Question 1 Kruger is Heavy Machinery Sales Manager of JCI Ltd. He has frequently

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Kruger is Heavy Machinery Sales Manager of JCI Ltd. He has frequently negotiated and signed contracts on behalf of JCI Ltd with Oppenheimer, Managing Director of Anglo-American Corporation Ltd. Kruger and Oppenheimer have been in negotiations over the supply of an ore smelter by JCI to Anglo-American. On Friday 5 July at 10.00 am Kruger phones Oppenheimer and says “We will offer to sell you the ore smelter for $ 3.5 million. I’ll be at your office at 3pm to sign a contract.”

At 1 pm, Oppenheimer is having lunch at the Rand Club with Rhodes, who is another executive of JCI. During the lunch Rhodes says “Things are awful at JCI. Kruger has been making too many mistakes this year, his department hasn’t been trading profitably, and I heard he was going to get a nasty surprise at our lunchtime Board meeting. Frankly, I can’t see him surviving”. Oppenheimer goes back to his office and mentions the lunchtime conversation to Jameson, a fellow Anglo-American executive, saying that he (Oppenheimer) thinks that Kruger may have been ousted. Jameson says "Look, we're getting a good deal here, don't worry about what is going on at JCI". At 3pm Kruger arrives and signs the deal to sell the machinery to Anglo American for $ 3.5 million.

However on Monday the Financial News carries an article headed “JCI Heavy Machinery Sales Manager Fired at Board Meeting Last Friday”. Anglo American has tendered a cheque to JCI for $ 3.5 million, and has demanded delivery of the smelter, but JCI refuses to deliver it, saying that Kruger had no authority to sell the smelter because he had been fired at 1.30pm. Advise JCI as to their legal position, citing statutory and case law authority.

Explanation / Answer

Here as JCI has already terminated the sale manager at 1.30 PM , before signing the contract with Anglo-American Corporation Ltd.The same has been communicated to Mr Oppenheimer , by Mr Rhodes during lunch before signing the contract . This is case of complete ignorance and have motive of fraud or undue benefit . Although the public notice has been displayed or published on monday news paper, next day , as saturday and sunday being a non-working days.

The JCI is free to reject the perform of any contract signed b Mr kruger, after termination.

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