This case study delves into two distinct legal issues concerning contract law and company director authority. The first scenario examines whether a contract made by Tim and John is binding upon Motorbikes Pty Ltd, focusing on the authority of directors and company secretaries under the Corporations Act 2001. It applies relevant sections of the Act and case law, such as Salomon v. Saloman, to determine that the contract is indeed binding due to the authorized actions of both Michelle (director) and Tim (secretary). The second issue investigates whether George has the power to terminate a contract with Cakes Pty Ltd, exploring the concept of a company as a separate legal entity and the assumptions third parties can make when dealing with company agents under section 128 and 129 of the Act. Despite potential irregularities in the contract's signing, it concludes that the contract is valid and George cannot terminate it, referencing Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd. The analysis relies on various legal sources, including case laws and academic articles, to support its conclusions.
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