A company can be bound to a contract

1) A company can be bound to a contract indirectly through the actions of an agent. What is the difference between actual authority and apparent authority?

2)What is the difference between the replaceable rules and a company constitution?

3)What are directors’ duties and who can take action if they are breached?

4)Yong sells an office furniture set to Restrada Pty Ltd for $17,000. At the time of the sale Restrada Pty Ltd was insolvent although Yong did not know or suspect this.


A liquidator is appointed to Restrada Pty Ltd and notifies Yong that he believes the $17,000 office furniture transaction is a voidable transaction. The liquidator intends to apply to the court to cancel the transaction and recover the $17,000 from Yong.

Advise Yong if the court will cancel his transaction with Restrada Pty Ltd and order him to repay the money. Use the IRAC method to structure your answer

5) Aline is a shareholder of Farnsworth Ltd. She is unhappy with the recent behavior of the board of directors. She believes the Farnsworth Ltd directors are breaching their duty to act with care, skill and diligence and their duty to avoid conflicts of interest. These breaches are costing Farnsworth Ltd significant financial losses.


Aline knows that the directors would never resolve to take action against themselves for breach of their director’s duties. She also knows that if the directors are not stopped from breaching their duties then Farnsworth Ltd will continue to suffer significant financial losses.


Aline wants to sue the directors of Farnsworth Ltd.


Advise Aline if she can sue the directors of Farnsworth Ltd for breaching their directors’ duties. Use the IRAC method to structure your answer

6)Marcela is a receiver. She is appointed by Tran, a secured creditor of Batfish Ltd, to exercise Tran’s security rights over a parcel of property owned by Batfish Ltd located in Adelaide.


Marcela acts on Tran’s instructions and takes possession of the property. She obtains an independent valuation of $2 million for the property. Before she begins a marketing campaign to sell the property she is approached by Xiao with an offer to purchase.


Xiao offers Marcela $2.1 million for the property.


Advise Marcela if she should sell the property to Xiao. Use the IRAC method to structure your answer.

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