BACKGROUND FACTS Rb bert. Clara. Johann and Teresa are extremely talented musicians. They decide to form a company to run a music teaching business. They decide to call the company JRCT Musical Pty Ltd and when they register the new company with ritSIIC1 they list themselves as the only directors and only shareholders. As the initial shareholders. they each receive one ordinary share. with each share entitling the holder to one vote in a general meeting of members. The company has a constitution but it only includes the following two articles: Artiote .'l'. - Subject to any nries and procedures set out in this constitution, the business of the company is to be managed by or under the direction of the directors. Artich- 2 - The company cannot enter into any contract that witt require the company to pay more than $5053 in anycaiend'ar year unless that transaction has been approved by ordinary resolution in a general' meeting of members. The constitution does not exclude the replaceable rules. The replaceable rules therefore apply to the company, with the exception of any replaceable rule that conflicts with an article in the company's constitution. At their first board meeting. the directors pass a resolution to appoint Teresa as Chief Executive Officer [CEO] of the company. \"effective immediately". They decide that they will prepare a formal written employment contract for Teresa at a later stage but in the meantime. they encourage her to start working as CEO. Teresa asks whether the board would be happy for her to order business cards for them all and whether it would be okay if her own business card indicates that she is CED. The others all agree to this. Ludwig works in a musical instruments warehouse and is a good friend of Teresa. Teresa tells Ludwig about her position at JBCT Musical F'ty Ltd and mentions that she feels like a very powerful business person even when she is not allowed to enter into any contracts over $5.Dl]t] on the company's behalf. Ludwig tells Teresa that he has been trying to sell a Baby Grand Piano and it would be a great acquisition for the music teaching company. Ludwig shows Teresa the Baby IGrand Piano and lets her play all sorts of music for one hour. Teresa agrees that the piano would be a great investment for the new company and the price of $1l].t] is an once-in aIifetime opportunity. She provides Ludwig with a copy of her newty printed business card indicating that she is the CEO of JHCT Musical Pty Ltd and Ludwig drafts a contract for the sale of the Baby Grand Piano. Bhe mentions that she will need to get approval at a general meeting of members of JRCT Musical Fly Ltd