LST2LBA Law Of Business Association

Academic Anxiety?

Get an original paper within hours and nail the task

156 experts online

Free Samples

LST2LBA Law Of Business Association

.cms-body-content table{width:100%!important;} #subhidecontent{ position: relative;
overflow-x: auto;
width: 100%;}

LST2LBA Law Of Business Association

0 Download7 Pages / 1,505 Words

Course Code: LST2LBA
University: La Trobe University

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia


Question 1
William is bankrupt and therefore cannot act as a director of a company.  Nevertheless, he does so.  Harry is the managing director of the same company. Harry gives William a letter addressed to the other party to the contract saying that that William has authority to enter into a contract.  Harry, however, privately tells William that he is only to negotiate the contract, but is not to enter into it. Nevertheless, William signs the contract as agent of the company.  
a.Is the company bound by the Contract? Provide reasons for your answer.
b.Would it make any difference to your answer if Harry were only acting as managing director, never having been appointed to the position?
Question 2
Maria is one of two directors and shareholders of a company.   David is the other director and shareholder.  Maria wants to borrow $100,000 for both the company and for private purposes from a bank.  She borrows the money in her own name, but the bank wants a guarantee from the company.  She knows David will refuse to do so, so she signs the guarantee ‘Maria, director’ and writes ‘David, director’ in writing that is dissimilar to her own.  If Maria fails to meet payments under the loan agreement, can the bank enforce the guarantee against the company?
First, revise your understanding of how to answer problems.  This has been addressed in Tutorials and resources are available on the LMS to support you.  
Then, from your lecture notes, tutorial answers and textbook reading:
1.Make a list of the ways by which companies can make contracts.
2.Make a second list of the techniques the law uses to deal with issues arising in the making of contracts (e.g, fraud, forgery, acting outside authority, failures to appoint)
3.On your first list, indicate which techniques in the second list are used in what circumstances.
4.For each such circumstance, work out what procedure the law uses to resolve the issue. Some books provide  suggested procedures.
5.Check what you have found out by looking what some different textbooks say.  Check that you have correctly understood sections in the Act and whatever cases might be relevant.
6.Read one of the questions and work out the story (what happens).  
7.Choose which way of making a contract is involved.
8.Determine what issues in that way of making a contract are raised in the question.  
9.Use the procedure you have worked out for that issue to indicate how a Court might resolve the problem.
10.Write a response to the question using your procedure.
11.Go back over the answer and check you have all the elements of a good answer: a defined issue, a statement of the relevant law, an application of the law to the facts and a conclusion assessing what a Court might do.
12.Repeat steps 5-10 for the next question.
13.Check expression, citation etc.  Ensure there is nothing in your answer that would be considered plagiarism.
14.Proof read your response, comply with all formalities (Cover Page has required details, Statement of Authorship is attached, Extension form is attached if necessary) and hand in the assignment according to the Instructions.


This is the case study which discusses about a contract which is to enter by a company with a third party. After understanding this case study one can easily understand the different types of contract and how to deal in case of such contracts. To come to a conclusion for this case one needs to understand the provisions relating to contracts entered in Australia.
A contract can be anything, whether in a written or an oral form. It can also be made by just a handshake or even with the help of a written document. There are generally four types of contract which are discussed below:

Written Contract: a written contract is a contract where an agreement is entered between both the parties in writing. All the details are clearly set out in the agreement. It generally minimizes risks as it is much safer than a word given by someone.
Verbal Contract: a verbal contract is a contract where agreement is agreed between both the parties orally. High risk is involved in such contracts since everything is in oral. A person, who has promised to agree with a point, can even deny the point later whenever he wishes to do so.
Standard Form Contract: it is a pre-paid contract where most of the terms are set in advance and either there is a little or no conversation between the parties involved. These are generally filled with few blank spaces with information such as dates, signatures and names.
Period Contract: it is a contract template which sets out the terms for a business relationship where the contractor is mainly engaged to perform from time to time.

There are various issues which can arise while entering into a contract. The issues which can arise in a contract are discussed below:

Fraud: if a contract is entered between two parties then there are chances that one party can commit fraud in a contract. If a party commits any fraud then a contract entered would be considered as void. Hence contract would not exist anymore. This is mentioned Part 4AA of Crimes Amendment Act 2009.
Forgery: there are chances that anyone of the party forges any point of the contract. Even in such cases the contract entered between two parties would be considered as void.
Acting Outside Authority: if anyone of the party entered in the contract is acting outside his authority then contract can be considered as voidable at the option of the concerned affected party.
Failures to appoint: if a party fails to appoint as per the terms of the contract, even in such cases contract has to be void. Hence contract would not exist.

