Commercial Law Essay

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Introduction: Golden Harvest Ltd (GH Ltd) is a medium sized company to produce a variety of organic breads. The company is comprised of three directors Max, James and Sally. And also include two other shareholders Tina and Patsy. The main area for this case will focus on relevant unit from topic one to four. The questions of this assignment are divided by three parts A, B and C. However, any reference throughout this assignment to a section is a reference to a section under the Corporations Act 2001. Part A Main issue: Whether GH Ltd bound by the contract entered into, on its behalf, with RF Pty Ltd? Sub- issue 1: Does Sally as an agent has authority to acting on behalf of the company? Rule/Law: According to section126 (1), the section states that an agent acting on behalf of the company and the agent act within the boundaries of the actual or apparent and express or implied authority, may exercise the company’s power to make, vary, ratify or discharge a contract. Principle of agency: An agent’s authority may actual or apparent. The actual authority may be either express or implied. Express actual authority is directly clearly identified and implied is not directly indentified (Customary authority will explain in assumption sections). Apparent authority is no authority of an agent exists but merely a representation or holding out of authority. Application: According to case, at a board of directors meeting it was unanimously agreed that Sally as exclusive management of public relations on behalf of the company, and she should be responsible for all public relations matters as part of her role as a director of company. Further, company allows her to sign cheques up to $20,000.00. Thus, Sally as agent has actual and apparent authority to acting on behalf of the company. Sub- issue 2: Does a person have dealing with a company?

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