Question
Bouwer Inc specialises in providing project and construction management services. The company's registered office is situated in Pretoria, in the Gauteng Province. Riaan, Charles, Aubrey
Bouwer Inc specialises in providing project and construction management services. The
company's registered office is situated in Pretoria, in the Gauteng Province. Riaan, Charles,
Aubrey and William are the directors of Bouwer Inc. To ensure that the company does not
deviate from its core business of providing project and construction management services, the
following clauses were inserted into the Memorandum of Incorporation:
"Capacity
The company may not participate in any trades or transactions other than for
purposes of the provision of project and construction management services.
The company may not enter any transaction for the purchase or sale of any
immovable property outside the borders of the Gauteng Province.
Bouwer Inc has a substantial amount of cash in its bank account which does not yield much
interest as a result of the low interest rate that Bouwer Inc's bank offers. While on holiday in
Port Elizabeth, in the Eastern Cape Province, William spotted a beach house for sale and
thought it would be a great investment for Bouwer Inc. Without the knowledge of the
shareholders and directors, William immediately arranged an appointment with the owner of
the beach house, Mr Pietersen, and concluded a contract for the purchase and sale of the
beach house at a price of R800 000 on behalf of Bouwer Inc. When William arrives back at
the office and informs the other directors about the transaction they are not impressed. Advise
the board of directors of Bouwer Inc whether the company can escape liability for performance
in terms of the contract on the ground that the transaction falls beyond the capacity of thecompany
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started