Question

Computer Whiz Pty Ltd (Computer) has four directors. Charlie is one of the directors. Computer’s constitution...

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?

Homework Answers

Answer #1

Here Simon can rely on the statutory assumptions in section 128 of the Corporations Act 2001 (Cth). As per the statutory assumptions ‘dealings’ with a company can be with someone who has actual authority or ostensible authority to enter into a particular transaction. It need not be with someone who has actual or ostensible authority to enter into the particular transaction.

Simon will be allowed, under section 128, to make assumptions with respect to Charlie’s appearing to be authorized to engage in dealings for his company. Thus Simone can assume that Charlie, who is being held out by the company as its agent, has the authority to exercise powers and engage in transactions and perform duties that is normally or customarily performed by that kind of agent of a similar company.

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