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(Solved) Assignment on Commercial Law

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Added on  2021-06-15

(Solved) Assignment on Commercial Law

   Added on 2021-06-15

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Running Head: COMMERCIAL LAWCOMMERCIAL LAWName of the Student:Name of the University:Author Note
(Solved) Assignment on Commercial Law_1
1COMMERCIAL LAWAnswer One:Issue:The issues that are identified in the given scenario are:What is the legal position of Michele and Tom, the director and secretary of the companyMotorbikes Pty Ltd. in relation to the contract that had been entered upon by the partiesand John for the purchase of the motorcycle? Whether a legal contract had been formed between the parties?Can Michelle and Tome avoid their contractual obligations?Law:It has been provided in section 126(1) of the Corporations Act 2001 (Cth) that a person whoperforms any action on behalf of the company by the use of his express or implied authority hasthe power to rescind, ratify and the change the terms of the contract which is binding upon thecompany or the organizations. It has been specifically provided in this section that the commonseal of the company need not be present for the person who acts on behalf of the company toexercise his power. However the provisions of these sections do not intervene with anyprovisions of the common law which are essential for the formation of a valid contract. Further it has been provided in subsection 124(2) of the Corporations Act 2001 that a companyhas the legal capacity of entering into a contract in the name of the company even when thecontract is not in the best interest of the company or the organization.In section 129 of the Corporations Act it has been provided that any person who transactsbusiness or enters into a contract with an organization can assume that the person who is listed as
(Solved) Assignment on Commercial Law_2
2COMMERCIAL LAWthe director of the company is duly appointed by such company or organization. It has beenfurther specified in this section that a company cannot claim the assumption of the third partiesin relation to the directors of the company as incorrect. It has been specified in section 129(5) of the CA that any document that has been given effectby the directors or the company secretary of the company, the third party incurs the right to relyon the assumptions which have been produced in the name of the company. It has been furtherprovided in the section that a third party gains the right to assume that a contract has been dulyexecuted if the organization has complied with the provisions as provided in section 127(1).It has been provided in section 127 of the corporations Act that an organization has the right toissue and execute a document. Such document need not have a common seal of the company ifthe company secretary or two directors of the company signs such a document. In the notable case Northside Developments Pty Ltd v Registrar-General (NSW)(1990) 170CLR 146 it had been held by the court that a company represents the authority in relation to theperson who acts on behalf of the company due to the express or implied authority vested in him.In another notable case Royal British Bank v Turquand (1856) 6 El & Bl 327 it had been heldby the court that an individual who enters into a contract with the company and deals with theorganization in a bona fide manner can assume that the contract or transaction with the companyis consistent with the powers of the directors or the constitution of the company.ApplicationAs provided in the case study through the facts of the case it can be stated that Michelle was thecompany secretary of Motorbikes Pty Ltd and Tim was acting as the director of the company.
(Solved) Assignment on Commercial Law_3

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