods to competitors at lower prices. The subsidiary was created by King Ltd to avoid its contractual obligations to Bing Ltd. The directors of Bing Ltd can ask the court to pierce the corporate veil of King Ltd's subsidiary and sue King Ltd for breach of contract, as precedents allow piercing the veil when a subsidiary is used to avoid a legal obligation.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
    Download as rtf, pdf, or txt
    of 1

    King Ltd is a manufacturer of chemical goods.

    It signed a contract with Bing Ltd a large discount


    retailer. According to the contract, King Ltd was to supply the manufactured goods exclusively to
    Bing Ltd. Later, the directors of Bing Ltd discover that there is a wholly-owned subsidiary of King
    Ltd which sells identical chemical goods to competitors at cheaper prices. It turned out that the
    subsidiary was included to enable King Ltd to avoid the consequences of the contract with Bing
    Ltd. Provide advice for the directors.

    Issue: The main legal question is whether it is possible here to pierce the corporate veil.

    Rule: The legal principle that should be applied, established in Malodan’s case is that a company
    is an independent legal identity from its members and directors. But there are exceptions when
    it is possible to pierce the corporate veil. In the case of Buildnord Lotor Co Ltd v Borne, it was
    decided that the corporate veil can be pierced if a wholly owned subsidiary was made by a
    company to avoid a legal obligation.

    Application: In this case, King Ltd organized the subsidiary company to avoid its obligations under
    the contract to supply its chemical goods exclusively to Bing Ltd.

    Conclusion: The directors can ask the court to pierce the veil of the wholly-owned subsidiary of
    King Ltd and sue King Ltd for the break of contract.

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