Assignment Business Laws
Added on - 28 May 2020
Showing pages 1 to 3 of 8 pages
Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
1BUSINESS LAWSPart 1IssueThe questions which needs to be analyzed in relation to the scenario is the legal position of Timand Michelle who are acting as the secretary and directors of Motorbikes Pty Ltd respectively inrelation to a contract which has been entered with John for purchasing a motorcycle.Sub-issuesHas a legally binding contract being formed between the partiesIn case a contract has been formed whether Tim and Michelle can rescind the contractRulesAccording to section 124(2) the Corporation Act 2001 (Cth) it has been provided that thecompany has the legal capacity of getting into a contract even where the contract is not is thebest interest of the organizationAs stated by section 126 of the CA a person who works on behalf of an organization throughimplied or expressed authority has the power to get into, rescind, ratify and change the terms ofthe contract which binds the organization. The common seal of the company is not required bysuch person in order to exercise such power. In addition any other law which is required forforming a valid contract is not intervened by the provisions of this section.Moreover an organization for the cannot get into a contract which is restricted by a state orterritory along with any rights which is provided by the contract and not allowed by the state orterritories laws.
2BUSINESS LAWSAs stated by section 127 of the CA an organization can execute a document even in case it hasnot used the common seal if two directors of the organization or a company secretary and adirector have approved the contract thorough signature.According to section 129 of the CA an individual who deals with an organization has the right toassume that any other individual who is listed through the organization as a director has beenappointed duly by the company and the company cannot claim such assumptions as incorrect.In situation where a document has been given effect in the above discussed manner, the otherparty gains the right to rely on assumptions provided through section 129(5) of the CA in relationto dealing with respect to the company. According to Section 129(5) of the CA an individual hasthe right to make assumption that a contract has been executed duly by the company if it hascomplied with the provisions of section 127(1). The individual is also provided with the right tomake assumption that a document has been duly executed with seal and it can also be assumedthat persons who depict themselves and the sole secretary and directors of the company areactually so.It had been ruled by the court in the case ofRoyal British Bank v Turquand (1856) 6 El & Bl327that an individual contracting and dealing with the organization in a bona fone manner hasthe right to assume that the dealing or contract is consistent with the constitution and within thepower of such directors.It had been provided by the judge in the case ofNorthside Developments Pty Ltd v Registrar-General (NSW)(1990) 170 CLR 146that the company has to make a representation of authorityin relation to the authority held by the person working on behalf of it.Application