Company Law – Murdoch- Sarah, Michael and Jenny are directors of Events R Us Ltd, a company that engages in events organisation, Singapore

Company Law – Murdoch

Sarah, Michael and Jenny are directors of Events R Us Ltd, a company that engages in events organisation. Sarah is the Managing Director, Michael is the Information Technology director and Jenny is the Finance Director. The company has a constitution with an objects clause that states that the company organises events in Western Australia only and another clause that states that board approval is required for any transactions over $40,000.

Michael travels to Sydney to attend an events expo. At the expo Michael is excited to be introduced to a new events organisation computer program that would save time, money and deliver a more professional service than the company’s competitors. Michael enters into a contract to purchase the program for $50,000 from Ultimate Computer Programs.

Jenny also travelled to the expo and whilst there she met the Mayor of Sydney. Jenny then entered into a contract for Events R Us Ltd to be the major organiser for next year’s City of Sydney “Fashion Week”.

Upon receipt of the computer program invoice, Sarah writes to Ultimate Computer Programs advising that the company will not pay for the computer program as the software is incompatible with the company’s current system. Sarah also advises that Michael did not have the authority to enter into the contract and that he exceeded the company’s spending limit.

When Jenny advises Sarah about the Fashion Week event, Sarah writes to the Mayor of the City of Sydney and advises him that the company will not be organising “Fashion Week”. Sarah advises the Mayor that Jenny had no authority to enter into such an agreement and in any event, the company has no legal capacity to enter into such a contract.

REQUIRED

Based on the above facts, discuss whether Ultimate Computer Programs and the City of Sydney can enforce the contracts against Events R Us Ltd.