In the given case William was a director of a company but now he is a bankrupt. But the problem is that even after knowing this he was acting as a director of that company. Harry, who was a director of the company, gives a letter to William to enter into a contract with the other party. William signs the contract as the agent of the company. Whenever a director becomes bankrupt then it has no rights to become the director of the company and he should first pay all the debts of creditors. But instead of this he entered into a contract with another party as an agent of the company. This is a clear case of a fraud. Hence, the contract has to be considered as void since fraud was committed by the director of the company.
In this case whether Harry is acting as a Managing Director or he is really a managing director doesn’t make any difference. Harry wen to William to just negotiate the contract but instead William has signed the contract as an agent of the company. It was a complete fault of William; he should not enter a contract since he was bankrupt. Now from where he would pay money to the creditors of the company. He should not have signed the contract. Hence even in this case it is the fault of William and the contract has to be considered as void.
Issue: This is the case study which would help to understand the provisions of loan agreement which is entered into a contract. There is a company which is having two directors and shareholders. One of the directors is Maria and other director is David. Both of them are directors and shareholders of the company. In this case Maria who is a director and shareholder of the company wants to borrow $100,000 for professional and personal purpose from a bank. Bank granted loan to Maria but guarantee has to be given by the company. Maria knew that David would not agree with this loan agreement and hence she would not get any loan from the bank. To get loan from the bank she took the loan on her name and have also signed on David’s behalf as well. Now the question is if Maria fails to make the payment under the loan agreement then company would be held responsible or not. To answer the case study we need to understand the provisions of default made by any director of the company.
Rule: as per Australian Corporation Act 2001, if a director breaches any of its duties then he has to bear the consequences. Once the company is registered under ASIC, rights and liabilities of the director will continue unless ASIC deregisters the company. All the rights and liabilities would lie with the director itself. If company has become bankrupt and unable to pay off its liabilities, then directors would be held responsible to pay off all the liabilities of the company. Obligations of a director may continue even after the company ceased trading and has been deregistered.  There would be certain circumstances where director would be held personally liable for the debts and losses of the company. If company is unable to pay off its debts and liabilities then directors has to personally pay all the debts. If a director has committed a default then action has to be taken against that director. But due to fault of one of the director, their party should not suffer. For instance if a contract is entered by a director with any third party, and the contract is not valid then action has to be taken against the director. But in no instance the third party should suffer because of the default committed by one of the directors of the company.
Application: in the current scenario above mentioned provisions would be applied. Maria was at default here since she had entered into a loan agreement with a third party on fraud basis. She had forged signatory of David. As per the laws and provisions of Australian Constitution Act 2001, the loan agreement should not be considered. Bank has the full right to take action against the company. Even the company was not at fault, only one of the directors of the company was at fault. This is the issue within the company, which has to solve within. Due to such issues the third party should not suffer at all. Bank has the right to take action against the company. After paying all the dues company can take action against Maria who was at fault. If Maria is unable to pay the dues then David has to pay off its liabilities. This is given as per the provisions of the Australian Corporations Act, 2001. Directors would be held personally liable in following situations:

If the company has become insolvent then all the debts has to be paid by the directors of the company.
Company has to suffer losses due to the breach of the duties by the director.
If the director has given any personal guarantee or have provided any personal security.
Debts were incurred by the company by acting as a trustee.
If there is any illegal phoenix activity.
If any action taken against the director of the company.

As per the provisions mentioned above and understanding the case study, bank can take legal action against the company. Then finally company can take legal action against one of the director named as Maria.
Consequences For Breaching Directors Duties – Legalvision (2017) LegalVision .
Directors’ Liabilities When Things Go Wrong | ASIC – Australian Securities And Investments Commission (2017) Asic.gov.au .
Types Of Contracts (2017) Business.gov.au .

Free Membership to World’s Largest Sample Bank

To View this & another 50000+ free samples. Please put
your valid email id.


Yes, alert me for offers and important updates


Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

UploadUnique Document

DocumentUnder Evaluation

Get Moneyinto Your Wallet

Total 7 pages


*The content must not be available online or in our existing Database to qualify as

Cite This Work
To export a reference to this article please select a referencing stye below:


My Assignment Help. (2021). Law Of Business Association. Retrieved from https://myassignmenthelp.com/free-samples/lst2lba-law-of-business-association/australian-securities-and-investments.html.

