PART A: Problem Question
Joseph, Leon and Melanie are running a café as a partnership. Whilst out shopping with his wife one Saturday, Leon sees a coffee grinding machine which he believes would be perfect for the business. He is unable to contact the other two partners on the phone but proceeds with buying the coffee grinder anyway.
1)Discuss whether the partnership is bound by the transaction that Leon entered into. Justify your answer.
2)The firm has two employees on a two-year employment contract. Due to a slowdown in business, the three partners decide that they need to fire their employees.
PART B: Essay
“After that… all that the directors do with reference to what I may call the indoor management of their own concern, is a thing known to them and known to them only..”
Critically analyse and contrast the common law and statutory indoor management rule with reference to appropriate sections of the Corporations Act (2001) and case law. Students should also look at the limitations and exceptions to the use of the indoor management rule.