Read the case study below and answer the questions that follow. The law of contract acts as a golden thread throughout all elements concerned with daily business transactions. Agreements are constantly being entered into for various purposes. A contract is binding in law and each party must deliver and perform according to their obligations as mutually agreed upon in the contract. Hydroshiny Inc is owned by siblings Leon and Kate. The business is based in Durban. Leon manages the company's financial elements, and his sister Kate manages the procurement aspects. The business currently employs one (1) hairdresser. The business also offers a mobile hair and nail salon. Kate wishes to improve the profit margin, as it has been extremely difficult for the business post-COVID-19. Kate has researched and heard about a new innovative hair styling tool with multiple functions. Kate is certain that this will attract new customers to their salon. She pitches the idea to Leon and they both agree to source the hair styling tool and sell it to their customers.

Question 4 (25 Marks) Hydroshinys investment in the new hairstyling tool has been creating quite a bit of hype. People are placing their online orders for the item. Leon decides to purchase a motor vehicle to assist with the business deliveries. Leon contacts an insurance company, as he is required to ensure that the vehicle is insured before he is allowed to take delivery from the dealership. The insurance broker asks Leon as to who will be the designated driver. Leon states that he will be the only individual driving the vehicle, although Leon knows that he will be employing his nephew, 18-year-old Jim as a driver. Jim has very little driving experience and has recently obtained his license. Leon also states that the vehicle will be used for personal use only, in order to receive a low monthly premium. The insurance company consequently classifies him as a low risk driver, as he has had his drivers license for 27 years. Whilst undertaking deliveries Jim collides with another vehicle. Both vehicles are extensively damaged. 4.1 Based on Leons actions above you are required to fully discuss the insureds duty of disclosure. (10 Marks) 4.2 Based on the set of facts above has Leon acted in an ethical manner? Provide a detailed explanation. (5 Marks) 4.3 You are appointed to assess the facts of the matter and propose a recommendation to the insurance company. Based on the facts presented above fully discuss whether the insurance company ought to honour the agreement to indemnify Leon against the damage. (10 Marks)