Mr. Jumbe who was vying for the national chairmanship of a political party, engaged Mr. Musika, a local musician to perform in a series of campaign meetings the political rallies were scheduled to be held at the Wazalendo Stadium. Mr. Jumbe paid Mr. Musika fifty thousand shillings as part payment for the performance fee.
Explain the legal position, if before the first rally can be held:
(i) The dais and seats at Wazalendo Stadium are burnt down and the rallies have to be cancelled. (4 marks)
(ii) Mr. Musika is found guilty of being in possession of narcotics and selling it to minors. He is arrested and sentenced to a one year jail term. (4 marks)
ANSWER
(i)
• This problem is based on a contract subsisting between the parties. Musika had agreed to perform and Jumbe to pay. A down payment had even been made.
• The cancellation of the rallies frustrated the contract and discharged both parties from their obligations. Jumbe is therefore entitled to the Kshs. 50,000 paid to Musika as none of the parties is to blame.
• He is not bound to pay the balance.
(ii)
In this case Musika is in breach of contract reason of self-disablement and Jumbe has an action against him in damages for the breach.
Related Posts
The shares of Promotion Limited, a private company are held members of three families, that is, the family of Mr. Karanja, Mr. Mutisya and Mr. Otieno. Mr. Karanja and Mr. Mutisya hold 90% of the company‟s shares. However, they feel that, the company is in need of further capital but due to the squabbles among the families, Mr. Otieno is not willing to inject additional funds so long as Mr. Karanja still holds any shares in the company. Further, Mr. Karanja and Mr. Mutisya have reasonable cause to believe and do in fact believe that the family of Mr. Otiengo is running their own business which is competing with that of Promotion Limited. It is known as a fact that Mr. Otieno is obtaining information as a member of Promotion Limited, which he is using to the benefit of his competing business. To resolve the problems, Mr. Karanja and Mr. Mutisya propose to alter the company‟s articles of association adding two new articles. The first article will enable the shareholders of 90% of the company‟s shares to compulsorily acquire the shares of the minority shareholder. The second one will require any shareholder who carries on competing business with company‟s business to transfer his shares to the nominee of the directors. Required: i) State the restrictions imposed both common law and statute law upon a company’s power to alter its articles of association ii) Discuss the validity of the proposed alteration
Happy co. Ltd was incorporated in January 2000 with an authorized share capital of 50,000,000 of one shilling per share which is fully issued and fully paid. The original articles of association gave the directors authority to issue the initial authorized share capital. The directors are proposing to purchase a plot from Mr Karan for KShs.3,000,000 and to finance the purchase a fresh issue of 2,000,000 shares at one shilling per share to Mr. Karan. In order to develop the plot they propose to raise further capital issuing a further 2,000,000 shares of one shilling each. The directors propose that 1,000,000 of the shares should be offered to existing shareholders and 1,000,000 to the general public. The shares to Mr Karan, the existing shareholders and to the general public are to be offered at one shilling and fifty cents each. Explain the preliminary checks which the directors must make before proceeding with these proposals. State the steps the directors must take to give them effect.