Delegation of authority to agent by companys

Info icon This preview shows pages 4–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Delegation of authority to agent by Company’s directors to Committee of directors {s 198D(1)(a) Corporations Act} A director { s 198D(1)(b) Corporations Act} An employee of the company (s 198(1)(c) Corporations Act} Any other person {s 198D(1)(d) Corporations Act} Additionally the delegate must exercise the powers delegated in accordance with any directions of the directors { s 198D(2) Corporations Act} Express actual authority will usually be difficult to establish because the constitution will rarely deal with the conduct of individuals and does not address situations where only one director signs There is no express actual authority so it is appropriate to look at X’s position in Company to locate actual authority D.2 Implied Actual Authority If there is no express actual authority then implied actual authority may exist due to the Company’s acquiescence or by virtue of the agent’s position in the Company (1) Positions in the Company The following positions mean that the agent will be deemed to have authority to bind the Company as it is within the ordinary scope of their position o Managing Director/CEO o Some Employees: Generally only some senior employees Need to look at contract of employment Need to show either limited specialised responsibility or that they are a senior employee However it should be noted that some employees may have authority to enter into some contracts but may not have authority to enter into other contracts The chairperson, single director or secretary (as long as they are not employed by the company) DO NOT have authority to bind the company {ASIC v Rich} (2) Acquiescence A single director, chairperson or any other party do have implied actual authority if the Board is used to acquiescing to that person and has allowed them to control dealings – ie. De facto MD or CEO This includes situations where: o Persons (including majority or influential shareholders) act as the MD Commit Company to contracts without Board knowledge and then obtain approval afterwards {Hely-Hutchinson} o MD was appointed but no formalities were carried out o If a person is left to their own devices this may amount to acquiescence because the court will judge harshly were the Board is in active in their scrutiny {Pacific Carriers} D.3 Apparent Authority If someone is represented by the company as having certain authority and another relied upon that representation STS Corporations Law Hadi Mazloum: [email protected] 4
Image of page 4

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Corporate Authority then the company is e stopped from denying the certain authority {Freeman} This is on the basis of apparent authority at common law {Diplock LJ in Freeman} said “commonest form of representation by a principal creating an ‘apparent authority’ of an agent is by conduct, namely, by permitting the agent to act in the management or conduct of the principal’s business” {Diplock LJ in Freeman} also said that apparent authority was
Image of page 5
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern