FINAL ONLINE SUMMATIVE ASSESSMENT
Bachelor of Commerce in Accounting
Bachelor of Commerce in International Business
Bachelor of Commerce in Entrepreneurship
PROGRAMME
Bachelor of Commerce in Marketing Management
Bachelor of Commerce in Retail Management
Bachelor of Commerce in Project Management
Bachelor of Commerce in Financial Management
Bachelor of Commerce in Supply Chain Management
MODULE
Business Law
YEAR
Two (2)
INTAKE
July 2022 Semester 1
DATE
30 November 2022
TOTAL MARKS
100
SECTION A
[100 MARKS]
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 financial elements of the company 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 COVID19. Kate has conducted research and has heard about a new innovative hair styling tool, which has
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 1
Jennifer, Manaledi, JM,Edwina, Athi
(25 Marks)
Kate contacts Hair For Days, a company which supplies the new hair styling tool. The two parties agree
to contract with each other. Hair For days will supply Hydroshiny Inc with 50 units at a cost of R500.00
each. This will be an ongoing relationship for a period of 1 year.
Kate wishes to ensure that the contract between both parties is legally correct and binding in law. She
has heard that there are special clauses, which can be found in a contract.
You are required to advise Kate on FIVE (5) special clauses which are found in a contract.
You are required to fully outline the clauses and thereafter demonstrate an application of the law by
providing a practical example for each clause. (You may relate your practical examples to the above set
of facts).
Question 2
V Pieterse, Aretha, Mohammed, Nompilo
(25 Marks)
Kate regularly purchases items for the salon from online sites. She sees an advert for a sound system,
which she believes would be a great addition to the salon. She contacts the seller and requests to view
the item. The seller agrees, and tells Kate that the sound system is sold “as is”. Kate purchases the sound
system for R2 500.00. She then takes the sound system back to the salon. She attempts to connect her
USB in the designated port, however she notices that there is rust around the port. She emails the seller
and he blatantly responds on email that it is ‘not his problem anymore’, and that the USB port has not
been working for many years. The sound system cannot operate without a USB.
Kate wishes to understand her remedies in law for the sale of defective items.
2.1 You are required to fully discuss the TWO (2) remedies respectively, which specifically relate to latent
defects.
(20 Marks)
2.2 Determine which remedy would be best suited to Kate’s legal problem, and provide reasoning based
on the facts above as to why this would be most applicable to Kate.
(5 Marks)
Question 3
Faith, Andile, Tsakani, Mxolisi, Seemo
(25 Marks)
Leon has recently convened with Kate to discuss the financials of the company as the business has been
struggling post COVID-19. Leon has stated that there is no longer a need to employ the hairdresser at
Hydroshiny Inc because they have introduced innovative styling tools, which in essence does the same
task as the hairdresser employed at the salon. Leon wishes to understand the various ways in which an
employment contract can be terminated.
3.1 You are required to list TEN (10) ways in which an employment contract may terminate. You must
thereafter provide a full discussion for each point which you have listed.
(20 Marks)
3.2 Is Leon legally allowed to terminate the contract of the hairdresser employed at Hydroshiny Inc based
on the above set of facts? Apply the relevant principles, which you have discussed above, and provide a
detailed explanation.
(5 Marks)
Question 4
(25 Marks)
Pontsho, Sello, Siya, Pretty, Samkelisiwe
Hydroshiny’s 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 driver’s license for 27 years. Whilst
undertaking deliveries Jim collides with another vehicle. Both vehicles are extensively damaged.
4.1 Based on Leon’s actions above you are required to fully discuss the insured’s 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)
END OF PAPER