Company Law Assignment

Topics: Corporation, Finance, Company Pages: 3 (1652 words) Published: November 3, 2014

Question 1.
[Section 126] stated that a company is allow to contract through an agent and a company will be bound by the acts of its agents in the same way as any other principal. An agent’s acts bind the company into a contract with an outsider when rules of agency law applied. In this case an agent’s apparent or ostensible authority arise. This authority arise because when the receptionist represents Harry out to Micky and Harry did not specify that he wasn’t the factory manager, given Micky the impression that Harry has the requisite authority to enter into a contract on the company’s behalf. [Section 129(4)] states that a person may assume that the officers and agents of the company properly perform their duties to the company. Furthermore, it is difficult for Micky to know whether Harry has the actual authority because usually they relies on the “appearance” of authority. In other words because when Micky ask the receptionist for the factory manager, Harry’s appearance has given Micky the impression that he was actually meeting the factory manager. [Section 129(3)] denotes a person may assume that anyone who is held out by the company has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised. Under the case [Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd] state the facts that outsiders will never know the agent’s actual authority but to judge on the agent’s apparent or ostensible authority. If the agent’s act within the scope of this authority, the company is bound by the agent’s actions. Under the case [Royal British Bank v Turquand], the Turquand’s rule allows person dealing with a company to assume that its internal proceedings were properly carried out even though was not in fact true. This rule has adopted by [Section 129(1)] which entitled an outsider to assume that the constitution of the company and any applicable replaceable rules have been complied. This interprets that Micky is...

References: Phillip Lipton., Abe Herzberg., Michelle Welsh. (2014) Understanding Company Law (17th edition), Australia, Sydney: Thomson Reuters
CCH Australia Limited. (2014) Australian Corporation & Securities Legislation (Vol. 1 2014), Asutralia, Sydney
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