Question
Amy Schooler has a contract with ABC Limited in respect of Janitorial Services. The contract was signed on January 1 st 2020 and will be
Amy Schooler has a contract with ABC Limited in respect of Janitorial Services. The contract was signed on January 1st 2020 and will be effected on the 1st April 2020.
In mid-February 2020 ABC's sales plummeted due to the Covid 19 pandemic. In addition, an already high long term debt, and operating cost, as well as ABCs current negative cash flows situation placed the company in serious financial peril. Indeed if they cannot find a resolution soon to deal with their cash flow problems and debt, they will have to close operations permanently and send all employees home.
Upon hearing this pronouncement, the Trade Union representing workers at ABCl advised management that they will take strike action. This further affected the operations of ABC and resulted in a loss of production, sales and the much-needed cash flows, which is critical to pay off their debt and meet current fixed operating cost.On 3rd March 2016, ABC files for bankruptcy and sent all employees home.
On the 4th March, ABC wrote Amy Schooler advising of their circumstances and the virtual impossibility of implementing the sign contact for Janitorial Services, which is scheduled to commence on 1st April 2020.
Amy Schooler is adamant that they have binding arrangement and wanted to proceed as per signed contract. However ABC has advised Amy that certain events, covid 19, global recession anda subsequent strike has culminatedfor which the company has little or no control of. Thus, it was impossible to implement the contract on the agreed start date due to these circumstances.
Advise Amy Schooler on this matter.
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