Question 4 (Marks: 40)

Mac G is the owner of Podcast and Chill, one of South Africa's biggest YouTube Channels. Mac G receives a call at his home in Durban on 6 May 2021 from Lawrence, the managing director of BET Africa division. The call is recorded. Lawrence, who is based in Johannesburg, tells Mac G that BET Africa has been closely following the YouTube channel and that the company wants to purchase 35% of the shares of Podcast and Chill for R17 million. Because the channel already has over a million subscribers and makes turn over a considerable monthly revenue, Mac G indicates that he will accept nothing less than R70 million for 35% shares, non-negotiable.

Lawrence agrees to the price of R70 million for the shares and asks Mac G to meet him the following week at his attorney's office in Sandton to formalise the agreement and reduce it to writing. They meet the following week on 13th May 2021 at the office of their attorneys, and sign the written document in which they agree on the following terms:

A. The parties agree to the purchase price of R70 million to be paid in exchange for 35% of the shares in Podcast and Chill. B. BET Africa is granted the right of first refusal should Podcast and Chill wish to sell more of their shares in the future, subject to the condition that they meet or exceed any other existing offers.

Three months later, Mac G appears live on air in a staged conversation between him and the CEO of SABC, in which the SABC offers them R25 million per 5% of the shares. BET Africa is informed about the offer, and the company immediately rushes to buy 15% of the shares at R25 million per 5%.

Q.4.1 Identify every contract that appears in the above scenario and indicate the legal validity of each. (6)

Q.4.2 With regards to the initial telephone conversation between Mac G and Lawrence, identify the offeror and the offeree in that conversation which resulted in existence of the contract. (4)

Q.4.3 Explain when consensus was reached between the parties with regards to the purchase of the initial 35% of the shares and identify the date and place that the contract legally came into existence between Mac G and BET Africa. (10)

Q.4.4 Using your own words as far as possible (paraphrasing) explain the legal implication of clause B. MARK ALLOCATION: Five marks in respect of the correct legal theory' Five marks in respect of the academic skill of providing a concise, articulate and well-paraphrased answer. (10)

Q.4.5 Analyse whether there was a legally valid transfer of the subsequent 15% of shares that BET Africa rushed to acquire. (10)