|Assignment BULAW2611 Organisations Law|
Semester 1, 2012
The Business School
The purpose of the assignment is to get you engaged in research into laws relating to company and partnership in Australia and to enable you to apply legal problem skills.
The Assignment is worth 30% of your total mark for the BULAW2611 course.
It is important for you to have time to think through how to structure and present arguments, and to review and discuss what the law is or should be in a particular area. Whilst discussion with others is encouraged, the final piece of work must be your own.Word Limit
2,300-2,500 in total (assignments exceeding the word limit may not be marked and may be returned to the student for re-writing; assignments less than the required length will risk not covering the topic adequately and may result in a fail). Do not include synopsis, references or bibliography in the word count.Note: All University of Ballarat rules relating to referencing, citation and acknowledgement must be complied with.Due Date
Please see your lecturer for submission arrangements. Assignment is due on Tuesday, 22nd
ABC Pty Ltd is situated in Australia. It has three directors: David, Sarah and Chen. David had signed a mortgage and guarantee in favour of Easyloan Bank Ltd on behalf of ABC Pty Ltd. The guarantee secured a personal loan made by Easyloan Bank Ltd to David. The mortgage was over ABC Pty Ltd’s land in Ballarat. Both documents were signed by David and appeared to have been signed by Sarah. However, David had forged Sarah’s signatures on the documents and Sarah was completely unaware of the transaction.
ABC Pty Ltd’s constitution provided that such loan agreements could only be executed if authorized by directors’ resolution. No such resolution had occurred, and indeed neither Sarah nor Chen knew about the mortgage and guarantee.
Easyloan Bank Ltd had not undertaken searches to determine whether David and Sarah were directors of ABC Pty Ltd prior to accepting the mortgage and guarantee as security and making the loan to David.
David has failed to repay the loan and has now left Australia. Easyloan Bank Ltd is attempting to enforce the guarantee and mortgage against ABC Pty Ltd.Required:
- Discuss whether Easyloan Bank Ltd can enforce the guarantee and mortgage (contracts) against ABC Pty Ltd. You should support your answer with reference to relevant sections of the Corporations Act 2001 and to relevant cases. (20 marks)
- Would your answer to question (a) above be different if ABC were the partnership firm of David, Sarah and Chen? Justify your answer. (10 marks)