Question: Lesedi and Simphiwe registered Furnmax ( Pty ) Ltd , a company that sells office equipment. The Memorandum of Incorporation of Furnmax ( Pty )
Lesedi and Simphiwe registered Furnmax Pty Ltd a company that sells office equipment. The Memorandum of Incorporation of Furnmax Pty Ltd indicates that the board of directors, consisting of Lesedi, Simphiwe, Carol and Precious, can appoint a managing director who would be authorised to contract on the companys behalf. However, the board has never formally appointed a managing director. Nevertheless, Lesedi, with the full knowledge of the other directors, has contracted with Office Supplies Ltd for the supply of office equipment to Furnmax Pty Ltd on two occasions. On the third occasion that Lesedi contracted with Office Supplies Ltd Furnmax Pty Ltd denied liability for the payment for the equipment based on the fact that Lesedi was never appointed as the managing director. Upon being sued by
Office Supplies Ltd Furnmax Pty Ltd opposed the claim for payment in terms of the agreement based on the fact that Lesedi was not authorised to contract on the companys behalf.
Explain with reference to relevant case law and section in the legislation what Office Supplies Ltd would have to prove in order to rely upon the doctrine of estoppel.
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