Al Bundy had a profitable shoe store Al's Shoes.He arranged for a new company calledShoemart Pty Ltd ("Shoemart") to be set up to purchase his business and the building which it occupied.

On 3^rd May 2021, Shoemart was incorporated and its constitution is a combination of all the replaceable rules and the following provisions:

"Clause 1

The sole object of the company is to carry on the manufacture and sale of shoes.

Clause 2

Peggy Bundy shall remain as a Managing Director for so long as she desires.

Clause 3

Al Bundy shall be employed as a Shoe Consultant until 2025 at a salary of $40,000 per annum."

The company issued 10 shares each to Peggy and Bud (Al's sister and brother) and 80 shares to Kelly (Al's daughter). Peggy and Bud were appointed as directors with Peggy as Managing Director.

On 5^th May2021, Shoemart entered into a contract with Al to purchase the shoe business and the building for $500,000.The business and building were independently valued in February 2021 for $350,000.

Q(i) On 2^nd April 2021, Peggy was asked by Al to sign a contract with Tang Department Store for a special order of shoes to be delivered by 1 August.She signed a contract "for and on behalf of Shoemart Pty Ltd". It is now September and there still has not been any delivery.Peggy is worried that Tang will sue her for breach of the contract she signed

Q(ii) Kelly found out that in June, Shoemart delivered shoes worth $10,000 to Metro Stores with payment to be made in August. Unfortunately, Metro went into liquidation in July. Upon looking further into the transaction, she found that Bud was asked by Peggy to be in charge of negotiating and entering into the contract. Bud agreed to allow Metro to pay in August, without checking Metro's creditworthiness. If he had, he would have found out that there was a winding-up petition on the ground of insolvency against Metro dated 20 May. Advise Peggy and Bud on Shoemart's chances of success against them under s180 of the Corporations Act.