,MRL2601 Assignment 2 (COMPLETE ANSWERS)
Semester 2 2025 - DUE September 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
1. Authority of Bapela to Conclude the Contract
In terms of South African company law, a close corporation
(CC) is a separate legal entity from its members, governed by
the Close Corporations Act 69 of 1984 (although new CCs are
no longer registered since the Companies Act 71 of 2008 came
into force). However, existing CCs still operate under the older
Act.
While each member of a close corporation has the authority
to bind the CC in the ordinary course of its business, this
authority can be limited by an association agreement.
In this scenario:
The association agreement clearly states that no member
should contract services outside their specialities.
The core business of the CC is the renovation of
immovable property.
Bapela entered into a contract to sell cars, which is
outside the scope of the CC's business and in violation of
the internal agreement.
, Conclusion: Bapela did not have the authority to conclude the
contract with Tment Pty (Ltd) because it was outside the
business scope and contrary to the agreed association
agreement. Third parties contracting with a CC must ensure
the member is acting within their authority. If the third party
knew or reasonably ought to have known the member was
acting beyond their powers, the contract can be void or
unenforceable against the CC.
Relevant Case Law:
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549: Clarifies
actual and apparent authority. Even if Bapela did not
have actual authority, the CC might be bound if Tment Pty
(Ltd) reasonably believed Bapela had the authority
(apparent authority), unless otherwise stated in public
documents.
2. Corporate Social Responsibility (CSR)
CSR refers to the responsibility that companies have towards
society and the environment in which they operate. It means
that businesses must go beyond profit-making to consider the
impact of their operations on stakeholders, communities, and
the environment.
CSR Includes:
Semester 2 2025 - DUE September 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
1. Authority of Bapela to Conclude the Contract
In terms of South African company law, a close corporation
(CC) is a separate legal entity from its members, governed by
the Close Corporations Act 69 of 1984 (although new CCs are
no longer registered since the Companies Act 71 of 2008 came
into force). However, existing CCs still operate under the older
Act.
While each member of a close corporation has the authority
to bind the CC in the ordinary course of its business, this
authority can be limited by an association agreement.
In this scenario:
The association agreement clearly states that no member
should contract services outside their specialities.
The core business of the CC is the renovation of
immovable property.
Bapela entered into a contract to sell cars, which is
outside the scope of the CC's business and in violation of
the internal agreement.
, Conclusion: Bapela did not have the authority to conclude the
contract with Tment Pty (Ltd) because it was outside the
business scope and contrary to the agreed association
agreement. Third parties contracting with a CC must ensure
the member is acting within their authority. If the third party
knew or reasonably ought to have known the member was
acting beyond their powers, the contract can be void or
unenforceable against the CC.
Relevant Case Law:
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549: Clarifies
actual and apparent authority. Even if Bapela did not
have actual authority, the CC might be bound if Tment Pty
(Ltd) reasonably believed Bapela had the authority
(apparent authority), unless otherwise stated in public
documents.
2. Corporate Social Responsibility (CSR)
CSR refers to the responsibility that companies have towards
society and the environment in which they operate. It means
that businesses must go beyond profit-making to consider the
impact of their operations on stakeholders, communities, and
the environment.
CSR Includes:
