Fran, Gill and Harry

Case study 1Instructions: Please response the stated below questions as complete as you can using assigned text books, relevant laws and other materials. 

Deadline to submit your paper is April 7, 2018before 8.30 am(before the class)in a hard copy version. After the deadline ,the papers will not be accepted! Please plan for print outs accordingly!

CASE STUDY(total 30 points)

FRAN, GILL AND HARRY

 In 2015 Fran, Gill and Harry formed a private limited company to pursue the business of computer software design. They each took 100 shares in the company and each of them be came a director in the new company. The articles of association of the company were drawn up to state that Fran, a qualified lawyer, was to act as the company’s solicitor for a period of five years, at a salary of £2,000 per year.

In2016, Fran entered into a contract on company’s behalf with Grace to produce plans for the redevelopment of some of company’s software designs. However, Gill and Harry have refused to pay Grace, claiming that Fran did not have the necessary authority to enter into the contract with him. What are the legal consequences (if any) of this contract for the company? 

In 2017Gill and Harry found out that Fran had been working with a rival software company and has passed on some secret research results to that rival. Please describe Fran’s responsibility and liability as a director. What Gill and Harry need to do to remove Fran from his position(if they legally can). 

The company for the year ended 31 December 2015showeda loss of £7,000 for the year, for the year ended 31 December 2016 a company showed a profit of £2,000for the year. For the year ended 31 December2017,the company made a profit of £13,000 and, due to a revaluation, the value of its land and buildings they purchased in 2015 when they started the company increased by £5,000in 2017.

Consequently, Fran, Gill and Harry would like to get payment of £10,000 in dividends. Please advise whether they can do it in 2017and what could be their maximum dividends in 2017in accordance with English law and Kazakhstan law.

Fran, Gill and Harry

1. What are the legal consequences (if any) of this contract for the company?

This company is a private limited company, where decisions like that cannot make a one of the directors without acceptance of other directors. Therefore, Fran exceeds her authority and concluded contract with Grace. In this case, Fran in role of agent of the company, Grace is the third part. Gill and Harry does not ratify this contract, then Fran liable to Grace for breach of warranty of authority, because she accepted and warranted she had authority, which she did not prossess.