Thabiso and Musa are entrepreneurship students from WellRead College. During their study in the College, they identify that a lot of paper goes to waste due to lack of recycling facilities. For this reason, they decide that when they graduate in November 2019, they will form PaperWise (Pty)Ltd, a company that will recycle paper for supply to corporate companies and schools.
They engage Nkosi, a law student at the University of Botswana to assist them with the promotion of the company. As part of his duties,Nkosi approaches the university of Botswana to negotiate a supply of used paper to the unincorporated company. The University offers Nkosi the used paper at a discounted price due to its commitment to environmental issues. Nkosi fails to inform Thabiso and Musa of the offer the University has made him.
Upon incorporation of PaperWise (Pty)Ltd ,Thabiso and Musa find out about the discounted price the University of Botswana had offered. They are aggrieved By Nkosi’s conduct. They also want to cancel the contract he made with the University. The University on the other hand holds that PaperWise(Pty)Ltd has a legal obligation to perform under the contract it entered into with the company
Advise PaperWise(Pty)Ltd and University of Botswana
The contacts is valid when the parties agreeing to contract are competent parties.
The competencies are
- Capacity to Contract : Legal capacity to contract
- Unconscionability i.e. disparity in authority makes contract invalid
- Contract violating public policy and illegality
- Contract may not be enforceable when party proves there is some mistake however it has to be concrete mistakes
- Agreements subject to coercion, duress, misrepresentation, improper persuasion, or threats is invalid.
A misrepresentation is a statement or representation something that is not in line with the facts. There are three type of misrepresentation viz Fraudulent Misrepresentation, Negligent Misrepresentation & Material Misrepresentation
A fraudulent misrepresentation is where someone misstates a fact and either knows or believes that what he is saying is not true.
Negligent Misrepresentation is where someone misstates a fact however he is not sure whether or not his statement is true but shows it as true anyway.
Material Misrepresentation is the case where false statement that is likely to induce a reasonable person to assent
In the present case neither University of Botswana nor Advise Paper Wise (Pty Ltd) have carried out misrepresentation. +
In general, parties that propose contracts are not required to disclose facts regarding the subject matter of the contract i.e. University of Botswana is prepared to have lower price for environment cause. Also it is not the case where University of Botswana influenced Musa to misrepresent.
Hence the contract is enforceable in the eyes of law.
Thabiso and Musa are entrepreneurship students from WellRead College. During their study in the College, they...
Thabiso and Musa are entrepreneurship students from WellRead College. During their study in the College, they identify that a lot of paper goes to waste due to lack of recycling facilities. For this reason, they decide that when they graduate in November 2019, they will form PaperWise (Pty)Ltd, a company that will recycle paper for supply to corporate companies and schools. They engage Nkosi, a law student at the University of Botswana to assist them with the promotion of the...