The Memorandum of Incorporation of Generators Unlimited (Pty) Ltd provides that only the board of directors, or any director authorised by the board, has the power to conclude contracts on behalf of the company. It also states that any transaction that exceeds R10 million must first be authorised by the company's shareholders at a general meeting by way of an ordinary resolution. One of the directors, Nthabiseng, is authorised by the board of directors to conclude contracts on behalf of the company. Nthabiseng enters into a contract with Matthews for the purchase of power distribution transformers to the value of R15 million, without first obtaining the authorisation for the purchase by the company's shareholders at a general meeting. Matthews is aware of the provision in the Memorandum of Incorporation requiring shareholder approval because he has dealt with the company on previous occasions. However, he does not know that the purchase in fact, has not been authorised by an ordinary resolution of the company's shareholders.

With reference to appropriate authority, discuss whether Generators Unlimited (Pty) Ltd is bound by the contract concluded by Nthabiseng and Matthews. (10)

1.2 Pristine Properties Ltd focuses on the acquisition, development and letting of industrial, retail and residential properties throughout South Africa. A competitor, ACS Real Estate Ltd, has embarked on a disposal of its non-core portfolio of properties in South Africa in order to focus on its overseas business. Mark, a director of Pristine Properties Ltd, is authorised by the board of directors to represent Pristine Properties Ltd in negotiations for the acquisition of certain industrial and retail buildings in Johannesburg from ACS Real Estate Ltd. During one of the meetings between Mark and Thandi, a representative of ACS Real Estate Ltd, Thandi informs Mark that ACS Real Estate Ltd is under pressure to sell the adjacent residential buildings at a discounted price as she believes that Pristine Properties Ltd would also be interested in buying these residential buildings. Mark secretly incorporates a company that purchases the residential buildings from ACS Real Estate Ltd and subsequently divides them into sectional titles owned by himself, his children and his business associates.

With reference to the relevant statutory provisions and case law, discuss whether Mark has breached any of his fiduciary duties to Pristine Properties Ltd. (10)

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For the first scenario concerning Generators Unlimited Pty Ltd In analyzing whether Generators Unlimited Pty Ltd is bound by the contract concluded by Nthabiseng and Matthews we need to consider the l... View the full answer