This is a company law subject:

AN IMPORTANT NOTE: You should refer to relevant sections in legislations and case law when answering the following questions.

Question 4

a) Discuss the put on inquiry test at common law that applies to a third party when they enter into a contract with a company. How is it different from the approach adopted under the statutory protection rule provided under s 128(4) of the Corporations Act 2001 (Cth) for third parties?

b) Explain whether Mortdale Bank can rely on the statutory assumptions when entering into a loan contract with one of its longstanding clients, La Bamba Pty Ltd when the signatures of La Bamba Pty Ltds directors are forged. Whose responsibility it is to prove that the assumptions should not apply?