Question

Company Law

ILAC Method

Computer Whiz Pty Ltd (Computer) has four directors. Charlie is one of the directors. Computer’s constitution provides that all transactions over $5,000 need to be approved by a majority of directors.

Charlie enters into a contract for $7,000 with Simone to take photos to update the company website. Simone sends the bill to Computer who are refusing to pay on the basis they never authorised the contract.

Advise Simone as to which statutory assumptions in the Corporations Act 2001 (Cth) she can rely on?

Answer 1

Sec 128 of Corporations Act 2001 speaks about the assumptions that can be made by a person who is entering into contract with the company.

It is stated in the section that a person may assume that anyone who appears, from information provided by the company that is available to the public from ASIC, to be a director or a company secretary of the company has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company.

So in the given case, Simone can take a stand that he had relied upon the assumption stated in Sec 128 of Corporation Act 2001 and acted accordingly. He can claim his bill from the company.