What legal liability might all the Directors have? Identify and explain the circumstances.

What legal liability might all the Directors have? Identify and explain the circumstances..

 

Mabel is a Director and Shareholder of a Propriety Company named, ‘Mabel’s Anime Nation Pty Ltd’ (‘the Company’). There are other shareholders of the Company including some private investors.

Recently at a Director’s meeting, all the Directors decided that the Company would host an Anime Convention. At the same meeting, the Directors (including Mabel) were provided with a list of catering contractor prices and information about the quality ranking 5 different food caterer services. At the meeting, Mabel takes charge and advised the other Directors that ‘Fred’s Catering’ is the preferred candidate. Yet, a close reading of the contactor prices/quality document would have shown that ‘Fred’s catering’ was rated third. It also just so happens that Mabel owns a majority interest in ‘Fred’s catering’. She does not tell her fellow Directors.

When the agreed contract price for ‘Fred’s catering’ goes before the Director’s for approval none of the Director’s question the amount of $300,000. The quotation document is wrong and overpriced as it includes food for 3000 people yet only 1000 tickets are to be sold.

Due to the mismanagement of this event the company is now in debt. Creditors are looking to be paid. Shareholders are angry about some of the Director’s decisions.

Address the following questions:

What legal liability might all the Directors have? Identify and explain the circumstances. Use case law and legislation where you can to justify your answer).

What legal liability might Mabel have beyond the other Directors? Identify and explain the circumstances. Use case law and legislation to justify your answer.

Week 4 Causing Harm 850 words 15 marks

The Company (Mabel’s Anime Nation Pty Ltd) arranges to have some of their employee’s (who normally work in the office) to build a stage for the Convention, premises that they are both owners and occupiers. Phoebe attends the Convention and wins a prize for best costume. As she runs up to the stage all her friends join her on the stage. The stage is overloaded, they all jump up and down with excitement then, the stage collapses. Phoebe is horribly injured and cannot go to work for 6 months.

Phoebe wants to know if she can claim for her loss. Identify and explain the circumstances that support her case (and any that do not). Use case law to justify your answer.

Week 5 Contract Formation 300 words 10 marks

A list of Anime ‘merchandise’ was advertised earlier, on various formats, for $100.00. This included ‘violet evergarden’ dolls for $100.00. Jill sees the advertisement on the internet the day before the Convention. It just so happens that the ‘violet evergarden’ doll factory had just burnt down in Japan, making these dolls much more valuable (they were now worth $10,000)! In a couple of places at the Convention, the sign advertising the dolls for $100.00 have not been taken down. Jill, a convention attendee, claims that she is entitled to buy the doll at the ‘advertised’ price of $100.

The seller refuses.

Is Jill correct, can she purchase the doll for $100.00? Explain the law using case law.

 

 

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What legal liability might all the Directors have? Identify and explain the circumstances.

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