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LST5CCL - Company and Commercial Law Assignment

11 Pages3614 Words104 Views
   

La Trobe University

   

Company and Commercial Law (LST5CCL)

   

Added on  2021-09-17

LST5CCL - Company and Commercial Law Assignment

   

La Trobe University

   

Company and Commercial Law (LST5CCL)

   Added on 2021-09-17

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1
Contents
Solution 1....................................................................................................................................................2
Issue 1(a).....................................................................................................................................................2
Relevant Law...........................................................................................................................................2
Application of Law..................................................................................................................................3
Conclusion...............................................................................................................................................4
Issue 1(b).....................................................................................................................................................5
Solution 2....................................................................................................................................................5
Issue 2(a).....................................................................................................................................................5
Relevant Law...........................................................................................................................................5
Application of Law..................................................................................................................................7
Conclusion...............................................................................................................................................8
Issue 2(b).....................................................................................................................................................8
Reference List...........................................................................................................................................10
LST5CCL - Company and Commercial Law Assignment_1
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Solution 1
Issue 1(a)
Is Jack liable for the payment of the invoice?
Relevant Law
When any two parties share the relationship of a principal and an agent, then, they are governed
with the laws of agency. An agency is established amid the parties when any person (as an agent)
is hired by the principal in order to carry out functions on behalf of the principal with the third
parties. Any contractual relationship which is carried out by the agent with the third parties has a
binding effect on the principal. When any agent acts for the principal, then, an indirect
association is established amid the third party and the principal, wherein, the third party can hold
the principal liable for the acts that are carried on but the agent within his authorities. No
principal can deny the existence of such acts/omissions which are carried on by an agent within
the authority. (Turner 1999)
In the leading case of Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964],
the courts have established that the authority that is presumed by the agent from the principal are
normally of two kinds, that is, actual and ostensible authority. (Gibson and Fraser 2013)
An actual authority is said to be possessed by the agent when the principal directly confers or
delegates authority to him. This can be done either expressly or impliedly. An actual express
authority is granted to an agent when the principal directly himself confers or delegate power to
the agent to represent him in front of the third parties. The grant of the authority is very direct,
that is, either by words, or by acts, or in written form. The only requirement is that the delegation
is direct and expressed and is held in the leading case of Construction Engineering (Aust) Pty
Ltd v Hexyl Pty Ltd (1985). But, an actual implied authority is an authority that is assumed by the
agent impliedly, that is, these are the authority that are assumed by the agent in order to comply
with the express authorities, that is, they are derived from the express authority itself and is held
in the leading case of Hely-Hutchinson v Brayhead [1968]). Both, these authorities are actual
authorities that are delegated to an agent by the principal thereby making the principal personally
liable for the acts or omissions undertaken by the agent within such authority.
LST5CCL - Company and Commercial Law Assignment_2
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Now, there is yet another authority that can be possessed by an agent and is called apparent
authority or the ostensible authority. An ostensible authority is present and is possessed by an
agent when the principal makes any kind of representation which portrays or gives a feeling to
the third party that the agent is the delegator or the authorized representor of the principal. In
such authority if any act or omission is carried out by an agent with the third party then such act
or omission is binding on the principal and the third party has all the authority to sue the
principal for the compliance of such act or omission and is held in the leading case of Panorama
Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971]. In the leading case of
Goldberg v Jenkins (1889), the apparent or the ostensible authority is established and it was held
that in order to make an agent authorised and to assume powers to bind the principal by his acts
or omissions, it is necessary that there should be some representation made by the principal in
front of the third party which makes the third party believe that the agent is the authorized
representor of the principal and any act under such authority will grant power to the third party to
sue the principal. (Collins 2003)
Application of Law
Le Petit Gâteau’ is owned by Jack. He runs the bakert café as a sole proprietor. The bakery sells
freshly baked artisan bread and a range of pastries to patrons. Michelle is appointed as a chef
manager at the bakery.
Now, there are several responsibilities that are allocated by Jack to Michelle expressly. Thus, the
express authority that is allocated to Michelle includes:
i. He is mainly authorized to supervise everything that moves out of the kitchen.
ii. He is in full control of all the culinary assistants and the chefs.
iii. He discussed the purchase of the supplies, mixers and bake wares with Jack.
Now,
Michelle discuses regarding the purchase of the supplies, mixers and bake wares with Jack and it
is after the discussion, Jack suing off the orders internally and then it is Michelle who then
dispatches the orders to the suppliers. Thus, it is Michelle who is dealing with the suppliers
directly on behalf of Jack.
LST5CCL - Company and Commercial Law Assignment_3
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Now, Glitzy Touch is one of the suppliers of Jack. It is in regular dealing with Michelle on
behalf of Jack. After securing orders from Michelle it sends invoices to Jack.
Now, it is submitted that there is ostensible authority that can be possessed by Michelle on behalf
of Jack. It is submitted that Jack has made a representation in front of Glitzy Touch that Michelle
is the authorized representative of Jack and is thus permitted to secure orders on behalf of Le
Petit Gâteau’. Jack by sending the orders through Michelle has made the outsider believe that
Michelle is authored to seek orders. This representation is made by Jack on his own. The
delegation of authority on Michelle is direct. Glitzy Touch is giving orders to Michelle on the
basis of the said authorization only. There are no reasons to make Glitzy Touch believe that
Micelle is not permitted to seek orders on behalf of Jack.
It is thus submitted that in the month of November when Jack was on a work trip to Montreal, an
offer is received by Michelle from Glitzy Touch to purchase a supply of edible gold leaf sheets at
less than half of the usual cost. The offer was found to be very attractive by Michelle and the
application of the gold leaves on the cakes and chocolates might be very beneficial in the festive
season. Michelle is also aware that Jack was discussing him with the challenges that they might
face in the season. Michelle was not able to reach Jack and thus confirms the order to Glitzy
Touch.
Now, it is submitted that Glitzy Touch’ is in regular tough with Michelle and seek order from
him on behalf of Jack. This authority is granted to Michelle by Jack himself and Glitzy Touch’ is
aware of the same. Thus, there is clear presence of ostensible authority on the part of Michelle
and the order of $5,000 worth of supplies that is taken by Michelle with Glitzy Touch’ on behalf
of Jack is valid in nature.
The order is considered to be valid as Glitzy Touch’ is not aware of any defect in the authority of
Michelle, that is, Jack has not expressly allowed Michelle to confirm the order to the gold leaves
with Glitzy Touch.
Conclusion
Thus, the order of $5,000 worth of supplies by Michelle with Glitzy Touch’ is valid as the same
is carried under the ostensible authority that is assumed by Michelle on behalf of Jack. Thus,
Jack cannot refuse to pay the invoice that is raised by Glitzy Touch’.
LST5CCL - Company and Commercial Law Assignment_4

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