Corporation Laws
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 being fixed in the presence of, and witnessed by, Nick Galli and Pia Galli
(d) By being signed by Nick Galli and Pia Galli
(e) By being signed by Mario Galli and his friend Ryan Booker (Ryan does not work for FWPL).
See 23-200 – 23-400, 25-390 and ss127 and 129 Corporations Act
Overview: * Contracting with a company requires both formal authority and substantive authority.
* Section 127(1) Corporations Act,
* Section 127 gives formal authority to sign documents.
* To establish substantive authority (in the absence of a board resolution) the party to the contract would need to show that the officers or agents have enough actual or apparent authority to bind the company.
* There are two types of authority that an agent of a company might have:
* actual authority; * apparent authority.
(a) By being signed by Nick Galli for and on behalf of FWPL
Is Nick a director of FWPL? Yes/No
Does he have formal authority to sign by himself under s127? Yes/No Why?
Does he have substantive authority? Yes/No Why?
Actual authority means:
Has the board made a decision? Yes/No
Does Nick have express actual authority to sign the contract? Yes/No Why?
Implied authority:
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 being fixed in the presence of, and witnessed by, Nick Galli and Pia Galli
(d) By being signed by Nick Galli and Pia Galli
(e) By being signed by Mario Galli and his friend Ryan Booker (Ryan does not work for FWPL).
See 23-200 – 23-400, 25-390 and ss127 and 129 Corporations Act
Overview: * Contracting with a company requires both formal authority and substantive authority.
* Section 127(1) Corporations Act,
* Section 127 gives formal authority to sign documents.
* To establish substantive authority (in the absence of a board resolution) the party to the contract would need to show that the officers or agents have enough actual or apparent authority to bind the company.
* There are two types of authority that an agent of a company might have:
* actual authority; * apparent authority.
(a) By being signed by Nick Galli for and on behalf of FWPL
Is Nick a director of FWPL? Yes/No
Does he have formal authority to sign by himself under s127? Yes/No Why?
Does he have substantive authority? Yes/No Why?
Actual authority means:
Has the board made a decision? Yes/No
Does Nick have express actual authority to sign the contract? Yes/No Why?
Implied authority: