Lipman v Jones

COMPANY LAW
CIA - 1

Group K
-Jiya Jaiswal 2311490
-Eliza Kushwaha 2311486
-Krishnam Hirani 2311494
-Saksham Walia 2311487
The legal case of Lipman v. Jones explores the nuances
of equitable remedies and contract law, especially with
regard to the enforceability of specific performance. In
situations where a party's contractual obligations are
unique or irreplaceable, like in the sale of real estate,
the court may grant specific performance as a legal
remedy.

The primary issue in Lipman v. Jones is Lipman's

attempt to break his agreement to sell Jones the
property. Because Lipman had already entered into a
legally binding contract when he agreed to sell the
property for £5,250, Jones, the party who had been
wronged, requested specific performance to make
Lipman carry out the sale.

Subsequently, Lipman established his own company

with no capital and transferred the property to it for a
discounted £3,000 price, which prompted serious legal
and moral concerns. In evaluating the transaction, the
court had to take Lipman's evident control over the
newly established business into account. The fact that
the company is described as a "mask to avoid
recognition by the eye of equity" suggests that the
court was aware of Lipman's attempt to bypass his
contractual obligations by using the corporate structure
as a shield.

The court has acknowledged the need for a prompt

resolution in this case, as evidenced by its decision to
apply the Rules of Supreme Court Order 14A. These
regulations, which usually control summary judgement
or the striking out of claims, imply that the court
understood how urgent it was to deal with Lipman's
attempt to evade the original contract.

Determining that Lipman's business was a fraud,

founded and run exclusively to get out of contracts,
was a key factor in the court's decision to order specific
performance. This emphasises the court's dedication to
maintaining fairness standards and stopping parties
from unfairly evading their contractual obligations
through the use of corporate structures or other
strategies.

In essence, Lipman v Jones serves as a notable example

of the court's willingness to scrutinise transactions and
corporate entities when there is a suspicion of evasion
of contractual duties. The ruling reaffirms that
equitable remedies, such as specific performance, may
be awarded to ensure fairness and justice in
contractual relationships and that the court will not put
up with attempts to undermine the sanctity of
contracts through devious tactics.