“Law Of Business Association.” My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/lst2lba-law-of-business-association/australian-securities-and-investments.html.

My Assignment Help (2021) Law Of Business Association [Online]. Available from: https://myassignmenthelp.com/free-samples/lst2lba-law-of-business-association/australian-securities-and-investments.html[Accessed 18 December 2021].

My Assignment Help. ‘Law Of Business Association’ (My Assignment Help, 2021) accessed 18 December 2021.

My Assignment Help. Law Of Business Association [Internet]. My Assignment Help. 2021 [cited 18 December 2021]. Available from: https://myassignmenthelp.com/free-samples/lst2lba-law-of-business-association/australian-securities-and-investments.html.

.close{position: absolute;right: 5px;z-index: 999;opacity: 1;color: #ff8b00;}


Thank you for your interest
The respective sample has been mail to your register email id


$20 Credited
successfully in your wallet.
* $5 to be used on order value more than $50. Valid for
only 1

Account created successfully!
We have sent login details on your registered email.



We offer reliable academic writing service for all forms of assignments at MyAssignmenthelp.com. From dissertations to college essays, you will find all sorts of help all under one roof. Many students get confused with the right research paper outline and end up delivering an improper document. Our experts, on the other hand, are well-versed with the right guidelines for your assignments. Thus, do not hesitate to type ‘write my paper’ on our live chat portal. Let us know about your order requirements and we will send you the customised price quote instantly. Gear up for an A+ with our services.

Latest Management Samples

div#loaddata .card img {max-width: 100%;

MPM755 Building Success In Commerce
Download :
0 | Pages :

Course Code: MPM755
University: Deakin University

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

The process of developing a successful business entity requires a multidimensional analysis of several factors that relate to the internal and external environment in commerce. The areas covered in this current unit are essential in transforming the business perspective regarding the key commerce factors such as ethics, technology, culture, entrepreneurship, leadership, culture, and globalization (Nzelibe, 1996; Barza, 2…

SNM660 Evidence Based Practice
Download :
0 | Pages :

Course Code: SNM660
University: The University Of Sheffield

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: United Kingdom

Critical reflection on the objective, design, methodology and outcome of the research undertaken Assessment-I
Smoking and tobacco addiction is one of the few among the most basic general restorative issues, particularly to developed nations such as the UK. It has been represented that among all risk segments smoking is the fourth driving purpose behind infections and other several ailments like asthma, breathing and problems in the l…
Australia Maidstone Management Business management with marketing University of New South Wales Masters in Business Administration 

BSBHRM513 Manage Workforce Planning
Download :
0 | Pages :

Course Code: BSBHRM513
University: Tafe NSW

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Task 1
1.0 Data on staff turnover and demographics
That includes the staffing information of JKL industries for the fiscal year of 2014-15, it can be said that the company is having problems related to employee turnover. For the role of Senior Manager in Sydney, the organization needs 4 managers; however, one manager is exiting. It will make one empty position which might hurt the decision making process. On the other hand, In Brisba…

MKT2031 Issues In Small Business And Entrepreneurship
Download :
0 | Pages :

Course Code: MKT2031
University: University Of Northampton

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: United Kingdom

Entrepreneurial ventures
Entrepreneurship is the capacity and willingness to develop, manage, and put in order operations of any business venture with an intention to make profits despite the risks that may be involved in such venture. Small and large businesses have a vital role to play in the overall performance of the economy. It is, therefore, necessary to consider the difference between entrepreneurial ventures, individual, and c…
Turkey Istanbul Management University of Employee Masters in Business Administration 

MN506 System Management
Download :
0 | Pages :

Course Code: MN506
University: Melbourne Institute Of Technology

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

An operating system (OS) is defined as a system software that is installed in the systems for the management of the hardware along with the other software resources. Every computer system and mobile device requires an operating system for functioning and execution of operations. There is a great use of mobile devices such as tablets and Smartphones that has increased. One of the widely used and implemented operating syste…
Australia Cheltenham Computer Science Litigation and Dispute Management University of New South Wales Information Technology 


Need an essay written specifically to meet your requirements?

Choose skilled experts on your subject and get an original paper within your deadline

156 experts online

Your time is important. Let us write you an essay from scratch

Tips and Tricks from our Blog

11174 Introduction To Management

Free Samples 11174 Introduction To Management .cms-body-content table{width:100%!important;} #subhidecontent{ position: relative; overflow-x: auto; width: 100%;} 11174 Introduction

Read More »