Controlling contractual discretion

In 1993 Leggatt L.J. said in Abu Dhabi National Tanker Co. v. Product Star Shipping Ltd. (The Product Star) [1993] 1 Lloyds Rep. 397, 404: Where A and B contract with each other to confer a discretion on A, that does not render B subject to A’s uninhibited whim. In my judgment, the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably.

Registered social landlords: private enterprise (f)or public good?

Millions of homes previously owned by councils have been transferred to the ownership of registered social landlords. Many of these are run as private companies under the principles first set out in the Combined Code of Corporate Governance. This articled considers whether it is appropriate to apply both the principles of the Code and regulation from the Housing Corporation as forms of control over such companies, and whether extensive government regulation negates the requirement for a board comprising independent directors expected to make strategic decisions while overseeing the executive. Conflict is created when trying to run these companies with a unitary board structure adhering to Combined Code principles while considering the wider interests of the community. It is questioned whether it is inefficient to try to meet these two objectives simultaneously and whether this system produces the best results for the community, the lenders and the end users.