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The main business of Concrete Movers (Pty) Ltd (Concrete Movers) is described in its Memorandum of Association as to provide transportation services for the movement
The main business of Concrete Movers (Pty) Ltd ("Concrete Movers") is described in its Memorandum of Association as "to provide transportation services for the movement of concrete within the boundaries of Namibia and all services ancillary thereto". The memorandum of association of Concrete Movers further contains a condition to the effect that the approval of all the shareholders must be obtained for the transportation of concrete above 10 000 tons in one consignment. Mr. Rudolf Salomon approached Concrete Movers with a proposal to move 15 000 tons of concrete to be delivered on a certain date. The Managing Director of Concrete Movers, on its behalf, entered into a contract with Mr. Rudolf Salomon for the movement of 15 000 tons of concrete to be delivered on a certain date and in one consignment. Before the day of delivery as agreed, the Managing Director of Concrete Movers contacted Mr. Rudolf Salomon and informed him that the contract entered into between Concrete Movers and Mr. Rudolf Salomon is invalid as the approval of the shareholders was not obtained as required by the Memorandum of Association. Scenario 1 You are Mr. Rudolf Salomon's Legal Advisor. How would you advise him on the validity of the contract he entered into with Concrete Movers? Refer to relevant case law and provisions in the Companies Act 28 of 2004. Scenario 2 Assume Mr. Rudolf Salomon was aware that the approval of the shareholders was not obtained at the time when he entered into the contract with Concrete Movers. Would your advice be different? Motivate fully
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