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How Could A Purchaser How Can His Authority Be Determined?

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LAWS7023-Business and Corporate Law 1/2013
Week commencing: Monday, 20.05.13

Tutorial 4: Corporate Finance and Liability Note: Focus in this tutorial is on corporate contracting

Problem Set 12: Read Chapter 23.

1. FWPL has traditionally transported its wine using a fleet of trucks that it owns. It is considering selling the fleet of trucks, which should sell for approximately $3 million. FWPL’s Board of Directors has not yet made a final decision to sell the trucks. Would a contract of sale be enforceable by the purchaser if the contract was executed:
(a) By being signed by Nick Galli for and on behalf of FWPL
(b) By being signed by Mario Galli for and on behalf of FWPL
(c) By the FWPL common seal …show more content…

Yes/No/Do not know

How can his authority be determined? Fiberi case

Is there insufficient information to determine his role? Yes/No

In these circumstances, could a purchaser rely on the IMR s129(2)? Yes/No

Conclusion: Consider Mario’s position re Part B: Reasonable conclusion

2. Would your answer in any case be different if, unknown to the purchaser, FWPL had a constitution and clause 35 of the constitution said “a proposed sale of all or a substantial part of the company’s main undertaking must be approved by ordinary resolution of the shareholders in general meeting”, and this has not been obtained?
See 23-560 * Section 129(1) Corporations Act

* The answer would/would not be different.

3. Would your answer to 1(b) be different if Mario Galli had never formally been appointed as Managing Director, although he acted with the consent of the other directors in that capacity?
See 23-440 and Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd

* Substantive authority: either actual authority or apparent

* Actual authority can be express or implied.

* Implied authority can arise several ways office/position/customary/ acquiescence.

* Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd.

* Selling the trucks is/is not within the usual scope of running the business.

* Conclusion: If yes, company is/is not bound.

4. Would your answer

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