The Proper Purpose Rule
 Lloyd's Maritime and Commercial Law Quarterly 176-185
10 Pages Posted: 27 Mar 2017
Date Written: May 26, 2016
The proper purpose rule ‘is the least discussed and least well understood of the fiduciary obligations affecting a director’. We were recently reminded by the UK Supreme Court in Eclairs Group Ltd. v. JKX Oil and Gas plc. that the rule imposes different requirements on directors when contrasted with their duty to act bona fide in the interest of the company. There may, however, be a but-for causation requirement which protects directors where they would have come to the same conclusion had they only acted properly.
Keywords: Eclairs Group Ltd. v. JKX Oil and Gas plc., directors’ duties, proper purpose rule, mixed purposes, causation, disclosure of interest in shares
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