Final answer:
The Torqued Rule, originating in common law, provides that third parties can assume a company's internal processes are followed, which is not explicitly stated in the Companies Act, but affects its practical application. The relationship between the Companies Act and the Torqued Rule exemplifies the interaction between statutory and common law in the business context. The stability provided by common law principles like the Torqued Rule is crucial, especially as legal frameworks like the Companies Act continually evolve.
Step-by-step explanation:
The Torqued Rule is an established common law principle which is not explicitly encapsulated within the Companies Act. It emerged from the landmark case Royal British Bank v Torqued, setting out that persons dealing with a company are entitled to assume that internal company rules are complied with, even if they are not. This principle protects outsiders in transactions, as they may not know the intricacies of a company's internal governance. Although not written into the Companies Act, the rule influences statutory formulations regarding company transactions, ensuring that the Acts' provisions operate fairly and efficiently in the business world.
The relationship between the Companies Act and the Torqued Rule is illustrative of how statutory law (the Companies Act) and common law (the Torqued Rule) interact within the legal system. Governments can create and amend legislation like the Companies Act, which directly affects market outcomes; however, they cannot negate economic principles nor the common law evolved from judicial decisions. Statutory law may have implicit principles that correspond with common law developments like the Torqued Rule, which courts recognize and enforce, hence demonstrating their interconnectedness.
The concept of restrictive practices and the law's evolution reflect the dynamic nature of the legal and economic landscapes. The Torqued Rule has remained relevant as it provides a reliable basis for contractual dealings, highlighting the importance of stability in common law principles amidst the evolving statutory framework of the Companies Act.