Business Law Issue Analysis - Assignment
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Added on 2021-06-14
Business Law Issue Analysis - Assignment
Added on 2021-06-14
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Running Head: BUSINESS LAWBUSINESS LAWName of the Student:Name of the University:Author Note
1BUSINESS LAWPrimary issue In the given case the issue is to analyze the situation of Tim and Michelle who are the secretaryand the director of the company Motorbikes Pty Ltd respectively, in relation with the contractthat they have signed with John for buying his motorcycle.Secondary issue There is the question of having a valid or legal contract among the parties.If the contract is valid then do Tim and Michelle have an option to rescind the contract?LawSection 126 of Corporation Act 2001 (Cth) explains that if any person has an implied orexpressed authority and work on company’s behalf, then he or she carries the power todischarge, make or rectify the contract that is binding upon the company. There is no need of thecommon seal of the organization to exercise the power to work on it. There are no other laws thatcome in this section that is required to get the process completed for getting into the contract1. If there is no permission provided by the state or territory then the company cannot get into thecontract or another thing is that if there are certain rights of the contract which is forbidden bythe state laws is provided to the company then also the company cannot get into the contract. An individual who is working with the organization as per the section 129 of the Corporation Act2001, has the right to accept the individual who is chosen as the director by the organization and1 Corporation Act 2001 (Cth) s 126
2BUSINESS LAWthey have been employed by the organization and theseassumptions cannot be mentioned by theorganization as incorrect2.According to the section 127 of the Corporation Act it has been mentioned that the documentmight be accomplished by the organisation if the Common seal of the companyis not used andthe contract needs approval by the signatures of both the directors, a company secretary or adirector of the organisation and the only secretary or director of the organisation3. As per the section 129 (5) of CA, it has been said that an individual can assume that the contracthas been properly implemented by the organization if they have contracted in relation to thesubsection of 127 (1)4. As given in the subsection 129 (5) in relation to dealing with the companyif the document has been implemented as the way it has been discussed, the other party has theright to depend on the assumptions. An individual carries the right to assume that execution ofthe documenthave been done with the Common seal of the company and the individual isassumed to be sole secretary and director of the organization who must carry the right. The court has stated, that an individual who is dealing with the organization and making acontract with them must be bonafide and they must assume that contract is consistent and is inthe powers of the company’s constitution as per the case Royal British Bank v Turquand (1856)6 El & Bl 325. It has been stated according to the case of Northside Developments Pty Ltd v Registrar-General(NSW)(1990) 170 CLR 1466, that authority should be represented by an individual who isworking on the company’s behalf and it must be done by the organization. 2 Corporation Act 2001 (Cth) s 1293 Corporation Act 2001 (Cth) s 1274 Corporation Act 2001 (Cth) s 129 (5)5Royal British Bank v Turquand (1856) 6 El & Bl 326Northside Developments Pty Ltd v Registrar-General (NSW)(1990) 170 CLR 146
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