Question
The Memorandum of Incorporation of CH Adventures (Pvt) Ltd ('the Company') provides that the Company is incorporated for purposes of the achievement of the objects
The Memorandum of Incorporation of CH Adventures (Pvt) Ltd ('the Company') provides that the Company is incorporated for purposes of the achievement of the objects as set out in clause 4. Clause 4 contains the following provisions:
4. OBJECTS OF THE COMPANY
4.1. The principal objective of the Company is to operate the business of arranging and conducting luxury camping and hiking trips for international and local visitors to remote and mountainous areas in Zimbabwe. 4.2. The ancillary objectives of the Company are to purchase and provide camping and hiking equipment that is necessary for arranging and conducting hiking and trekking excursions. John, the managing director of CH Adventures (Pty) Ltd, is authorised by the board of directors to purchase all equipment on behalf of the Company in line with what was stated in the memorandum of association. John attends a ten days' exhibition of boating and aquatic sports equipment at Aqua Equipment Ltd, a supplier of high-quality diving and snorkeling equipment, and ski- boats. Aqua Equipment Ltd has a limited offer on ski-boats, which it is selling at the exhibition. John decides to purchase five ski-boats for CH Adventures (Pvt) Ltd from Aqua Equipment Ltd as he is of the opinion that the Company should extend its future operations to include water sports, diving and snorkelling. Lindiwe, a shareholder of CH Adventures (Pty) Ltd, who also attends the exhibition, becomes aware of the fact that John is purchasing the ski-boats for the Company. Vusi, a trade union representative of most of the employees in CH Adventures (Pvt) Ltd, also becomes aware that John is purchasing the ski-boats for the Company. With reference to appropriate sources and the relevant legal principles: a) Discuss whether a contract concluded by John and Aqua Equipment Ltd for the purchase of ski-boats would be binding and enforceable against CH Adventures (Pty) Ltd. This must also be viewed against the fact that the board is also arguing that it never authorised that specific purchase. b) Advise Lindiwe whether she has any remedies in the event that she objects to the purchase of the ski-boats from Aqua Equipment Ltd. c) Explain whether Vusi can prevent the purchase of the ski-boats from Aqua Equipment Ltd.
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