Reference no: EM132416354 , Length: word count:2750

International Commercial Law Assignment Question -

In March last year Jimmy was appointed managing director of Equestrian R Us Ltd, a small company. Jimmy owns 5% of Equestrian R Us's shares, the other 95% are owned equally by Sinead and her husband Samson, who are the only other directors. Equestrian R Us trades in handcrafted leather saddles and riding accessories. Sinead and Samson design and make these goods but they want to leave the marketing to Jimmy, who has recently retired from his position as manager of a car-hire firm. Equestrian R Us's articles of association say that the managing director of the company should receive a salary, the amount of which should be determined by the board of directors.

In the summer months, Jimmy's main duties consist of selling the finished goods. Much of the selling is done at large Horse Shows, such as the Badminton Show. Equestrian R Us's board of directors (in effect Sinead and Samson who always act in concert) agreed to pay Jimmy 25% commission, over and above any salary, on all goods which Jimmy sells. As well as Equestrian R Us's normal stock, Jimmy is supplied with a new prototype saddle, incorporating a revolutionary design. (Equestrian R Us is the process of applying for a patent for the innovative step taken.) Jimmy is instructed to show this saddle to customers, but on no account to sell it.

Jimmy books a stand at all the major Horse Shows and employs Jason to man the stalls. Jason is Jimmy's bridge partner and although an expert card player, sometimes rather lacks common sense. The instructions not to sell the prototype saddle are passed on to Jason. In the evenings Jimmy and Jason usually find a game of bridge.

The first Horse Show goes reasonably well and Jason manages to sell a good number of Equestrian R Us's leather goods. At the second show Jimmy arrives to find that Jason has sold the prototype saddle to Jackie Jumpswell, a famous show jumper. Jimmy finds Jackie Jumpswell and explains that Jason had no authority to sell the saddle. Jackie, a rather bluff Yorkshire man, replies that this is bad luck because he has bought the saddle and he is definitely not giving it back.

Jimmy berates Jason and brings up the fact that he knows Jason has been sleeping in the back of Equestrian R Us's van while claiming expenses for accommodation. After an argument, Jimmy tells Jason that he is fired and that he will not be receiving any of the 15% commission on goods sold, which he earlier promised. Jason responds by driving off in Equestrian R Us's van, telling Jimmy he will not return the van or the unsold stock until he has been paid his wages in full.

Jimmy tells the news of what has happened to Sinead and Samson. They had no idea that Jimmy was employing Jason. They tell Jimmy that he is dismissed and that they are not going to pay him any commission on goods sold, or any salary at all. Furthermore, they say that they intend to sue Jimmy in respect of the lost van, the lost stock and the loss of the prototype saddle. Jimmy says that the money taken will compensate him for loss of salary and commission.

Advise Equestrian R Us, Jimmy and Jason on their legal positions.