Ansons Law of Contract

Describe about the Ansons Law of Contract?

Answer:

According to the law of agency, if an agent acts on behalf of the principal in emergency situations where the principal’s approval cannot be obtained using reasonable means, he cannot be held liable for the acts done in pursuance of his powers as an agent of the principal (McMeel, 2000).  This clearly indicates that an agent works on behalf of the principle and is not liable for the acts of the owner.

The agent cannot be held liable.

The contention of Alex Riley in this case, holds good.  The company has violated title VII as its policy excludes all felony convictions. Its justification that, there will be a necessity to handle a lot of cash is not sound and cannot be accepted. According to EEOC, it wouldn’t matter if he was convicted of murder. The case still would favour Alex Riley.

In the case given cases, Elkridge an employee and tenant of the building that the corporation acquired from Siebrecht   by paying consideration of 10000 worth of stock, fell down a flight of stairs that was defective. She sues Siebrecht on the premise that he had used the corporation as a tool to escape personal liability.

Elenkrieg’s contention does not hold good, in this case. Even though, there is the effect of escaping personal liability, there needs to be an intention to defraud by the incorporation of the company and hence, Siebrecht can’t be held liable in this case.

In this case, the accountant’s contention that, he was not in privity of contract with him, does not hold good. Thayer, the manager of Montana Merchandising, Inc. , hired the services of Bloomgren, an accountant. Bloomgren was entrusted with the job of auditing the accounts of Intermountain merchandising, whose business Montana Inc was considering to purchase. Relying on the audit report of the accountant, which showed the business to be profitable, Thayer went ahead with the purchase.  Later, when facts relating to the mistakes made in the audit by the accountant came into lights the business was, in fact, insolvent, the accountant was sued.

A derivate suit is a result of escalating mistrust between the management and the shareholders. There is a very real possibility that the management, being in position of trust and enjoying the benefits of incorporation might mismanage corporation’s funds. A derivate suit lets the shareholders question such behaviour (Choper et. al, 2009).

References

Choper, JH,   Coffee, JC and Gilson, R. J (2009). Cases and Materials on Corporations (7th ed. Aspen )

McMeel, G (2000) Philosophical Foundations of the Law of Agency (3^rd ed. Oxford Press)