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Commercial and Corporation Law- Royal British Bank v Turquand case

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Added on  2020-05-16

Commercial and Corporation Law- Royal British Bank v Turquand case

   Added on 2020-05-16

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Running head: COMMERCIAL AND CORPORATION LAWCommercial and Corporation LawName of the StudentName of the UniversityAuthor Note
Commercial and Corporation Law- Royal British Bank v Turquand case_1
1COMMERCIAL AND CORPORATION LAWTable of ContentsIntroduction (Common Law Position).............................................................................................2Issue.................................................................................................................................................2Relevant law....................................................................................................................................2Application......................................................................................................................................4Observation......................................................................................................................................7Conclusions......................................................................................................................................8Reference List..................................................................................................................................9Bibliography....................................................................................................................................9
Commercial and Corporation Law- Royal British Bank v Turquand case_2
2COMMERCIAL AND CORPORATION LAWIntroduction (Common Law Position)According to the provisions of common law, a person who indulges in a transaction witha corporation having an assumption that her actions are without any knowledge of irregularitiesand in actually bona fide, does not have the liability of making an inquiry in relation to thecompliance of the organizations internal proceedings. The person has the right of making anassumption that the functioning of the organization is in compliance with all legal provisions.This particular principle had been provided through the Royal British Bank v Turquand1 caseand is known as the “indoor management rule”. In addition the basic provisions in relation to thelaw of agency provide that the principle is bound by the actions of the agent where the actionshave been conducted within the actual or apparent authority of provided by the principle. Issue The issue which has been identified in relation to the given situation is that whether theorganization Two2’s Pty Ltd is bound by the contract entered upon by Pauline. Relevant law Section 125 of the Corporation Act provides that an act which is contrary to theconstitution of the company is not invalid only because the constitution does not allow it. Where a contract is signed properly and in a valid manner it is binding upon thecompany even if it is not within the powers provided by the constitution as provided through thecase of Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd21 [1856] 6 EL & BL 3272 [2014] SASCFC 103.
Commercial and Corporation Law- Royal British Bank v Turquand case_3

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