Answer to Question #186193 in Law for Bornface Kandunda

Question

Funny Company (Pty) Limited appoints Nici as their Chief Executive Officer (CEO). A few years ago prior to her appointment, Nici was found guilty on charges of corruption and sentenced to pay a fine of N$ 50 000 or serve 5 years imprisonment. She paid the fine. Nici attends meetings of the board of directors but does not have voting rights. Nici enters into a lucrative deal with Nambia Limited (Nambia). Six months after the contract was signed, Nambia realises that this deal is not to their favour and wants to cancel the contract. 5.1 Can Nambia cancel the contract? (8 marks) 5.2 Would your answer to the previous question be different if Nici was a director of the company? (5 marks)

Answer 1

Nambia company has a right to cancel the contract with Nicci, but the company may have to pay some fee for the cancelation. The company should also negotiate with the individual and have a prior agreement that supports the termination.

B) The decision will remain the same even if Nicci was the director since this is termination by frustration.