HI6027 Business and Corporate Law: Group Case Study Assessment

This document presents a comprehensive case study analysis of business and corporate law, addressing two key issues: termination of contract by frustration and contracts made prior to registration. The first part examines whether Gary is liable for a contract to supply metal frames, consider...Read More

CORPORATION AND
CONTRACT LAW
Termination of Contract by Frustration And
Contracts Made Prior To Registration

CONTRACT LAW ISSUE
 whether Gary is liable to perform the contract in relation to the
supply to be made to the apartment developer.

CONTRACT LAW RULE
 A contract can only become enforceable before the law, if the
parties involved have complied with all the essential requirements
of the valid contract while creating the same and thus obligated
each other to carry out the functions in compliance with the
conditions of the contract.
 There are certain contingencies under which the performance of the
contract by the parties can be avoided or extinguished.
 Under such circumstances a contract can be terminated or
discharged.
 Under contract law there are six such ways that has evolved with
several precedents that makes termination of a contract valid.

RULE CONTINUED
 the performance of all the terms and conditions of the contract may lead to the
extinction of the contract.
 any term of the contract, which has been inserted in the contract prior to its
creation to have the effect of discharging the contract on the fulfilment of the
same will bring an end to the contract by virtue of such a fulfilment.
 An agreement that requires the contract to be terminated or altered may also
lead to termination or discharge of the contract.
 a breach of the terms relating to the contract committed by any of the parties me
also provides the other party with power to effect termination of the contract.
 statutory alteration may also render of contract to be discharge on the grounds of
impossibility of performance.
 contract can also be terminated by virtue of the doctrine relating to frustration.

APPLICATION
 a tender has been obtained by Gary which required him to make supply of metal frames which will
be used for construction purposes in a high rise apartment development.
 This can be said to be the formation of a valid contract which has created a right and obligation
pertaining to the parties that needs to be complied with.
 there has been an East-West Tunnel Link Project that has been taken up by the government, which
has acquired the property for the purpose of that project that has been held by Gary long-term lease
locate his factory.
 This has required to look for another site for locating his factory but it was evident that the same
would required another 6 months.
 This vote for the delay the performance of the contract as it would be impossible for the contract to
be commenced within a period of 6 month under the present set of circumstances.
 This is because the performance of the contract on the given circumstances has become impossible.
 The parties involved in the contract however does not have any control over the circumstances.
 Gary cannot be compelled to perform the contract with respect to supply of metal frames to the
apartment developer.

CONTRACT LAW CONCLUSION
 Gary is not liable to perform the contract in relation to the
supply to be made to the apartment developer.

CORPORATION LAW ISSUE
 Whether Carvers Pty Ltd have any entitlement towards making
any assumptions.
 Whether any liability is imposed upon Adam and Poh for the
payment towards the tablecloths supplied by Linen Ltd.

CORPORATION LAW RULE
 U/s 131(1) of the Act, the contracts that a company has instituted before coming into existence as a
separate legal entity is required to be e considered as a binding contract upon the company.
 U/s 131(2) of the Act, the failure to ratify any prior contract by the company before its registration as a
company will hold the person who has been involved in the formation of the contract to pay damages to
the aggrieved.
 A discretion has been conferred upon the court by virtue of section 131 (3) of the Act, in arriving at a
decision regarding the quantum of damages that needs to be paid by the person in case the, which
company failed to make a ratification of the contract instituted before its incorporation.
 As provided u/s 131(4) of the Act, the payment of the damages that is required to be paid by the company
will be e treated as the same amount that would have followed in case of any breach of the company
towards the contract if the same has been ratified.
 The execution relating to the documents of the company has been provided under the provisions contained
u/s 127 of the Act.
 The power to assume in dealings with a company has been conferred upon a person by virtue of the
provisions u/s 128 of the Act.
 A detailed enumeration of the assumptions that a person might make on the dealings with the company
has been provided u/s 129 of the Act.

CORPORATIONS LAW APPLICATION
 The contract has been entered into with Irish Linen Ltd for the purpose of
supplying table cloths. This is required to be treated as a contract entered by
the company as per section 131 of the act try to the incorporation. This
requires the contract to be ratified after the registration of the company has
been completed.
 In the present case as Adam and Poh has failed to ratify the contract after
the registration of the company within reasonable time the contract is
constituted to be accepted by default. In this case the company may either
perform the terms of the contract or may pay damages for the breach of the
contract.
 the contract has been performed by Irish Linen Ltd by making the supply in
relation to the table cloths. This requires the Master Plate Pty Ltd to accept
the delivery as well as make payment towards the tablecloths.

APPLICATION CONTINUED
 Master Plate Pty Ltd has fixed their seal on the documents
effecting the contract with the Carvers Pty Ltd, which
empowers them to assume certain things regarding the
company.
 The assumption are that the company has complied with all
the articles of association, regulations as well as bye laws
pertaining to the company.
 Any such outsider is not empowered to raise any enquiry
regarding the internal management of the company.

CONCLUSION
 Carvers Pty Ltd have an entitlement towards making the
assumptions that the company has complied with all the
articles of association, regulations as well as bye laws
pertaining to the company.
 Adam and Poh are liable for the payment towards the
tablecloths supplied by Linen Ltd.