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Identify how company can set up internal rules ? How contracts are discharged ? identify the case law. How company deals with contracts prior to the company registration,Discuss the doctrine of precedent,Powers of commonwealth, Discuss the defences available to director when they breach the corporation act.


Every Australian corporation should be governed by some regulations. They should select among having their own ―corporation constitution; utilizing the Corporations Act 2001 replaceable rules; or a mixture of both‖.

Replaceable Rules

The essential standards for internal administration of a corporation are incorporated into this Act as "replaceable rules". Section.141 of the Act‖ states the necessities of the Act that apply as "replaceable rules".

A corporation might take benefit of the "replaceable rules" in the Act‖ to administer its inner administration. it doesn't require to have a written "constitution‖" of its own. This implies corporations selecting to be administered by the replaceable principles won't acquire the cost of keeping up with the constitutions up to date with the law- even if the "replaceable rules" are revised.

Special rules for sole director/shareholder Proprietary Corporation

A proprietary corporation with a single shareholder who is likewise the sole executive has no requirement for a formal arrangement of regulations administering its inner connections - whether those regulations are the ―replaceable rules‖ in the Act, or generally specified in a ―constitution‖. Consequently, section.135 (1) of the Act gives that the ―replaceable rules‖ don't apply for such organizations.

Where the replaceable rules‖ don't apply by action of s.135 of the Act, it doesn't imply that sole director/shareholder proprietary organizations need to embrace a ―constitution‖ (despite the fact that they might do that if they want to). Such organizations just need regulations to permit them to carry out business and which manages possibilities.


A Company's Constitution oversees the corporation’s inner administration. A Constitution is a fundamental document that oversees the relationship of a corporation director and shareholders, and the actions of the corporation (Corporation Law(a), 2001).

Case Studies

2. Discharge of contracts

 Discharge by performance

Contracts are most regularly discharged by method for performance, by the parties, of their contractual obligations. 

Exceptions - There are a few special cases to the regulation that exact performance is necessary. The parties might likewise change this necessity - by expressly or implicitly giving that exact performance is not necessary. Deciding the important level of performance will, along these lines, rely on legitimate construction of the contract concerned.

Case – “In Sumpter v Hedges [1898] 1 QB 673”

Discharge by agreement

Parties are allowed to end their contract by agreement. This may take the type of termination procurement in the contract itself or through another and separate contract.

Discharge for breach

"Discharge of a breach of contract" could be either done by ―breach or anticipatory breach‖. The time when an agreement is set free via a "breach", for the most part implies that one of the party has either "expressly or impliedly" declined to execute out their part of the contract (findlaw.com.au, 2016)

Case – “Avery v Bowden (1855) 5 E&B 714.”

Discharge by frustration

In few cases a contract would be conveyed to an end on due to of a supervening occasion that is ahead of the ability to control of the parties. For instance, ―In Taylor v Caldwell (1863) 3 B and S 826)‖. (australiancontractlaw.com, 2010)




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