ACCOUNTING-The purpose of the assignment is to get you engaged in research into laws

QUESTION

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Assignment
BULAW2611 Organisations Law
Semester 1,
2012
The Business
School

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Purpose
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 May 2012.

Topic:

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:

(a) 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)

(b) 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)

ANSWER:

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