High Court ticks off Watchfinder board for refusing to issue options (Watson and others v Watchfinder.co.uk)

Table of contents

• Original news
• What was the background to the case?
• What were the issues in the case?
• Principles of construction
• Implied terms
• Did Watchfinder have an unconditional right of veto?
• Was the exercise of the veto subject to an implied duty?
• What did the Court decide?
• What are the practical implications of the case?

Article summary

Corporate analysis: In this case the High Court considered a provision in an option agreement which purported to give the company’s board an absolute veto over the exercise of the option. The High Court considered whether there was an implied duty on the directors not to act unreasonably, capriciously or arbitrarily in deciding whether to give its consent.