Company Law Assignment : The Corporations Act 2001

2323 Words Sep 13th, 2014 10 Pages
Company Law Assignment

(All sections are referred to the Corporations Act 2001)

Part A
i. According to S129, a company be legally bound by a contract depending on the authority granted to an agent or officer under the common law of statutory provisions. A contract can be directly executed under the common law provision s127(1) which states that a contract is executed when signed by two directors or a director and a company secretary. Ickea can rely on the statutory assumptions under s129(3), which proposes that James was duly appointed and had appropriate form of customarily authority, s129(5) where the contract was appropriately signed per stated in s127(1) and s129(7) where the officer/agent was given the authority to license the documents.

When Friendbook executes a document in accordance with s127(1), Ickea is allowed to rely on s129(5) and s129(7) as stated in s128(3), that allows the assumptions to be relied on even if agent of the company acts fraudulently or forges a document related to proceedings, authorized in Story v Advance Bank Australia Ltd . But these statutory assumptions don’t apply if the Ickea had knowledge that these assumptions were false under s128(4). Therefore, Friendbook is not bound to the contract since Ickea cannot rely on the statutory assumption s127(5). If there was an agency agreement where James signs “for and on behalf of co”, the contract would be valid because James is the managing director and was given express authority/implied…
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