Contract Law Regatta Pty Ltd.

Question: Discuss bout the Contract Law for Regatta Pty Ltd. Answer: Issue: Regatta Pty Ltd is a large groceries share. The Board of company comprises of Tom Jones and other executive and non-executive directors who were hardly part of any meeting. Tom holds 10 percent of the share, while the remaining directors hold 15% of the shares. In one of the recent board meetings, Tom, Peta and Roman have not been agreeing as to whether the company should expand beyond the groceries business into the electronics business as well. Tom is confident that this would benefit the company. Tom held many meetings with the Board of Directors in which Peta and Roman were not part. Based on the facts, the issue that arises here is, what is the legal position of each of the parties to the case. Legislations: The Corporations Act, 2001, has provided many remedies for those minority shareholders who are oppressed. This case study invokes the provision related to securing the position of the minority shareholder (Cartwright 2014). The rights of minority shareholders can be violated if the directors have not complied with their duties under section 181 and 182 of the Corporation Act, 2001. This is enumerated in Section 232 of the Corporation Act, 2001. The directors are under a statutory duty to exercise their rights in good faith and in the best interests of the company. Shareholders often have different interests and there are times wherein there is a conflict between the shareholders and the directors. Oppression takes place with the minority shareholders where they are subjected to the unfair and prejudice use of the power of the majority shareholder (Cartwright 2014. According to section 233 of the Corporations Act, 2001 the Court has the discretion to grant a number of remedies to the minority shareholder. The Court may pass an order to the shareholder to purchase the shareholders at a price that is determined by the Court (Poole 2014). The Court may also ask the majority shareholder to comply with the decision of the minority shareholder if the Court thinks that the decision of the minority shareholder is for the welfare of the company (Schwenzer, Hachem and Kee 2012). Application: In the given case scenario, the rights of Tom can be protected by applying section 232 of the Corporations Act, 2001. Since he is a minority shareholder, the majority shareholders might over turn his decision. Toms decision is for the welfare of the company. Hence, his rights and powers may be protected by applying section 232 of the Act. By passing special resolution, the decision of the majority shareholder may get overturned and Toms decision may over rule the decision of the other directors. Conclusion: Conclusively, it may be held that the decision of Tom can prevail over the decision of the majority shareholders as it is for the welfare of the company. As such, the company shall have more prospects to enhance their business structure and this will ensure the organizational success of the company. References: Cartwright, J., 2014.Contract law: An introduction to the English law of contract for the civil lawyer. AC Black. McKendrick, E., 2014.Contract law: text, cases, and materials. Oxford University Press (UK). Poole, J., 2014.Textbook on contract law. Oxford University Press, USA. Schwenzer, I., Hachem, P. and Kee, C., 2012.Global sales and contract law. Oxford University Press.