Company Law

Running head: COMPANY LAW 1
Company Law
Student’s Name
Date

COMPANY LAW 2
The legal issue
The first issue is whether Ultimate Computer Programs and the City of Sydney can
enforce their contracts against Events R Us Ltd based on the contracts validity. The second issue
is the legal position in case of a company acting beyond its constitutional provisions. The last
issue is the power of directors and the legal relationship between these directors and the
company as dictated by the constitution.
The relevant laws
The validity of a contract is determined based on merits provided by contract law of
Australia. These merits are:
Offer and acceptance: a condition where an agreement is made between the offerer
willing to be bound by particular terms and the offeree who accepts the terms, as in New South
Wales Supreme Court Advances Ltd v. McWhirtes.
Capacity to enter into a legally binding contract whereby the age and mental stability of
the persons getting into the contract is considered, so that the person understands clearly the
nature and conditions of the legally binding contract.
Consideration; which is a promise or item of value that supports the contract, in Australia
there is no specific definition of consideration due to diversity in interpretation of value as seen
in Dunlop v. Selfridge Lord Dunedin (Poole, Devenney & Shaw, 2017). Lastly, the contract must
be carried out within the legal framework of Australia laws so that it does not violate any laws
(Lindgren, Carter & Harland, 1986).
Based on Corporation Act section 124 on the powers of a company, once the company
has been registered it contains and holds the same powers as that of an individual which means it
has the capacity to abide or violate laws. Section 125 of the act sets out optional need for