Assignment on Business Corporation

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Added on 2021-06-18

Assignment on Business Corporation

Added on 2021-06-18

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Running head: BUSINESS CORPORATIONBusiness CorporationName of the StudentName of the UniversityAuthor note

1BUSINESS CORPORATIONAnswer One:IssueThe following are the issues that consist in this question. Firstly, a valid contract wasformed between Gaby and Sara. Secondly, whether Terrence was liable to pay for the price ofthe gold that was ordered by Peter. Thirdly, Terence have to pay for the diamonds that Peterhad ordered after his period of termination.LawAs per the Agency Law, it can be observed and stated that an agent is treated to be anindividual who is given the authority by the principal to act on his behalf when third partiesare associated. Therefore, generally an agent is the conferred authority by the principal so thathe can perform the duties on his behalf based on the agreement of agency. An agreement ofagency consists of the parties that is the principal who delegates the agent to carry out theactivities on his behalf. Thereafter, the principal should allot the authority in an implied orexpressed manner. Lastly, when the third party transacts with the agent in order to make himbelieve that he would be acting on behalf of the principal. It was observed that in theactivities of agents form based on the principals especially if it is determined that the thirdparty had proper proof to make him believe that the agent was acting within the scope ofauthority. However, the principal is usually not entrusted with such authority. In accordance to the judgment of Hansen v Marco Engineering (Aust) PtyLtd[1948] VR 198, it was observed that it involved the process of undisclosed principalswhere the agents can be sued by the principal. In other cases, it was noticed that when anagent carries on a business with another party and fails to disclose that he was actually actingwithin the authority that was allotted to him by the principal. The agent was barely

2BUSINESS CORPORATIONrepresenting the principal and the third party will therefore have the choice to demandperformance. The doctrine of election refers to a situation where it has been determined thatthe authority can be segregated into the apparent and original authority. An authority that isentrusted by the principal to the agent either orally or in writing is known as an expressauthority. On the other hand, the theory of implied authority is also applicable in this casestudy. When an authority is governed by the courts to have an implication in the agreementof partnership is defined as an implied authority. The purpose of this authority is to executethe duties that are allotted to the agent expressly. Such a situation was observed in ACCC vFlight Centre Travel Group Ltd(2016) 339 ALR 242. This case chiefly dealt with theimplied authority. This case stated that the passenger had forbidden to purchase any kind ofproduct from the attendant. However, the passenger purchased the product and therefore itwas held by the Court that the flight attendant was held liable to compensate the same amountas it was governed by the Courts that the activities of buying such products was included inthe original and normal authority of agent.Apparent authority is usually governed by the courts where the third party believedthat the agent had carried out his given duties as directed by the principal. The agent did soeven when principal had not entrusted the original authority to the agent. Therefore, suchsituations, the principal will be held liable for the activities of the agent. Consolo v Bennett[2012] FCAFC 120 showed that it dealt with the concept of apparent theory. This case statedthat a test needs to be applicable to govern and decide whether it was considered to bereasonable for the third party. It was believed that the agent was originally carrying out theacts on behalf of the agent and the issue was whether the principal had taken proper measuresto prohibit the agent to act on his behalf.

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