Remedies for breach of duty
The law provides for a range of remedies in the event of a breach by the directors of their duties
The remedies may be as follows:
(a) Injunction. An injunction is an equitable remedy in the form of a court order. The order requires a party to do, or to refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties. The offender may have to pay damages or face a merit arrest and possible prison sentences.
(b) Declaration. A declaration ordinarily refers to a judgment of the court or an award of an arbitration tribunal which is a binding adjudication of the rights or other legal relations of the parties which does not provide for or order enforcement.
Where the declaration is made by a court, it is usually referred to as a “declaratory judgement”.
(d) Damages or compensation in law. Damages is an award of money to be paid to a person as compensation for loss or injury or restoration of the company’s property.
(e) Rescission. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were in before they entered into a contract (the status quo ante).
(f ) Account of profits. Account of profits is an equitable remedy. It is used in cases of breach of fiduciary duty. It is an action taken against a defendant to recover the profits taken as a result of the breach of duty so as to prevent unjust enrichment.
(g) Summary dismissal. Termination of employment is the end of an employee’s duration with an employer. The decision may be made by the employee, the employer, or mutually agreed upon by both.