Question 1

Explain TWO statutory and TWO judicial circumstances in which the general legal principle laid down in the case of Salomon v Salomon & Company has been ignored. (20 Marks)

Question 2

Wallace is employed as CEO of Flim Flam Limited whose main object is to retail office furniture. His contract of employment contains a clause which states that in the event of his leaving the employment of Flim Flam Limited he will not take any of the companys customers for a period of two years. He resigns his employment and together with his wife Jacinth forms a new company, WalJac Office Supplies & More Independent Limited (WOSMIL), whose main object is also to sell office furniture. Mr. Bagawire is a salesman employed by WOSMIL. He is given a customer list by Wallace and immediately begins calling Flim Flam Limiteds customers to come and do business with WOSMIL. Wallace also needed to raise some cash for their operations. In order to raise this cash, he enters into a contract to sell his house to Wanda for Twenty Million Dollars. Bessy, who has always admired the house approaches Wallace and makes him an offer of Thirty Million Dollars for the house. Wallace transfers ownership of the house to WOSMIL, and on behalf of the company enters into negotiations to sell the house to Bessy. With the use of appropriate case law and in the legal format, advise Flim Flam Limited and Wanda on any action they can take. (30 marks)