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Michael Fox incorporates a Company called “Big Bats Co. Ltd.” In the Articles of Incorporation the Company objects clause says the Company is to make and sell cricket bats; cricket gloves and cricket balls all with the logo Chris’ Big Bats”. The Company entered into a contract with the Hanover Cricket Club to supply them with cricket gears. At some time during the period of this contract. Michael wanted to the company to also supply an energy drink as he thought it helped cricketers focus longer on the pitch. So the company contracted again with Hanover Cricket Club to sell an energy drink. As a minority shareholder John is concerned the Company won’t benefit from this new contract. Please answer the following questions:
John believes it’s wrong that Big Bats Co. Ltd sells energy drinks but he can’t explain why. Can you assist John and explain whether Big Bat Co. Ltd. can sell energy drinks? Support your explanation with an example of a case and the court’s ruling in the case. (3 marks)
Explain to John the rational of the Objects Clause and who it protects. (2 marks)
Michael comes to you and wants to know how his company can sell energy drinks. Discuss two ways his company can avoid the legal doctrine identified in question(a) above.
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