Introduction to Company Law Discussion 2022

Running Head: Company Law 0
Company Law
8/25/2019
Student’s Name

Company Law
1
Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

Company Law
2
Issue
Whether the City of Sydney and Ultimate Computer Program has the right to enforce the
contract against Events R Us Ltd?
Rules
As per section 124 of Corporations Act 2001 (Cth), a corporation has the power to
develop the contracts. Section 126 of CA 2001 allows the appointment of agent (Lipton,
Herzberg & Welsh, 2017). As per this section the power of a company to create, modify, ratify,
or discharge of contract lies with individuals who act on company’s behalf and have actual or
implied authority (Hatcher, 2016).
Now the issue arises that whether a company may be held liable for conducts of such
persons or not. In order to address this query, this is to state that company in the capacity of
principal is liable for the actions of its agents i.e. of directors and officers. Nevertheless, they
must have at least one or more kind of authority. The first kind of authority is an actual authority.
This actual authority is the one where principle gives power to the agent to do certain acts on its
behalf either in write or oral mode. In those cases where powers of directors are clearly restricted
they cannot held company bound with their actions under actual authority where such action
breach the given instructions.
In addition, to express authority, the implied authority also exists that bound the company
by actions of directors. The case of Royal British Bank v Turquand (1856) 119 ER 886 provided
that implied authority presents there because of the position held by the company. Here an
outsider has reason to believe that because of the position held by the person; the same had