Question
Write the following information with examples of the law of contract and the correct articles of the relevant law so that those articles can be
Write the following information with examples of the law of contract and the correct articles of the relevant law so that those articles can be used as a reference
a) Payment of Audit Fees by SAKA As SAKA is bankrupt, Hesabu Consultants are likely to be considered unsecured creditors. They may have to register their claim in the bankruptcy proceedings and will be paid according to the priority rules in bankruptcy law, which often favor secured creditors. b) Remuneration for Directors of MOTA Ltd and KUPWA Under the Law of Contract Act, partners in a business have the right to participate in management. Unless a partnership agreement specifies otherwise, the directors of MOTA Ltd and KUPWA should not unilaterally receive remuneration from the partnership business without the consent of all partners. c) Legal Status of Employment Contracts with KUPWA If KUPWA was in the process of being wound up, any contracts made during this period might be voidable or void, depending on the specifics of the winding-up process and any court orders in place. d) Legality of MOTA Ltd Refusing to Work with Kali and Tuwe This depends on the terms of the employment contract and the corporate governance rules of MOTA Ltd. Generally, a company has discretion over its management choices unless these choices violate contractual or legal obligations. e) Legal Remedy for SAKA Against MOTA Ltd SAKA likely has no legal remedy if there was no formal agreement or legal basis obligating MOTA Ltd to assume his liabilities. f) Contractual Remedies for Iguguno District Council They may seek damages for breach of contract, specifically for non-performance, if the contract with Mr. SAKA was legally binding. g) Rights of Creditors Post-Winding Up of KUPWA Typically, creditors cannot pursue shareholders personally for company debts unless there is evidence of wrongful or fraudulent trading or if corporate veils are pierced due to misconduct.
Explanation: Expanding on the answers above:
a) Audit Fees by SAKA - In bankruptcy, creditors are classified and prioritized. Hesabu Consultants, as unsecured creditors, are typically lower in priority. They need to file a claim in the bankruptcy proceedings but might recover less than their owed amount, depending on SAKA's asset liquidation.
b) Directors' Remuneration - Partnerships typically operate on mutual agreement. Unless specified in a partnership agreement, directors of MOTA Ltd and KUPWA receiving remuneration without all partners' consent could be challenged as it may contravene the principles of equal management rights in partnerships.
c) Contracts with KUPWA - If KUPWA was insolvent and under court-ordered liquidation, contracts made during this period could be considered void, especially if they were not in the interest of all creditors or made after the liquidation process began.
d) MOTA Ltd's Refusal to Work with Kali and Tuwe - Companies generally have the right to choose their directors and employees. MOTA Ltd's refusal is legal if it doesn't breach any existing contract terms or statutory obligations.
e) Remedy for SAKA Against MOTA Ltd - Without a formal agreement obligating MOTA Ltd to assume SAKA's business liabilities, SAKA likely has no legal recourse. Business debts are separate from personal debts in the absence of a guarantee or similar agreement.
f) Remedies for Iguguno District Council - They can seek compensation for losses resulting from SAKA's breach of contract. This typically involves suing for damages - the financial losses suffered due to the breach.
g) Creditors' Rights Post-Winding Up of KUPWA - Creditors' rights against shareholders are limited, as shareholders' liability is typically limited to their investment in the company. Creditors can only claim against shareholders if there's evidence of wrongful acts like fraudulent trading that justifies piercing the corporate veil.
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