The Corporations Act neither codifies nor excludes rulings at common law in relation to a company’s dealings with outsiders. This means that in advising TV Treats of their contractual obligations, consideration need be paid to both common law and statutory positions. While there is some overlap between the two, inconsistencies between sources of law can result, leaving legislation to take precedence.
A. Authority of a Company Secretary
In considering whether or not TV Treats is bound to pay for both the cocktail party and sponsorship of the soccer team, the key concerns for the company are whether they can rely on constructive notice, whether or not Jennifer has authority to enter into contracts on the company’s behalf, and whether she satisfied her duties as an agent.
At common law, contracting parties are assumed to have constructive notice of publically available documents. However, while EventsRUs could be held as being aware of the company’s constitution, according to Turquand’s Case they need not go further to ensure that the internal proceedings of the company have been properly carried out. For that reason, TV Treats is unable to rely on the doctrine of constructive notice in order to free themselves from contractual obligations.
Where an agent enters into a contract on behalf of a principal, the principal is bound insofar as the agent acts within the scope of their authority, whether real or ostensible. The real authority possessed by Jennifer is that customarily exercised by others in her position, and is not on its own sufficient to render TV Treats liable. However, as was recognised in Panorama Developments, a company secretary also has an apparent authority to enter into contracts of an administrative nature. Whether or not the arrangement of marketing events falls within this definition, TV Treats will be liable for the cocktail party, to the extent... [continues]
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