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LML4806 Assignment 1 Semester 2 2024 (818236) - DUE 25 August 2024
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LML4806 Assignment 1 Semester 2 2024 (818236) - DUE 25 August 2024 QUESTIONS WITH DETAILED ANSWERS
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LML4806 Assignment 1Semester 2 2024 (818236) -
DUE 25 August 2024
QUESTIONS AND ANSWERS
[DATE]
[COMPANY NAME]
[Company address]
, LML4806 Assignment 1 Semester 2 2024 (818236) - DUE
25 August 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 on how Cycle for Life (Pty) Ltd can prevent Touring Africa by
Bicycle (Pty) Ltd from arguing that it is not bound by the contract concluded by
Nancy and James, we need to consider the principles of agency law and the
concept of ostensible (or apparent) authority.
Relevant Authority/Principle:
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