JUST WANT CASES REALTED TO IT..Due date 6 September 2018 Students may work alone
ID: 396160 • Letter: J
Question
JUST WANT CASES REALTED TO IT..Due date 6 September 2018 Students may work alone or in groups up to a maximum of four Referencing: Harvard, APA, or AGLC ‘Mr & Mrs Quibble operate a popular café business in Darwin through a company called ‘Two for Tea Pty Ltd’. Mrs Quibble is a director of the company and Mr Quibble is also a director and secretary of the company. Mrs Quibble goes to Eastpac Bank where ‘Two for Tea Pty Ltd’ has its accounts and asked to borrow $300,000. Eastpac Bank has been the company’s banker for many years and the bank manager knows Mr & Mrs Quibble reasonably well. Mrs Quibble tells the bank manager that she wants the money to invest in a pine plantation which would give the company substantial tax benefits. The bank manager thinks this is rather odd but makes no further enquiries and agrees to lend the money as long as it can take security over the company’s major asset which is the building from which ‘Two for Tea operates. Mrs Quibble actually intends to use the money to run away with one of her customers who she has fallen in love with. Mrs Quibble obtains the loan and mortgage documents from the bank. She affixes the common seal of Two for Tea Pty Ltd and forges her husband’s signature as secretary. The bank advances the money and Mrs Quibble absconds with it. REQUIRED: • Explain how a company can execute a contract under the Corporations Act (Cth). RELATED CASES...?
Explanation / Answer
How a contract can be executed under the act?
Under section 127 of the act, the company can execute a contract using a seal or without using a common seal.
In this case, the company can enter into a contract by fixing its seal, where its seal is witnessed by:
If no seal, then the contract can be executed if the documents are signed by:
A single person can’t execute the contract by fixing the seal or signing the documents by playing the role of both director & secretary unless the person is the sole director & secretary of the company.
Hence the fact of this case is that the bank should have provided the loan to Mrs. Quibble as the seal affixed by her was not witnessed by her husband, the director & secretary of the company one more thing is that Mr. Quibble can’t be both the director & secretary of the company as the compant run by them doesn’t look like a sole proprietorship.
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