Michael Fox incorporates a Company called “Big Bats Co. Ltd.” In the Articles of
ID: 433855 • Letter: M
Question
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 (2 marks)
Explanation / Answer
Answer:
John believes it’s wrong that Big Bats Co. Ltd sells energy drinks but he can’t explain why.
We can assist John and explains as below that Big Bat Co. Ltd. cannot sell energy drinks without legal permission and validation of the energy drink product to be complies with the legal norms.
The energy drink products needs to pass the Dop-test to ensure that crickers passes the Dop- test being used to ensure that the players are not having asteroids which impacts the games rules and this is being banned in the sports.
All the players are needed to pass through the Dop-test and they need to be found negative in the Dop-test. A player being found positive in Dop-test will not be allowed to participate in the sports and will be banned to participate in the tournaments.
So the Big Bats Co. Ltd cannot sell the energy drink to the players unless it is sure that it does not contains any asteroids and it will not let the players to fail in the Dop-test.
The energy drinks which are complies legal requirements and does not contain asteroids can be used by the players.
Example – Shan Warne – Well known Australian cricker, was banned from the Cricket World Cup due to fail in the Dop-test and found with asteroids.
Rationale of the Clause: The rationale is that the players should not be found with external asteroids or energy supplied drinks which are legally not allowed by the sports committee, to ensure that players are playing the sports with natural power and not being energized with artificial means.
Michael comes to us and wants to know how his company can sell energy drinks: Michael can sell the energy drink provided it meets the legal requirements and does not contain any asteroids which can impacts the players and limits the players to pass the Dop-test.
Two ways the company can avoid the legal doctrine identified in question are as below
The laboratory test of the energy drinks that ensures that it meets the legal requirements.
The contents of the energy drink and its process meets the legal requirements.
Players can pass through the Dop-test and assures that the players having the energy drink will not fail the Dop-test.