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LML4806 Assignment 1 (COMPLETE ANSWERS) Semester 2 2024 (818236) - DUE 25 August 2024
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LML4806 Assignment 1(COMPLETE ANSWERS)
Semester 2 2024 (818236) -
DUE 25 August 2024
CONTACT: biwottcornelius@gmail.com
, NST2602 Assignment 3 (COMPLETE ANSWERS) 2024
(213894) - DUE 16 July 2024
Question: 1 Jane, John and Jabulani are the directors of Touring Africa by
Bicycle (Pty) Ltd (“the company”), a company that is based in Johannesburg.
The memorandum of incorporation of the company provides that only the
board of directors have the authority to enter into contracts on behalf of the
company. James, the branch manager of the company in Durban, attends an
outdoor show in Durban to scout for useful new products for the company’s
cycling excursions. At the outdoor show one of the exhibitors, Cycle for Life
(Pty) Ltd, has a limited special offer on electric bicycles for the amount of
R120 000.00 per bicycle. James contacts the directors of the company by way
of a Zoom call, and while speaking to the directors of the company on the
Zoom call, James keeps his mobile phone on speakerphone. The directors
instruct James to purchase six of the electric bicycles on behalf of the
company. Nancy, the representative of Cycle for Life (Pty) Ltd, hears the
instruction, and because James has previously entered into agreements with
Cycle for Life (Pty) Ltd without any problems, she enters into an agreement
with James for the sale of six electric 4 bicycles to Touring Africa by Bicycle
(Pty) Ltd. The electric bicycles are delivered to the company’s Durban office.
When Cycle for Life (Pty) Ltd sends an invoice for payment of the total amount
of R720 000.00 for the six electric bicycles, Touring Africa by Bicycle (Pty) Ltd
refuses to pay, arguing that it is not bound by the contract as James did not
have the authority to act on its behalf. Nancy approaches you for legal advice.
With reference to the relevant authority/principle and the facts, advise Nancy
on what Cycle for Life (Pty) Ltd must allege and prove in order to prevent
Touring Africa by Bicycle (Pty) Ltd from arguing that it is not bound by the
contract concluded by Nancy and James. (5)
To advise Nancy from Cycle for Life (Pty) Ltd on how to prevent Touring Africa by Bicycle
(Pty) Ltd from claiming that it is not bound by the contract, we need to consider the principles of
agency, authority, and estoppel. Here are the key points that must be alleged and proven:
1. Actual Authority: Nancy should establish that James had actual authority to enter into
the contract. Although the company's memorandum of incorporation states that only the
board of directors has the authority to enter contracts, the directors explicitly instructed
James to purchase the bicycles during the Zoom call. This can be considered as granting
him authority for this specific transaction.
2. Apparent Authority: If James's authority was not clear, Nancy could argue that James
had apparent authority. If Cycle for Life had previously dealt with James and he had
successfully entered into contracts on behalf of the company in the past, this creates a
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