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Contract Validity and Company Representation

   

Added on  2020-03-23

9 Pages1759 Words40 Views
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1Cover PageName of the studentStudent IDWord count
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2ContentsSolution 1....................................................................................................................................................3Issue........................................................................................................................................................3Law..........................................................................................................................................................3Application..............................................................................................................................................4Conclusion...............................................................................................................................................5Solution 2....................................................................................................................................................5Issue........................................................................................................................................................5Law..........................................................................................................................................................5Application..............................................................................................................................................6Conclusion...............................................................................................................................................7Reference List.............................................................................................................................................8
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3Solution 1IssueCan Motorbikes Pty Ltd rescind the contract entered by Michelle and Tim with John?LawAny person in Australia if intends to establish a corporation, then, he must comply with theprovisions of the Corporation Act 2001. An entity upon incorporation gains the status of acorporation. As per Saloman v saloman (1896) every corporation become an artificial personnelonce registered. The company acts like a person and has every right and power of a person, but,it does not have the heart to beat and mind to think. In order to conduct the affairs of thecompany, it needs some living person who is called the officers of the company. (Bourne, 2013)The company director is one such person and he is authorised under the Corporation Act 2001(section 198A) according to which a company is obligated to carry out its function under theadministration of the director. Thus, a director must be authorised to carry out the functions ofthe company and is held in Hely-Hutchinson v Brayhead Ltd [1968]. (Krawitz, 2002)So, authority on the part of the company officer plays a prime role to make a company liable bytheir actions. This is authenticated as per Section 126 of the Act according to which an agent ofthe company has the power to make, ratify, discharge the contract on behalf of the company andthis power of the agent can be possessed even if the company is contracting without the commonseal and is held in Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd[2014].(CooperGranceWard, 2015)
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