,MRL2601 Assignment 2 (COMPLETE ANSWERS)
Semester 2 2025 - DUE September 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
1. Bapela’s Authority to Conclude the Contract
Bapela, Babra, and Maite are members of a close corporation
(CC), and they have agreed — via an association agreement —
that no member should contract outside their specialities.
Bapela nevertheless enters into a car sale contract with Tment
Pty (Ltd), which falls outside the CC’s scope (property
renovation).
Legal Position
In terms of the Close Corporations Act 69 of 1984,
particularly section 54(1), each member of a close
corporation has the authority to act as an agent of the
corporation and bind it in contracts with third parties.
However, if members restrict this authority among
themselves (as in the association agreement), the
restriction is internal and does not affect third parties
unless they are aware of the limitation.
Application to Bapela
, If Tment Pty (Ltd) knew or ought to have known that
Bapela was acting outside his authority, then the contract
may not bind the CC.
If Tment acted in good faith and had no reason to believe
Bapela lacked authority, then the CC may be bound,
despite the internal breach.
🔹 Case Law Reference:
Freeman & Lockyer v Buckhurst Park Properties (1964): A
company may be bound by the actions of an agent acting
with apparent authority, even if that authority was
limited internally.
Applied analogously in South African law to close
corporations.
Consequences for Bapela
Bapela may be personally liable to the CC for breach of
the association agreement.
The CC can discipline Bapela internally, but it may still be
legally bound to Tment depending on Tment’s
knowledge.
2. Principle of Corporate Social Responsibility (CSR)
Definition
Semester 2 2025 - DUE September 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
1. Bapela’s Authority to Conclude the Contract
Bapela, Babra, and Maite are members of a close corporation
(CC), and they have agreed — via an association agreement —
that no member should contract outside their specialities.
Bapela nevertheless enters into a car sale contract with Tment
Pty (Ltd), which falls outside the CC’s scope (property
renovation).
Legal Position
In terms of the Close Corporations Act 69 of 1984,
particularly section 54(1), each member of a close
corporation has the authority to act as an agent of the
corporation and bind it in contracts with third parties.
However, if members restrict this authority among
themselves (as in the association agreement), the
restriction is internal and does not affect third parties
unless they are aware of the limitation.
Application to Bapela
, If Tment Pty (Ltd) knew or ought to have known that
Bapela was acting outside his authority, then the contract
may not bind the CC.
If Tment acted in good faith and had no reason to believe
Bapela lacked authority, then the CC may be bound,
despite the internal breach.
🔹 Case Law Reference:
Freeman & Lockyer v Buckhurst Park Properties (1964): A
company may be bound by the actions of an agent acting
with apparent authority, even if that authority was
limited internally.
Applied analogously in South African law to close
corporations.
Consequences for Bapela
Bapela may be personally liable to the CC for breach of
the association agreement.
The CC can discipline Bapela internally, but it may still be
legally bound to Tment depending on Tment’s
knowledge.
2. Principle of Corporate Social Responsibility (CSR)
Definition
