Case above has highlighted the business environment that Alex who is its managing director has to work within to achieve its business goals and objectives of making huge profits. Let us examine the facts of this case. First, Alex accepted a $100,000 order for the supply of steel cables to Shifty Sellers Pty Ltd. which was placed by Max, its director. Second, Shifty Sellers Pty Ltd. failed to pay for the steel cables. Third, Alex knew Max as a bad credit risk who the engineering industry finds to be the same. Fourth, Shifty Sellers Pty Ltd. did not pay Smart Engineering Pty Ltd. for the steel cables after going into …show more content…
steel cables because before supplying the steel cables, Alex knew Max was a bad credit risk. This puts the responsibility on Alex who should have refused to deal with Max who puts his own interest above his company’s interests. In looking at Salomon v A Salomon and Co. Ltd [1879] AC 22 case, Max cannot be found liable for the loss Smart Engineering Pty Ltd. incurred because of the unpaid steel cable. This is because Shifty Seller Pty Ltd. is the business entity that takes the liability and not Max. As per chapter 5c, section 601FC, her intentions were honest because she knew Alex to be the best person with knowledge of the Chinese market and experience that would ensure expansion of the business into China. Alex and Betty did not breach any duties owned to Smart Engineering Pty Ltd. as per the Corporations Act 2001 (Cth) because as per chapter 5c, section 601FC they were both acting in the best interest of expanding the business into