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Business laws Assignment : Four Friends Pty Ltd

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Added on  2021-04-24

Business laws Assignment : Four Friends Pty Ltd

   Added on 2021-04-24

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Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
Business laws Assignment : Four Friends Pty Ltd_1
1BUSINESS LAWSIssue The following the issues which have been identified in context of the given situation:1.Whether Jack and Jill have the right to enforce the contract they had with Four FriendsPty Ltd2.Could Jackson, Ellie, Macie and Will have been able to prevent the expansion if theyknew about Maxwell’s plans3.Do Jackson, Ellie and Macie have the right to dismiss Maxwell and Rupert as directorsof the company 4.Can Jackson, Ellie and Macie prevent Will to sell his shares to Maxwell by altering theconstitution? The relevant Law All the above discussed issues are subjected to the provisions of the Corporation Act 2001 (Cth). It has been provided through the provisions of s. 125 of the Act that a transaction whichhave been entered on behalf of an organization will not be legally invalid only because of thefact that the transaction is not within the scope of the Constitution of the organization1. In addition it has been provided by the provisions of section 124(2) of the Act that whena company gets into a contract through a person who is acting on behalf of it, the contract is notliable to be declared invalid merely because it is not in the best interest of the organization2. 1 Corporation Act 2001 (Cth) s 1252 Corporation Act 2001 (Cth) s 124(2)
Business laws Assignment : Four Friends Pty Ltd_2
2BUSINESS LAWSIt had been ruled by the court in the case of Knight Frank Australia Pty Ltd v PaleyProperties Pty Ltd3that where a contract has been signed according to the provisions of section127 of the Act (by two directors or one director and one secretary) the contract is binding on thecompany. In the same way where the provisions of section 127 have not been followed thecontact does not bind the company4. The other party to the contract has the right to rely on the assumptions provided under s. 129 ofthe Act if the contract has been signed under the provisions of s. 127 of the Act5. Section 128 of the Act state that a person who is dealing with the company has the right to makeassumption under section 129 of the Act. The company is not legally entitled to submit beforethe court that the assumptions made under the section 129 are incorrect. Third party has the right to make an assumption under section 129(1) of the Act that thetransaction which has been entered into by a director or company secretary complies with theprovisions of the constitution of the company6. However, as provided through the provisions of section 128(4) a person cannot rely on theassumptions provided in section 129 of the CA if at the time the assumptions had been made theperson knew or had reasonably suspected the assumptions not to be true7. These provisions hadalso been discussed in the landmark case of Royal British Bank v Turquand83 Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd [2014] SASCFC 1034 Cassidy, J, Concise Corporations Law (5th ed, Federation Press, 2006)5 Corporation Act 2001 (Cth) s 1296 Corporation Act 2001 (Cth) s 129(1)7 Corporation Act 2001 (Cth) s 128(4)8 Royal British Bank v Turquand (1856) 6 El & Bl 327
Business laws Assignment : Four Friends Pty Ltd_3

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