Business and Corporations Law Assignment

Business and Corporations Law Assignment

Introduction

This Business and Corporations Law Assignment answers the 3 questions based on the given case study. The case study is designed to help students understand the various business laws and corporations law with the help of specific example scenario.

Answer 1

Facts and Issue

The given facts state that, Jane purchased a derelict business and the place where the business was conducted. She refitted the shop and the same was conducted by Edward (husband of Jane) who was in the business of redecoration. The decoration was conducted on the basis of oral agreement entered by Jane and Edward that Jane will pay for the work conducted excluding interest of the expense amount.  The expense was about $ 40,000 but the same was not paid by Jane within a year, even after promising the same.  After some time, Jane bought the next door shop. She made a full and final payment to Edward ($10,000) as she is need of money so that new shop could e purchased by her. Edward accepted the final payment on the hope that the redecoration of the new shop will be given to him, however, Jane did not do so, rather she appointed Max for the same. She paid $ 25,000 for the redecoration. Because of such settlement she was able to secure a loan from the bank. It was found that Jane is interested to marry Max. Edward was outraged and wanted to sue Jane.

The main issue was can Edward sue Jane for $ 30,000 which is outstanding from his refitting the coffee shop.

Rule

In Australia, a contract is established when the component parties intent to agree to abide by their offers and acceptance in exchange for consideration.

Though every element for the formation of a contract is necessary but one element which is mostly found under the scanner of the court is the intention of the parties. Intention means meeting of minds. If the parties do not intent to abide by the contract mutually then there is o contract. Courts have tried to understand the scope of the contracts on the basis of intention under two specific heads. These are:

  1. Intention under the social and domestic relationship – The courts of law from the time immoral are of the view that normally persons or the parties of the social or family relationship does not wish to establish a legal and valid agreement. In Lens v Devonshire Club it was submitted that parties in legal and strategic relationship intent not to abide legally unless and until there is an agreement in such which states the contrary. When the parties are not staying together then if a contract is established that the court may presume that the parties may wish to enter into a legally binding agreement and is held in Balfour v Balfour. Also, if the agreement is such that its non establishment will result in hampering the party then the court will establish that the parties do have an intention to abide by the agreement and is held in Merritt v Merritt.
  2. Intention under the commercial relationship – on the same reasoning, the court has a presumption then when the parties are in commercial relationship then they intent to abide by the contract legally. But inJones v Vernon'sPools &Orion Insurance v Sphere Drake Insurance it was submitted by the court that if evidence can be proved then the scope of the intention of the parties can be proved. In Edwards v Skyways it was submitted by the court that if an agreement is entered by the parties which rebut the contractual intention of the parties then the court will look into the circumstances of the case to analyze the legality of the contract.

Thus, the intention of the parties will be judged by the court by looking into the facts of the case

Application of Rule

The rule is now applied to the given facts. As per the facts Jane redecorated her business with the help of her husband Edward and made a full and final payment for the same on mutual arrangement. However, the full and final payment was made on the pretext and it was assumed by Edward that the new shop that is purchased by Jane will also be assigned to him for redecoration. However, the same was not done and the shop was given to Max to whom Jane intended to marry.

It is submitted that a contract is established only when both the parties intend to abide by the same. In the present fact, the full and final payment is made on the hope that Edward will receive the next project from Jane which was reduced in writing. It is submitted that both Jane and Edward does not mutually agreed and there was misunderstanding when the full and final payment was made however, since the same was reduced in writing thus, it is submitted that  Edward cannot recover the money from Jane as there was written agreement which specifies the intention of the parties.

Conclusion

To Conclude, it is submitted that an agreement is valid only if parties agreed for the same and if there is confusion in regard to the intention then evidence can be produced which nullifies any misunderstanding.

Answer 2

Facts and Issue

 Jean was a regular visitor at a supermarket. She slipped in the supermarket as some grapes were fallen in aisle 3. Because of which she broke her ankle. The grapes are part of the fruit section but the management of the supermarket have no knowledge as how the same are found in aisle 3. However, it was confirmed by the manager of the store that there were number of spillages in the aisles.

The main issue is whether the supermarket s liable for negligence for the injury of Jean?

Rule

The main applicable rule that is applied to the circumstances is the law of negligence. It is established that when any erroneous act is done by any person to another which he should not do as he is legally under duty to protect that other person, then such act is called an act of negligence. The old age principle was highlighted by the English courts in Donoghue v Stevenson. In negligence the defaulter is duty bound to protect the plaintiff (neighbour) and such duty is forfeited resulting in negative brunt on the plaintiff. All these circumstances gave rise to negligence.

The three necessities for the occurrence of negligence is duty of care, violation of duty and loss.

