The memorandum of association of Continental (Pty) Ltd states that the main object of the company is to construct buildings in Gauteng. Article 5 of the company’s articles authorises the managing director to enter into all contracts on behalf of the company. Article 6 provides that any contract involving an amount in excess of R400,000 requires the prior consent of the shareholders in a general meeting. The managing director buys a truck in the name of the company at a price of R600,000, without the prior consent of the shareholders in a general meeting as required by Article 6. The seller of the truck admits that she has never read the articles of association of the company.Required:Discuss whether the contract is binding on the company. (10 marks)
