Australian Corporate Law Essay

Submitted By kobe93120
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Pages: 3
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COMPANIES & PARTNERSHIP LAW
Assignment 2
Question 1
When an outsider contracts with an existing company through an agent of the company, they have very little recourse of the company refuses to accept liability for the contract.

It is not common that companies execute their contracts by using an agent rather than contracting by themselves and therefore an agent works on behalf of the company (S.126). However whether an agent could enter into a particular contract depends on the authority that is given by the company. There are different types of authority which are actual authority, apparent authority and no authority.

Question 2 Part 1

Hillside estates Pty Ltd
Directors: Jake and Jill
Shareholders: Jake, Jill, Jill’s mother and father, Mavis and Dave

Vineyard guesthouse Pty ltd
Directors: Jack, Jill and Yuen
Shareholders: Jack, Jill, Yuen, Jill’s mother and father, Mavis and Dave

Issue:
Who is potentially liable for the contracts arising out of the above facts?

Rules:
Corporation Act: Contracts before registration s. 131(1), 131(2) and 131(4)
Existence of binding contract
According to s131 (1) CA, company has to be registered and ratify the contract within time agreed on reasonable time. However, Jack, who is one of the Vineyard Guesthouse Pty. Ltd (VG) shareholders as well as directors, entered into several contract on behalf of VG before VG is registered. The pre registration contracts are the following:
Leasing the renovated premises from HE at an amount of $35,000 for 3 years.
Purchasing all 2013 wine output for $30 per bottle from HE.
Purchasing a kitchen equipment package from Restaurant Superstore for $30,000.
There is no fact indicates that the company acknowledged that VG was not registered. Jack should have revealed this information at first because third party could think that the contract can be ratified straight after the contract made and therefore without a company registration, there was no existence of V. G so that VG could not enter into any binding contracts until it is registered. To continue, assuming that HE knew about VG was not yet registered and giving a specific time within 2 month for the registration from the date of the contract.

Since the name of VG has been registered therefore the company name now is registered as Adelaide Hills Vineyard Guesthouse Pty Ltd (AHVG). Assume AHVG is registered one month after the contract is executed which is within the agreed time. AVGH has to ensure that the contracts are being ratified within a reasonable time. However no
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