Lecture notes
Commercial Law and Practice WS05 D2x
- Module
- Commercial Law and Practice
- Institution
- City University (City)
Commercial Law and Practice WS05 D2x
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LEGAL PRACTICE COURSECommercial Law and Practice
Workshop 5: Pre-Session Task
INSTRUCTIONS FOR ‘X’ ROLE
You are a trainee solicitor at Wilson and Buckley, Fetter Lane, London. Your firm has been
instructed by Karim Khan, Managing Director of Seramica Limited.
Seramica has recently developed a new range of high-tech floor tiles. The tiles are unique
in the market in that they absorb ambient heat very efficiently and release it slowly back into
the room in which they are used, so helping to conserve heat and reduce energy-use. Their
high cost has meant however that up until now, they have been sold only to exclusive design
consultants and interior decorators in London and the south-east.
Following a favourable mention recently in an article in a national newspaper about eco-
friendly home improvements, sales of these new tiles have doubled and Karim and his fellow
directors believe that there may now be a wider market for them than they had originally
thought.
Seramica has been approached by Standish & Co. who would like to act as their agent for
the sale of the new tile range in the south-west of England. Standish & Co. is the business
name for Giles Standish’s business which he runs with the help of his adult daughter. Karim
understands that Giles has contacts with a couple of small chains of upmarket DIY shops
located in the more affluent parts of south-west England and also with high-end interior
decorators operating in the south-west. Karim has spoken to Giles a couple of times on the
telephone and he seems ideal for Seramica’s purposes.
Karim and his fellow directors are thinking of doing a deal with Giles on the following terms:
1. Standish & Co is to have authority to find customers and make contracts on
Seramica’s behalf. Seramica will then be responsible for delivering the tiles direct to
the customers. Seramica will collect payment direct from the customers – they are
not keen to extend credit but are unsure of local market practice in the south-west.
2. Commission: 1%. They believe that the tiles should retail for about £100.00 each for
a square metre tile, with a smaller tile being cheaper. Seramica will set the prices.
3. Payment of commission: at the end of each 6 month period.
4. Expenses: if Standish & Co incur any travel or other expenses associated with setting
up contracts for the sale of the tiles, they feel Giles should absorb such expenses
within his commission. Karim and his fellow directors and shareholders in Seramica
have left in the business profits which they could otherwise have taken out, in order to
help grow the business, and so are quite adamant on this point.
5. Length of agency arrangement: Karim is thinking of about 18 months. He wants to try
it out for a short period to see how it goes both in terms of using Giles and also
breaking into the market in the south-west. To date Seramica has taken full control of
the sales of its tiles.
6. Termination: if orders drop below 300 square metre tiles per month, Seramica wants
to be able to end the arrangement with Giles.
7. Seramica wants to monitor progress of the arrangement closely so would like
Standish & Co. to produce sales reports, customer lists etc. every two weeks.
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