Explaining the legality of cancelling a contract based on the company's constitution and separate le

Your answer must be based on Companies Act 2016 Malaysia or equivalent legislation/ laws. Andy and Billy are two good friends who would like to start a business together. They pooled together  their life savings and decided to open a pet hotel in Sri Hartamas to be named Hello Pets. Three months’ ago, Andy and Billy appointed Chris to register their business as a private limited company named “Hello Pets Sdn Bhd” at the Registrar of Companies (ROC) Malaysia. To help get their business off the ground, Andy and Billy asked Chris to find a good supplier of pet-care products. Chris then contracts with a leading supplier of pet grooming equipment and ordered MYR10,000 worth of  products. Relate to Andy and Billy, the options that they have with regard to this contract. (10 marks)

Hello Pets Sdn Bhd was eventually registered and issued their certificate of incorporation last month. Their company objects, contained in their Memorandum or Association are:

(i) to provide the services of pet care and pet boarding;

(ii) to buy and sell pet-grooming and pet-care products; and

(iii) to do all such other things which, in the opinion of the Board of Directors, are relevant to the above businesses of the company.

A week ago, Billy contracts with an interior design company and a colour therapist (animal psychologist) to design their pet hotel in the style and colour that will make their furry boarders more relaxed. Billy argues that this investment of nearly RM100,000 is necessary for the future, as he had done his research and he considers this an opportunity to be a market leader. Andy on the other hand  considers this cost too exorbitant and wasteful, because they do not have any big clients yet. Explain to Andy based on current law, whether he may cancel the contract.(10 marks)

This assignment will assess your ability to relate the law to situations pertaining to separate legal entity and company constitution (in order to assess its relevance) (A4, PLO6)

1. You are required to write your answer within the word limit of 1,500 words. This word limit excludes the cover page, tables/ diagrams, in-text citations and references. 

2. In the event the maximum word limit is exceeded, any part or parts of the answer in excess of the word limit will not be marked. 

3. The following is a general guide as to the answer layout:

(a) Facts : general identification of the parties & key information in the question; 

(b) Law/ Legal Issues : elaboration of legal issues with relevant support (cases & Act) & application to the question; and

(c) Conclusion : summary of the arguments presented and a persuasive conclusion.

4. Your attention is also drawn to APU’s regulations on plagiarism; these regulations apply to this coursework. Any information taken from another source (e.g. lecture notes, text books, Internet sites) must be referenced using the APA Referencing method.

5. Please state your word count at the end of your answer.

This assessment will be marked based on the following criteria:-

Overall clarity and flow of information; accurate use of terminology, definition & application of law; able to consider & relate the legal issues to provide a reasonable solution, within the constraints of the word limit.40 %

Research : Good and balanced research towards application (to the question) rather than plain description. Appropriate and different sources must be reviewed, focusing on academic research and not just secondary research from general websites.20 %

Literature Review : Comprehensive, accurate and consistent review of the selected texts and the ability to support views presented with proper reasoning.20 %

Referencing And Citation : Use of APU Referencing method to identify the source(s) of information. In-text citation and References match. 10 %

Overall Structure : Use of proper language and grammar; work must be type-written, organised and neat margins/ lines; consistent fonts; overall effectiveness of a law answer.10 %