Seminar questions Essay Example
According to the case, Jack can seek remedy to his situation and recover the money he lost through investing with the Grape Ltd. Considering that Anton, Belinda and Cathy are the directors of the Grape company who also signed the prospectors with an intention to inform and convince the investors, there and legal and ethical obligation that should be considered. Every director of a company is expected or required to be aware of his or her legal duties and obligations under the relevant legislation, Corporations Act 2001 (Act), general law, and the company’s constitution and shareholders agreement. Failure to comply with the expectations; whether intentionally or unaware; may result in instances of penalties and legal punishments. Through the breach of the obligations, Jack can seek remedy. Considering the Corporations Act 2001, s180, the director is expected to act in ways that protect the company as well as the investors, including the duty of care and diligence in s180(1). Therefore, by signing the prospectus that assures the potential investors of their returns, the three directors are liable for the damages or losses that their information has impacted on Jack and any other investor. However, Cathy withdrew her statement, demonstrating care and diligences towards the investors. Therefore, the liability for Jack and any other investors that lost their fund during the investment is held by Anton and Blinder. Jack can file legal claim against the company and its directors, but not Xavier or Cathy.
The case presents various instances of drivers that led to the agreement between the two parties to for a corporate company. Personal difference is one of the primary elements that led to exclusion of others in the attempt to join efforts and invest together; Bob was left out due to the allegations that depict personal differences with another member of the other party. Even though claims can be established that the negotiations were based on the mutual desire to expand business activities, there are areas that demonstrate breach of duty by Sacci and Anderson as far as the new director and the Corporations Act 2001 is concerned. Section 182 and 183 of the Corporations Act 2001 provide outlines concerning use of position and information respectively to gain personal interest. The sections argue that a director of a company should not use his or her position as a director and information about his or her company to venture into activities that only targets his or her personal gain and not the company. Even though Sacci and Anderson have supported Tonneti through the returns from Newvilla, it is the information they obtained from the company and the support of their positions as directors that led to their advancement in financial status. Therefore, it is a breach of duty.
The director of a company can execute a document concerning issues such as contracts on behalf of the company or other directors. The case presents the issue of enforceable contracts about the lease. Whilst trying to determine if the company and its other two directors are liable for the contract signed by the Kim and Jason, Corporations Act 2001 sets out a reference in section 127. The section addresses the issues that arise upon execution of company’s documents by an individual acting on express or implied authority. According to the section, the Act allows Jason and Kim to enter into a contract with another party on behalf of the company. Further, the Act allows a person to execute a company’s document without affixing the common seal of the company, which is valid if signed by two directors, a director and a company secretary or just a secretary in the case of a proprietary company as demonstrated in the Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd  SASCFC 103 (Cooper Grace Ward, n.p.). Therefore, considering that Jason was removed from his position, but not yet lodged with ASIC and Kim is a director, they are allowed by the Corporations Act 2001, sec127, to sign and entre into agreement on behalf of the company. The other two directors are liable for the contract and should finance it.
Corporations Act 2001
Cooper Grace Ward, “Has the company correctly signed the contract? Director’s personal liability for incorrectly signed contracts”, (2015): Web. Retrieved from http://www.cgw.com.au/publication/company-incorrectly-signed-contract/
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