Disclaimer: This work was produced by one of our expert legal writers, as a learning aid to help law students with their studies.

Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. Any information contained in this case summary does not constitute legal advice and should be treated as educational content only.

Jobson v Johnson

296 words (2 pages) Case Summary

07 Mar 2018 Case Summary Reference this LawTeacher

Jurisdiction / Tag(s): UK Law

Jobson v Johnson [1989] 1 WLR 1926

Company law – Contract terms – Penalty clauses – Jurisdiction

Facts

The plaintiff owned 44.9% of the share capital of a football club and contracted to sell the shares to the defendant, by way of the defendant’s nominee for £40,000 with further instalments of £311,698 to be paid at later dates. The contract held that if the instalments were not paid, the shares could be transferred back to the plaintiff for £40,000. The defendant defaulted on the payments and the plaintiff brought an action to transfer the shares. The defendant argued that the clause was a penalty clause and counter-claimed against having to forfeit the shares. The trial judge held that the clause requiring the transfer of the shares was a penalty but was enforceable. The defendant’s counterclaim did fall under the judge’s discretion, but did not succeed on the basis that it had not complied with required undertakings. The defendant appealed this decision.

Issue

There were two clear issues for the court to clarify. The first was whether the clause in the contract was considered as a penalty clause, which could be restricted by the court and the second was whether the defendant could counterclaim for relief from the forfeiture of the shares.

Decision/Outcome

The court found that the clause was a penalty clause that punished the defendant for defaulting in paying in the defendant, particularly as the re-purchase price was less than the amount the defendant had paid in total. It was not a genuine measurement of the plaintiff’s loss. However, as the counter-claim had been struck out, there could not be relief for a time extension to pay the balance. The court allowed there to be specific performance to the extent that the penalty did not exceed the plaintiff’s loss.

LawTeacher

LawTeacher

LawTeacher.net is the UK's leading provider of academic legal support, offering both writing services and an extensive collection of law study resources for students in the UK and overseas.

Founded in 2003 by Grey's Inn graduate Barclay Littlewood, the Company was built on a commitment to excellence, with unique guarantees and a high standard of service from day one.

The team includes over 500 UK legally qualified writing experts, with many practising solicitors and barristers, and several former lecturers.

Areas of Legal Expertise

Contract Law Criminal Law Constitutional and Administrative Law EU Law Tort Law Property Law Equity and Trusts Jurisprudence Company Law Commercial Law Family Law Human Rights Law Employment Law Evidence Public International Law Legal Research and Methods Dispute Resolution Business Law and Practice Civil Litigation Criminal Litigation Professional Conduct Taxation Wills and Administration of Estates Solicitors’ Accounts

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

Related Content

Jurisdictions / Tags

Content relating to: "UK Law"

UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.

Related Articles

Prices from

£ 99

Estimated costs for: Undergraduate 2:2 • 1000 words • 7 day delivery

Place an order

Delivered on-time or your money back

Reviews.co.uk Logo (292 Reviews)

Rated 4.2 / 5

Give yourself the academic edge today

Each order includes

  • On-time delivery or your money back
  • A fully qualified writer in your subject
  • In-depth proofreading by our Quality Control Team
  • 100% confidentiality, the work is never re-sold or published
  • Standard 7-day amendment period
  • A paper written to the standard ordered
  • A detailed plagiarism report
  • A comprehensive quality report