Word Length: 2400 words
Conciseness of expression is important in answering this assignment, so
please do not exceed the word limit! All sources (e.g. Ciro & Symes) must be
fully acknowledged in footnotes and a bibliography must be used. A failure to
adequately reference sources or to include a Bibliography amounts to
plagiarism and will result in a “Fail” grade for that assignment. Use the
“Business Law Style Guide” below. Harvard style referencing is not used
for law assignments. If you are unclear on how to reference your sources
adequately, seek assistance from your lecturer or the Student Counsellor at
the Central Learning Centre, Bank of America Tower, BEFORE handing
up the assignment. Further information on academic dishonesty and
plagiarism is set out above.
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1. Select your own group of 2 or 3 people (no more!)
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(including plagiarism declaration) and all cover sheets should be
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assignment
3. lodge ONE COPY ONLY of the assignment with 2 or 3 coversheets
(depending on the size of the group) attached IN FAMILY NAME
ALPHABETICAL ORDER
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you.
2
Note: If any issue arises concerning the possibility of a group assignment
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will be at the Co-ordinator’s discretion.
Assignment problem1
Note: all questions must be answered. Clearly number the answer to each
question in your assignment.
James and Lulu, two young businessmen, plan to form a proprietary limited
company to operate a restaurant. The company is to be called ‘Wonder Taste
Pty Ltd’ (‘Wonder Taste’).
Question 1: Explain to James and Lulu the procedure by which Wonder
Taste Pty Ltd can be ‘formed’ or set up and why it will be a ‘proprietary’
and ‘limited’ company?
On 22 February 2013, James entered into a contract with Good Beans Pty Ltd
to purchase 10 kilos of coffee beans. He executed the contract in the name of
‘Wonder Taste Pty Ltd’. On 24 February, the proposed company was
registered. The company did not adopt a constitution and had a common seal.
James and Lulu each took 50% of the issued capital, and both were appointed
as directors. Because of a dispute between James and Lulu regarding the
contract with Good Beans Pty Ltd, this contract was not ratified by Wonder
Taste until 30 March.
Question 2: By 30 April, the coffee beans supplied by Good Beans Pty Ltd
had been delivered to Wonder Taste but not paid for. Explain who may be
liable to pay for them and why.
On 2 May, James ordered a coffee machine from Power Pty Ltd (‘Power’).
James affixed the company seal and signed the contract twice in his own name
as a director.
Question 3: Explain what assumptions Power are entitled to make and
why?
1 This problem has been adapted from a problem at the end of Chapter 9 in Fitzpatrick, Symes,
Veljanovski and Parker, Business and Corporations Law (2009).
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Question 4: Explain whether (and if so, how) the assumptions Power are
entitled to make in the scenario in Question 3 would be different if Wonder
Taste did not have a company seal and James had signed the contract
twice, once in his own name and once in Lulu’s name?
Question 5: Explain whether (and if so, how) your advice would have been
different if Power had suspected something was wrong regarding James’s
signatures in the scenario in Question 4.
Following the Power matter, Lulu asks you about the replaceable rules in the
Corporations Act 2001 (Cth).
Question 6: Explain to Lulu what the replaceable rules are, why they are
written in the Corporations Act and what statutory effect they have?
