Corporations Law – Institutional Affiliation | Assignment Help
Answer to question 2
Case issue
The bone of contention, in this case, is on whether George’s conduct of misrepresenting the company that has employed him, through offering terms that are not authorized by the firm can affect the validity of the contract. George has been authorized by Golden Gate Technologies (GGT) Ltd to market and sell the company’s products, software so he has some authority. One of the issues is deciding whether George has full authority on entering a contract on behalf of the contract. Whether his mistakes and ignorance can be taken to mean that GGT Ltd is reckless and liable for its employee’s mistakes. Another issue is on whether the email that Brendan sends to George accepting the offer is valid even though they have not signed the final contractual agreement. Brendan and his Colleagues have a feeling that the 15% discount offered by is too big and that it was possible that George did not have the authority to do so. Despite this, Brendan goes ahead to accept without confirming with GGT Ltd management. The issue here is to determine whether his knowledge and failure to communicate weaken Pool Woolworths Ltd case against GGT Ltd owing to its failure to honor the accept the contract.
Laws/Principles applied
There are several laws and principles in the Australian corporate law that govern contractual agreements. Section 124 of the Australian Corporation Act 2001 outlines the legal capacity of a company to enter into a contractual agreement. Under the law, a company is treated as a legal entity hence enjoy some privileges just like an actual person. Section 126 Corporation Act 2001on the other hand, has information on an agent’s capacity to act on behalf of a company to enter a contract. This section gives power to an agent to discharge a contract, whether through expressing or implying (Lipton et al., 2014). However, the agent has limited authority and can only act as per set boundaries. If an agent goes beyond his authority, a contract will not apply to the principal. There is also the Australian Consumer Law (ACL), which is defined in the Competition and Consumer Act 2010 (Lipton et al., 2014). According to ACL section 18 acts, it is illegal for an individual to be deceptive in a transaction. In our case, George’s case can be taken to be deceptive in which case t Brendan and his case can present this to the court.
The following are principles or rather aspects that have to be present for a contract to be legally abiding. One is that the offer being made by the first part to the other need to be precise. The second thing is that the party to whom the offer is being presented to have to accept. Another thing is that there has to be a consideration paid between the two parties (Yogaratnam et al., 2016). Consideration relates to price offered in the acceptance of the promise made. Fourth, there has to be evidence that both parties had full intention to enter into a contract. The terms of the agreement have to sure, parties involved need to be up to date on their rights and obligations for certainty clause to be fulfilled. The sixth element puts it that, all the parties involved must have the capacity to engage in the contractual agreement in question (Yogaratnam et al., 2016).
Law and principles Application to the case
George, as the salesperson is an agent of the Golden Gate Technologies having been contracted to sell software on behalf of the company. Being the salesperson, it is legally binding for him to enter into a contract on behalf of GGT Ltd. The problem comes about George decides to go against the specific stipulation of his employer. There are Company terms applying to his position as the salesperson, and he is well aware that he can only offer a discount, not exceeding 10%. It is possible to exceed this amount, but this can only be approved by the manager. George takes matters into his hands and offers a high discount of 15%. By doing this, he goes beyond his authority. According to Australian law, an agent should follow the directives of the principal. Otherwise, his action beyond such directives cannot affect the principal.
On the second issue, once George presents the offers Brendan, who also can act on behalf of his company; Pool Woolworths Ltd accepts the offer. He does so by writing an email expressing his acceptance. The intention to enter into a contract is evident as both parties have consent. Consideration is also at play, George is ready to sell the agreed software while Brendan, on the other hand, is ready to pay the agreed sum of money. Again both individuals can enter into a contractual agreement, being of a sound mind, and given the mandate to do so by their respective employer companies. With the above principles of a contract fulfilled, we can say that the contract is legally binding.
Conclusion
The failure of Brendan to confirm whether the offer by George is correct or not does affect the case. Again section 18 of ACL cannot help Pool Woolworths Ltd against GGT Ltd as George was not acting on deception. It is true that if he had confirmed with the management, first before accepting the offer, they could have straightened things up. However, the word of George as the salesperson is enough as it is supposed to be the voice of GGT Ltd, his offer is valid and should be accepted. The problem comes up to George’s misrepresentation of his company, offering what is not stipulated. The manager has every right to refuse the furtherance of the contract. GGT Ltd cannot be held liable for George’s ignorance.
References
ASIC website file:///C:/Users/user/Desktop/Starting%20a%20company%20%20%20ASIC%20-%20Australian%20Securities%20and%20Investments%20Commission.htm
Lipton, P., Herzberg, A., & Welsh, M. (2014). Understanding company law (Vol. 16). Thomson Reuters.
Yogaratnam, J., Xynas, L., & O’Connell, A. (2016). Corporations Law: In Principle.
