An agreement was entered into between T and C, whereby, as interest for an advance made by T for the purpose of carrying on and extending the business of C’s firm, he was to receive a certain percentage of the profits of the business. It was provided that the books of the firm should be audited annually by a particular firm of accountants, whose certificates ‘shall be binding on both parties as finally fixing the amount of the profits in each year.’ Notice of this agreement and of its terms was given by T to one of the partners of the firm of auditors, but they were not communicated by him to the partner who actually conducted the audit. While aware that T had an interest in the profits, the latter did not know the terms of the agreement, and in particular did not know that his audit was finally binding on the parties. T had access to the books of the firm, and had frequent meetings with the auditor.
In an action for a judicial accounting raised by T at the termination of the agreement, he maintained that the auditor’s certificates were not binding on him, because the audits made were not such as were contemplated under the agreement.
Held, on a proof ( diss. Lord Adam), that the certificates of the auditor were certificates under the agreement, and that accordingly the pursuer was not entitled to an accounting.
Lord Low
[1898] SLR 35 – 517
Bailii
Scotland
Cited by:
Appeal From – Teacher v Calder HL 24-Jul-1899
The mere fact that the defendant’s breach of his contract with the plaintiff has enabled him to enter into a more profitable contract with someone else should also not be sufficient to justify departing from the normal rules for calculation of . .
Lists of cited by and citing cases may be incomplete.
Contract, Damages
Updated: 08 January 2022; Ref: scu.612185