X on the instructions of the promoters of a proposed company prepared ...
Possible response:
Legal rights of X to claim costs
X, as a professional who provided services to the company, has legal rights to claim his costs from the company based on the law of contract and the principles of agency. X acted as an agent of the promoters who hired him to perform the task of preparing the memorandum and articles of association and registering the company. The agency relationship implies that X acted on behalf of and with the authority of the promoters, who were the principals of the company. Therefore, the company, as the legal entity created by the registration process, is bound by the actions of its agents, including X, if they were within the scope of their authority and the terms of the contract.
Validity of X's claim for costs
The validity of X's claim for costs depends on the terms of the contract between X and the promoters, as well as the nature and reasonableness of the costs. If the contract specified the amount and timing of the payment of the costs, and the company was aware of and agreed to them, then X has a strong case to enforce the contract against the company. However, if the contract was vague or silent on the payment of costs, or if the company had valid grounds to dispute the reasonableness or necessity of the costs, then X may face challenges in claiming his costs from the company.
Defenses of the company against X's claim
The company may raise several defenses against X's claim for costs, such as:
- Lack of authority: If X exceeded his authority or acted beyond the scope of his agency, the company may argue that it is not liable for his actions or costs.
- Breach of duty: If X breached his duty of care or loyalty to the company, the company may argue that it is entitled to damages or indemnity for any harm caused by his actions or costs.
- Illegality or fraud: If X engaged in any illegal or fraudulent activities in preparing the memorandum and articles of association or registering the company, the company may argue that it is not liable for his costs or may seek to recover any damages or losses suffered as a result of such activities.
Conclusion
In conclusion, X may succeed in claiming his costs from the company if he can prove that he acted within his authority and the terms of the contract, and that the costs were reasonable and necessary. However, the company may have defenses against his claim if it can show that X breached his duty or acted illegally or fraudulently. Therefore, the outcome of the dispute depends on the facts and evidence presented by both parties and the interpretation of the law and contract.