Any Affiliates, directors, officers, employees, contractors or professional advisers

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A long brown turd of an expression that fails in its tedious flatulence to comprehend basic motifs of civil law, such as the essential agency through which all disembodied corporate entity of necessity operate, and notion of privity of contract by which there is but one person — said disembodied corporate entity — who has committed to provide goods or services, and is entitled to reap the fruits awarded by way of consideration, under the contract.

Liabilities: at least insofar as she sets about her task in in good faith (and, by and large, even if she doesn’t), a human acting as the instrument of her disembodied employer, however delinquent she may be in practice, acquires no personal liability to her employer’s counterparties for the competent discharge of its contractual obligations. If she did, my friends, we would all engage in our professional employment with a far greater sense of apprehension than we in any case do. So one does not need to excuse those employees, much less inferior agents and lawyers or affiliates, from the vicissitudes of contractual liability. It goes without saying.[1]

Privity: By the same token, the benefits of that contract — its “fruits”, so to speak — accrue, as far as the counterparty is concerned, exclusively to said disembodied corporate entity, and not — except inasmuch as they show up in salaries and professional fee disbursements — to those employees or agents in their personal capacities, much less for any of the company’s affiliates.[2] Yes, it may be true that one part of the group enters with the intention of benefitting others, but it remains the sole contact point and is the correct entity through which to engage should any argument need to be had. If you have taken contractual relations within your group seriously, those fruits the contracting entity wishes to share should be the subject of some different, internal contract, the failure to supply fruit under which would represent a compensable wrong by the contracting entity. Should its affiliate be nursing a loss as a result, its quarrel is with its sister company which has not provided the fruit it was meant to: even though the fruit-provision failure is, indirectly, a third party’s fault, it is not the affiliate’s business to launch direct contractual proceedings against that third party. It should follow the paper trail, and register its a claim with its sister, with whom it is contracted, who in turn now has a demonstrable loss with regard to which it may seek damages against that real third party wrongdoer.

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References

  1. We employees certainly do acquire contractual liabilities for such failings to our own employer, of course — that is the quid pro quo of contractual privity.
  2. All the more so where, as inevitably it will, the contract expressly disavows the creation of any actionable benefit for any third party under the Contracts (Rights of Third Parties) Act 1999.