In negligence, the defaulter is under the obligation of a duty. This duty is legally imposed and is a duty of care. When the defaulter undertakes any action or act then he must be cautious enough that no person who is associated by his action is negatively hampered. If there is any negative impact because of the actions of the wrongdoer and that impact causes loss to the plaintiff, then , the plaintiff under the law of negligence ahs power to claim damages from the wrongdoer. In negligence, the duty of care is only forced upon the wrongdoer if few things are captured. These are:

  1. The plaintiff is the neighbor of the wrongdoer. It means that only such persons can become plaintiff who is in contact with the wrongdoer and because of such contact they are affected by the actions of the wrongdoer. In Le Lievre and another v Gould it was submitted that the paramount feature for the establishment of duty of care is neighborhood principle. The law was also held in Heaven v Pender;
  2. Further, the plaintiff can only become the neighbor of the wrongdoer when they are in coordinal/near/close and proximate relation with each other. It means that only such persons fall into the category of the plaintiff which can be anticipated by the wrongdoer that such persons are negatively hampered by his acts. In Rondel v Worsley & Palmer v Tees Health Authority the concept was established;
  3. Also, if the defendant can analyze that plaintiff is hampered then only the protection duty towards such plaintiff can be forced, otherwise not. This is the rule of forseeability and is held in Caparo v Dickman.

In negligence, there is an obligation to provide full protection to such persons who are impacted by ones action. If the wrongdoer knows that any avoidance of act may hamper the plaintiff and may suffer loss, then he must indulge in such acts so that such danger is removed. If the same is not done, then also the wrongdoer is captured within the framework of negligence. The established commercial law is dealt in Margereson v Roberts & Palsgraf vLong Island Railroad.

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Application of Rule

 The law is now applied.

It is submitted that the store manager of the aisle is aware that there is spillage on the aisle and thus it his duty to remove the same so that no injury is caused to the visitors of the supermarket. But this duty was not comply by the manager of the supermarket because of which Jean slipped on the grapes and broke her ankle. Thus, there is duty of care on the manager which is violated and because of which damage is caused to Jean.

Hence, the duty of care is violated and the law of negligence applies. Hence, the supermarket is liable for negligence for the injury of Jean.

Conclusion

To conclude, it is submitted that the law of negligence is very important and one should protect the persons who are impacted by ones action.

Answer 3

Facts and Issue

A woollen jumper was purchased b Bob from a shop (Clothes Galore) and was manufactured by a mill (Southern Knitting Mills). When Bob wore the jumper, he contracted dermatitis as there were bisulphite of soda present in the jumper. The bisulphite was left during the manufacturing process by the manufacture and the same was also not seen by a normal person (including retailer and buyer).

The main issue is whether Bob has any remedy available under the Australian Consumer Law?  

Rule

The Australian Consumer Lawsubmit that every consumer has the right to return the goods that they have purchased when the goods are defective, are not identical with the sample or performance etc. [Australian Consumer Law, 2014]

As per section 3 of the Law, consumer means a person to whom the goods are supplied. Section 7 defines as who the manufacturer is? Section 9 states that the goods are defective if they lack any safety as expected by the consumer of the goods. Section 54 submits that when the goods are sold to a consumer then they are of acceptable quality. And the goods are considered to be unfit of does not fulfil the purpose of the consumer for which it is purchased and must be safe.

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As per section 271 of the Australian Consumer Law, the consumer of the goods may bring an action against the manufacturer if the guarantees that are submitted under section 54 are not complied with. The consumer has full right to bring an action for damages against the manufacturer. As per section 272 the damages may include price paid for the goods, loss etc. section 273 permits the consumer to bring the action against the manufacture within 3 years after the day when the consumer is aware that guarantee is not fulfilled by the manufacturer.

Application of Rule

The Australian Consumer Law discussed above is now applied to the facts of the case. It is submitted that Bob was the consumer and has faced loss because of the action of the manufacturer. The manufacturer was not able to fulfil the guarantees as specified under Australian Consumer Law. Thus, Bob has full right to claim damages from the manufacturer.

Conclusion

To conclude, it can be submitted that the Australian Consumer Law is a very important piece of legislation that has safeguard the position of not only the consumers but also the position of the manufacturers and the suppliers.

Reference List

Atif Tufal “Intention to create legal relation”   http://www.lawteacher.net/PDF/Intention%20Lecture.pdf Downloaded 18th January 2014;

Balfour v Balfour [1919] 2 KB 571;

Edwards v Skyways [1964] 1 WLR 349

Julie Clark, “Australian Contract Law” http://www.australiancontractlaw.com/law/formation.html Downloaded 18th January 2014;

Caparo v Dickman [1990] 2 AC 605

Margereson v Roberts [1996] CA

Negligence (2013) http://www.lawhandbook.sa.gov.au/ch01s05.php Downloaded 18th January 2014

Palmer v Tees Health Authority [1999] Lloyd’s Rep Med 351,

Palsgraf vLong Island Railroad Co., 248 N.Y. 339;

Rondel v Worsley (1969)