Corporate law Essay Example | Topics and Well Written Essays - 1250 words

Corporate law - Essay Example Sarah, who bought a hotel from Nigel, later realized that the physical condition of the building, housing the hotel, was not in perfect condition as she had been led to believe, by her architect friend, is putting Nigel the proprietor of Colchester Suppliers through litigation. The financial performance of the hotel was also not, in accordance with what the hotel’s accountant had projected to her. Upon the revelation of these discrepancies, Sarah suffered a nervous breakdown, which she squarely blames on Nigel and is suing for responsibility. Sarah’s case against Nigel is a typical case of obligatory law, which integrates personal duty into the law governing such transactions between individuals and corporations. Nigel is not responsible for any wrongdoing, on his part because on the part of the financial performance of the hotel, the accountant made it clear to Sarah that the information presented was without responsibility, on his part, as the accountant. The fact tha t the accountant provided this information, when giving Sarah financial information pertaining to the hotel, shows that Sarah had an obligation to seek an alternative and independent opinion about the hotel’s accounts. This would have helped her make a better judgement of the hotel’s financial position and decide if it was worth her attention. She should not lay blame on Nigel, as the owner of the hotel, because it should have been that the account’s opinion would be bias, in favour of the hotel he or she has been catering for. The accountant’s actions could be partly due to the desire to portray the hotel in a positive light for retaining their position as employees in the event of a transfer of ownership. This transfers part of the blame to the accountant who should be held liable for their actions because the law under the obligations rule subjects them to the duty of telling the truth on facts and knowledge they are privy to (Golding & Edmundson, 2008 p148). Under corporate law, obligation to conform to social rules like telling the truth requires that a sanction be carried out against the accountant because of his/her actions. Obligations of this nature, under the law, make it a duty for someone to conform to some social rules that govern practices in businesses. These obligations are subject to a sovereign authority to obey where the command requires the conveyance of a will and awareness of the attached risk involved in suffering a sanction for non-compliance (Dimond, 2009 p180). Nigel, on his part, did not refuse to divulge information concerning the financial position of the hotel or opinion because Sarah never asked for it. If he had given his opinion, it can be held that he lied about the financial state of the hotel so He should be exonerated of any blame in matters relating to the finances of the hotel. However, at the same, it makes it his duty to ensure that his employee observed the appropriate moral conduct of confo rming to social rules because the accountant was in his employ. His failure to make it his duty and obligation casts some responsibility to him for his accountant’s actions. The obligation law casts more negligence on the buyer and the accountant because they did not do what was meant to be their duty under the law (Davies, 2011 p 318). Sarah consulted her architect friend, Liz, to assess the building the hotel was housed in, and this shows that she