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Corporation and Business Law - Assignment

   

Added on  2021-06-18

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0CORPORATION AND BUSINESS LAWCORPORATION AND BUSINESS LAWName of the Student:Name of the University:Author Note

1CORPORATION AND BUSINESS LAWAnswer to question 1 Legal Issue 1Is Gabby correct in asserting that he has a contract with Sara and not Terence? Relevant Law 1As per the issue the rule applicable here would be that of an undisclosed principal. Where theagent does not declare agency relationship to the third person these rules are applied. Thedoctrine which is imposed in order to address such issues is termed as the “doctrine of election”.The doctrine refers to the rule that in situation where a third party enters into a contract with aperson who is an agent without having reasonable knowledge that the person is acting under theauthority of a principal and gets to know about the identity of the principle latter, such person hasthe choice at law to enter into the contract with either the agent or the principal. The doctrineoriginated through the landmark case of Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC199. The doctrine had been further applied in Australia under various cases by the courts such asMcRae v Bolaro Pty Ltd [2000] VSCA 72 and Immer (No 145) Pty Ltd v The Uniting Churchin Australia Property Trust (NSW) (1993) 182 CLR 26 Application of Law 1Sara has been employed by Terence in her jewelry shop and thus as per the rules of agencyactual authority has been provided to her by Terence. Any action of Sara binds Terence to themlegally. Sara in the scope of her actual authority provided by Terence gets into a contract withGabby. Gabby has no reasonable knowledge in the situation that Sara is working as an agent ofTerence. After the contract has been duly entered between Sara and Gabby, she has been calledby Terence in reation to the contract which Terence as a principal believes that has been formed

2CORPORATION AND BUSINESS LAWby him. Gabby replies that she has a contract with Sara. By applying the principles analyzed inthe rule it can be predicted that the doctrine of election can be applied here. This is becauseGabby did not have knowledge of Sara being Terence’s agent. Through the application of thedoctrine of election discussed above it can be concluded that Gabby is not totally correct in herassertion in the issue that she has no contract with Terence. In reality she has the right to chosewith who she wants to contract Sara or Terence Conclusion 1Gabby can chose to contract with either Sara or Terence Legal Issue 2Does Terence has the right to refuse payment to Mary lawfullyRelevant Law 2The principles of agency law make the principal bound to the actions of the agents. There may bea situation where the agent has exceeded the provided authority and acted in an arbitrary manneragainst the consent of the principal. This situation may put the third party in a confusing statethat whether they can make the principal liable for the actions of the agent or not. In the case ofFreeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 similarcircumstances had been brought before the court. The court in this case made a ruling whichensured that the right of any innocent third party is not violated in such situation. It was ruled bythe court that where authority is exceeded by an agent the third party would be able to make aclaim from the principal where the agent had acted in a way which is in compliance to thenormal course of authority provided to him by the principal.

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