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A, B C and D are sole directors and shareholders of EFG Company each holding 25% of the shares in the company. The articles of association
of EFG Company state that "the directors cannot enter into any contract on behalf of the company exceeding $30,000 without the agreement of all the shareholders''.
B contracted on behalf of the company for $40,000 with Y Company without the agreement of the other shareholders. Which of the following is correct?
1. Y Company may enforce the contract against EFG Company
2. A, C and D may obtain an injunction to stop the contract being canted out
3. B may be liable to EFG Company for breach of duty.
Suggested Answer: A
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8 comments · newest first
FR
Frederic
1 year ago
Totally agree with the points about A, C, and D being able to act!
BE
Ben
1 year ago
Wait, can Y Company really enforce a contract if it’s against the articles? Sounds sketchy.
LI
Linette
1 year ago
B is totally liable for breach of duty here. No doubt about it!
JA
Janna
1 year ago
I think Y Company can enforce the contract since they were unaware of the internal rules.
LA
Lavonna
1 year ago
B acted beyond his authority, so A, C, and D can definitely seek an injunction.
MA
Malinda
1 year ago
Hmm, I'm a bit confused on the distinction between these two approaches. I'll need to review my notes to see if I can spot the key benefit of SASE over ZTNA.
HA
Halina
1 year ago
Okay, I think I've got a strategy for this. Option C sounds like the best bet - calling the Apex class method directly from a test method instead of the setup method. That way, the test method can exercise the specific functionality and hopefully improve the code coverage.
EL
Elbert
1 year ago
I'm not completely sure, but I think when an assert fails, it doesn't automatically consume gas.