Advise executive car fleets ltd will succeed in legal action

Assignment Help Business Law and Ethics
Reference no: EM131201763

This assignment requires you to answer two problem-type questions using the ILAC (Issues, Law, Application, and Conclusion) format.

Question 1-

Executive Car Fleets Ltd sells cars. It employs Dan Richardson as its Vehicle Sales Manager. One of the major customers of Executive Car Fleets is Speedy Auto Hire Ltd. Richardson has often signed contracts on behalf of Executive Car Fleets Ltd with Mark Fraser. Vehicle Purchasing Manager of Speedy Auto Hire Ltd. Richardson has been negotiating with Fraser to sell 30 Mercedes Benz 450SE sedens to Speedy Auto Hire Ltd.

One Thursday at about 9.00 am Richardson sends an email to Fraser which says "My supervisor has approved the price of $ 50 000 per car. Come to my office at 4 pm this afternoon to sign the contract." At 1.30 pm, Richardson sees Mary Jones, a University friend of his, who now works at Speedy Auto Hire Ltd as its Company Secretary. She says 'I have had such a tense morning. Mark was in tears - apparently our Managing Director has asked to see him because of his bad performance this year - I think he will be fired".

Back at his office, Richardson tells Johnson. Chief Financial Officer of Executive Car Fleets Ltd. about the conversation he (Richardson) had with Mary Jones., saying "I really think there is a problem here; I think Fraser may have been fired". Johnson gets angry and says "Look, we're getting a good deal; don't worry about what is going on at Speedy Auto Hire".

At 4 pm Fraser arrives at Richardson's office and signs the deal to buy the vehicles for a total price of $ 1 500 000. The next morning he gets a phone call from the Managing Director of Speedy Auto Hire Ltd who says 'We aren't buying those cars you were negotiating with Fraser about'. When Richardson tells him that Fraser had signed the contract at 4 pm the day before, the MD of Speedy Auto Hire responds 'Tough luck, we fired him at 2 pm yesterday, so he did not have authority to buy the cars". Assume that all the above facts come out in evidence in court.

Advise whether Executive Car Fleets Ltd will succeed in a legal action to enforce the contract citing statutory and case law authority.

Question 2 -

Peter Jones runs a stationery business. He is also a 5% shareholder in a separate business, Sparkles Ltd, which is a company that makes and sells custom jewellery. The constitution of Sparkles Ltd says that Peter will be given a 3-year contract to supply stationery to Sparkles Ltd. He has heard that the company has decided to source all its stationery requirements from Office Pax Ltd.

Peter has also learned that Roger Rogerson, one of the directors and CEO of Sparkles Ltd, who also owns 65% of the shares in the company, entered into a contract on behalf of the company under which the company sold a rare sapphire to his nephew for $ 5 000, whereas in fact the stone is worth $ 100 000. Peter has also learned that Rogerson is about to sell a ruby worth $ 40 000 to his (Rogerson's) niece for $ 8 000, but has not yet done so.

Peter wrote a letter to the board complaining about the company's decision to source stationery from Office Pax Ltd and about the two deals. The Company Secretary wrote back saying that the Board was firm in its decision not to source stationery from Peter and that it would be taking no action against Roger in relation to his dealings with his nephew and niece.

Advise Peter on what he should do, citing relevant law. For the purposes of this question you may assume and therefore do not needs to demonstrate that selling an asset at gross undervalue amounts to a breach of directors' duties contained in s 180(1) and s 181 of the Corporations Act 2001 (Cth).

Rationale- This assessment item will allow you to demonstrate competence in relation to the following learning outcomes:

  • Your ability to identify the different types of business organisation and the sources of the law regulating them.
  • Your ability to identify and explain the rules of law regulating the internal relationship between the participants of each organisation and between the organisation and third parties.
  • Your ability to use legal research skills to apply the law to legal problems.

And more specifically:

  • Your knowledge of the law relating to company agents.
  • Your knowledge of the law relating to company constitutions and members' remedies.
  • Your ability to complete an assessment task which is relevant to professional practice and the giving of advice in the workplace.

Words: 2250

No of reference: 7 APA.

Verified Expert

There are two cases in this assignment. In case 1, the issue is that Richardson, Vehicle Sales Manager of Executive Car fleets comes in contract with Faser, Purchasing manager of Speedy Auto Hire ltd, but he was fired by the comapny at the time of signing the contract and now the later company is denying to pay for the cars purchasing made by Richardson. In Case 2 peter is minor share holder with 5% share only in sparkles limited. They came in contract to get stationary from him for 3 years prior. Now they are getting it from Office Pax ltd and also he came to know that Richard is planning to sell Sapphire worth $10,000 to his nephew for $5,000 and ruby worth $ 40,000 to his niece for $8,000 only. He want advice to take action.

Reference no: EM131201763

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9/17/2016 7:45:52 AM

You must end your assignment with a bibliography that is divided into three separate parts, listing statutes, cases and books / articles / on-line Modules.


9/17/2016 7:45:47 AM

This assignment must be answered using the ILAC (Issues, Law, Application, and Conclusion) format. Use in-text referencing. Do not use footnotes. Names of statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901 (Cth). Note the abbreviation for ‘Commonwealth’ is ‘Cth’ not ‘Cwlth’. The names of the parties must be italicised, but the citation must not, for example: Smith v Jones (1967) 345 CLR 34. An in-text reference to a book should be structured as follows: (Latimer, 2010, p. 75). There is no need to put the author’s initial. Note the positioning of brackets, stops and commas. You use ‘pp.’ only if referring to more than one page. If you are referring to a book with more than one author, the in-text reference would be as follows: (Smith et al, 2002, p. 78). An in-text reference to the subject's Modules should be structured in brackets as per the following example - obviously you will alter the reference depending on the subject, year of study and Module number : (CSU LAW220 Modules, 2015, Topic 7).


9/10/2016 7:13:01 AM

Please note that the word limit of 2250 words is a total for both questions including references and bibliography. I would however expect that students should be able to answer the questions in far less than 2500 words. "In this assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format. NOT as a PDF document. If you submit in PDF it will not be able to be marked.

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