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TMA 01 - Assignment on Contract Law

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Singapore University of Social Sciences

   

Contract law and tort law (TMA 01)

   

Added on  2020-03-04

About This Document

We will discuss issues, a contract entered into prior to incorporation, the contract entered into in the capacity of a director and breach of a director’s duties. It will also discuss the application of the law, law of equity and contract binding on Jane and Adriana. It will be covering principles of laws.

TMA 01 - Assignment on Contract Law

   

Singapore University of Social Sciences

   

Contract law and tort law (TMA 01)

   Added on 2020-03-04

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PAGE \*Running head: Contract Law1Contract LawName of the StudentName of the UniversityAuthor Note:Contents
TMA 01 - Assignment on Contract Law_1
PAGE \*Title2Solution 13Issue: Contract Entered Into Prior Incorporation3Contract entered into prior incorporation3Validity of Contract between SSA and Computer Supply Pty. Ltd.4Position of Jana and Adrian5Issue: Contract Entered into in the Capacity of a Director5Contract entered into by Director on Behalf of the Company5Contract Binding on Jane and Adriana7Position of Jane and Adrian7Solution 27Issue on Breach of Director’s Duties7Breach of Director’s Duties under Statutory Law and Law of Equity8Application of Law for the Breach of Director’s Duties10Position of Karen11References12
TMA 01 - Assignment on Contract Law_2
PAGE \*Title3Solution 1Issue: Contract Entered Into Prior IncorporationWhether the contract between Bob and Computer Supply Pty Ltd. prior to the incorporation ofSunshine Scooter Art Pty. Ltd. (“SSA”) was binding on SSA?Prior incorporation: ContractThe principle well-settled in Australian and English law is that there cannot be valid ratificationof a contract that has been made prior to incorporation in the name of agents or promoter.Promoter is not an agent of the company.It is not possible under equity for an unregistered company to be a party to a contract andneither can it ratify such a contract post its incorporation (Kelner v Baxter, [1866]). It was priorto the commercial contracts becoming prevalent that the rules with respect to ratification wasestablished. One of the primary rules is that a contract cannot be ratified by a principle, unlessat the time when the contract was being entered into the principal was in the position of enteringinto such a contract on its own behalf (Kelner v Baxter, [1866]). This means in case of acorporation a ratification is not a possibility unless at the date of the contract which is sought tobe ratified the corporation was in existence. The Corporations Act, 2001 section 124 provides that the company has the same legalcapacity as that of an individual including the power of entering into an agreement and section125 provides effectively that the act’s performance, including forming an agreement that is notwithin the power of the company under its constitution will not be invalid. A contract however, made by the company’s promoter on the behalf of the company butbefore the formation of the company cannot be enforced under company. However, undersection 131(1) if the pre-registration contract is ratified within a period of time that is agreed and
TMA 01 - Assignment on Contract Law_3

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