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Contracting Commercial And Corporation Law Assessment Answer



An entrenchment clause of the constitution or necessary legislation describes a provision that potentially makes some amendments either impossible or harder. That is to say that such amendments become inadmissible. This provision makes such an amendment to need a supermajority, another party’s consent or a referendum to be submitted to the citizens (Shamgar 2014). An entrenched provision with a pure intention to prevent following amendments: shall, upon its adoption and given that it is drafted correctly, make certain parts of the constitution or basic law irrevocable with an exemption via the right of revolution assertion. Any basic law or constitutional amendment that would not meet the prerequisites outlined in a valid entrenched provision would culminate in the so-called “unconstitutional constitutional legislation”. That is to say a change to the constitutional law text that would seem to be constitutional solely based on its form, albeit being unconstitutional as regards to the procedure of its enactment, or as to the material content of its given provisions.

There is a justification for entrenched clauses even in the company’s constitution as needed by David in this case. This is because such a provision appears to be useful for the protection of the minority right from some dangers inflicted to them by majoritarianism as well as other cases. In this case, the entrenched provision primary goal or objective will be to bar the amendments to the constitution or basic law that would serve as a protection of such rights. It will prohibit the changes that would otherwise pervert fundamental rights and principles outlined in the constitution. This will notably bar the establishment of any legalistic dictatorship in the organization. Even though the opponents to the entrenched provision seem to oppose it as being undemocratic, this provision needs to be included in the constitution as demanded by David for the prosperity of the organization.    

As seen in the composition of workforce of David’s company which is dealing in car parts business (racing parts), a great percentage features David’s relatives. This will be disastrous should the company’s constitution lack the entrenched clause. This is because they are the majority and hence may always amend the company’s constitution in their favor, and, hence oppression to other minority staffs. For example, the company has David, his wife, his daughter, and his mother who can easily gang up against the other employees to change the constitution. This clause will, therefore, protect David because it will make it hard for any given lot to amend the constitution and come up with clauses that may work against his business goals and objectives.


Type of Authority in Michelle Case

This case is based on apparent authority. This is that authority which comes where a person logically deduct that a person enjoys the authority to act on behalf of the company or another person to undertake business as well as enter into contracts. This belief originates from the actions of the person culminating in the conviction that they have been accorded the authority to act. Nevertheless, not all undertakings performed under apparent authority are binding legally.

Section 126 of the Corporation Act 2001 gives provision on how agent should exercise the authority of the company to make contracts. In this case, Michele is an agent acting on the behalf of Racing Parts Company. This section, in part one, gives the company power to make, vary, ratify as well as discharge contracts. It explains that such a power can be exercised by a person acting on behalf of the company with the implied or express authority of the company. In this section (part one), such a power can be exercised even in the absence of a common seal. In this case, therefore, Michelle rightfully acted on behalf of the company. However, part ii of section 126 provides that part (i), cannot affect the operation of the law which outlines a given procedure to be adhered to with respect to contact.   In this case, Tom is the office manager dealing with the logistics staff matters, office procedure as well as administration. Michelle helps in Tom’s office, and hence when she is instructed by Tom, who is also the office manager, to order stationery (office items), from Officeworks where the Company owns a credit card, her actions will amount to a belief that she has been accorded the authority by Tom to act on behalf of both Tom and Company (Whelan and Dunigan 2006). In which case, the Officeworks will have all the reasons to believe Michele was enjoying the authority to act on behalf of Tom or the company to do business or enter into the contract with her. This informs the deduction by the Officeworks to issue Michele with the items she had ordered worth   $1,200 of stationery plus an iPad. 

Even though it is unfortunate that the company has refused to pay for the things, in my view, I think they are bound to pay the Officeworks. I recognize the fact that not all contracts undertaken under the apparent authorities are binding legally. However, I acknowledge that a good number are binding and hence this should make it to that list. I recognize that Michele lacked that real authority to order the items, however, her position in Tom’s office gives her the apparent authority to enter into this contract or business with the Officeworks (McIntire, 2010).

Despite the fact that it is unclear that the company authorized her to enter into the contract, the evidences point towards the fact that Tom had given her this authority. In this case, I strongly feel that Officeworks would be entitled to this sum ($12000). This is because the Officeworks reasonably assumed that Michele had the authority to enter into such contract or do business. The Racing Parts Company must, therefore, honor the oral agreement entered into between Michele and Officeworks.



McIntire, J.A., 2010. Authority of Government Contracting Officers: Estoppel and Apparent Authority. Geo. Wash. L. Rev., 25, p.162.

Shamgar, M., 2014. Judicial Review of Knesset Decisions by the High Court of Justice. Israel Law Review, 28(01), pp.43-56.

Whelan, J.W. and Dunigan, T.L., 2006. Government Contracts: Apparent Authority and Estoppel. Geo. LJ, 55, p.830.


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