Sample HI6027 Business and Corporate Law Case Study

HI6027 Business and Corporate Law Case Study Sample

Purpose of the assessment (with ULO Mapping)

The purpose of the Group Assignment is to provide students with an opportunity to work in a collaborative environment in solving three case problems by citing the relevant legal rules and cases and applying these to the facts of the case.

In this Group Assignments, students are required to:

- Critically analyse the main features of the Australian Legal System and the foundations of company law. (ULO 1)

- Critically analyse the basic principles of Contract, Tort, and privacy law and apply them in resolving legal issues arising in commercial transactions. (ULO 2)

- Research and advocate the appropriateness of the different types of business structures and the legal environment in which they operate and their advantages and disadvantages in various commercial contexts. (ULO 4).

Purpose:

The Group Assignment aims to provide students with an opportunity to work in a collaborative environment in solving three case problems by citing the relevant legal rules and cases and applying these to the facts of the case. Students are to form groups, with a minimum of 2 and a maximum of 4 students per group. The assignment consists of a 2,000-word written report.

Instructions: Please read and re-read carefully to avoid mistakes.

Group Report

1. This group assignment consists of 3 parts. Part A is a question on Contract Law, Part B is a question on Negligence and Part C is a question involving Corporations Law. All questions must be answered.

2. Question A is worth 20 marks, while Question B and Question C are worth 10 marks each.

3. The total word limit for the group report is 2,000 words (+/- 10% allowed)

- Word limit for Question A – 1,000 words
- Word limit for Question B – 600 words
- Word limit for Question C – 400 words

Word count limits are strictly enforced. A deduction of two (2) marks will be imposed for every 50 words over the word count for either part of the report. Anything over the word count will not be read by your lecturer.

4. The total word count for the report as well as each part must be clearly written on the cover
sheet of the assignment. A paper will not be marked if the word counts are not written on the cover sheet.

Solution

Part A

Issue

Issue in the given case scenario is based on contract law. In this case, it is required to give advice to Sierra Foxtrot Airport with respect to its contractual position in connection with three tenders, such as Green Grow, Sow This, and Grassy Plains.

Legal rules and regulations

A contract is referred as binding agreement in a legal manner. Formation of the valid contract is based on the following elements –

Agreement: For creation of valid contract, first requirement is the agreement that usually includes the element of offer and acceptance and consists ‘meeting of minds’ between more than one people (Ridoan and Sifat 2018, p. 70(2)). In order to create offer, not any particular form is needed, and it could made to a single person or public at large, which is explained in case of Carlill v Carbolic Smoke Ball Co. Further, offer must be distinct from invitation to deal. For Assignment help In the legal case, Backpool & FLyde, it was stated by court that, invitation to tender are also normally regarded as invitation to deal, with the tenders themselves creating offers that may be rejected or accepted (Australian Contract Law, 2019). Although, invitation to tender may run with it distinct offer to take into account all tender submitted. Further, acceptance is refereed as unequivocal statement through the offeree assenting to the offer.

Consideration: It is the amount asked by one party from another party for exchange of their promises (Valcke 2019, p. 292(3)). It could be anything that is stipulated by the promisor except it should not be illegal. In the case of Dunton v Dunton, giving up freedom is also considered as adequate consideration.

Intention of parties for creating legal connection: In order to building valid contract, parties to an agreement should have intention to create legal relationship. At the time of assessing every case, usually court implements some presumptions to distinct types of contracts. Therefore, in the domestic and social type of contract, it is presumed that, contract has not been formed with the intention to enter into any legal relationships (Bagheri, Kamal and Mansour 2017, p. 512(2)). On the other side, in the commercial type of contract, it is presumed that intention of parties is to make legal connection, and the same aspect has been observed in the case of Rose & Frank.

Capacity: There are some people or class of individuals that do not possess adequate capacity to formation of contract, and as a result thereof contract would not be enforceable against them(Zottola et al, 2018, p. 12(1)). For example, person of unsound mind is not have capacity of contract and therefore any contract made with them is considered as valid contract and therefore contract will not be enforceable against them.

It has been noted that, communication between two parties plays significant role in order to form valid agreement (Hart, 2020, p. 22(3)). As a general rule, communication would be effective only when it is send by one party and received by another party. However, by application of the postal rule of communication, it has been observed that, communication would be effective from the date when a valid post is posted, and not from the date when post is received by offeree. However, a contract cannot be creates until the post has been examined that their offer has been accepted by this act and it cannot be made by complying with the postal rule of acceptance (Korolev et al, 2018, p. 1008 (3)).

Application

In the prevailing case scenario, Sierra Foxtrot Airport has called for tenders for supply for green seeds with a closing date of 1 June. In this, there are three companies, namely Green Grow, Sow this, and Grassy Plains, has been applied. By above rules and regulations, it has been noted that, calling of tender is invitation to offer, and therefore there is not any obligation on the Sierra Foxtrot Airport to accept the minimum tender.

By considering the tender of Green Glow, it has been noted that, company has submitted this application in timely manner; therefore it is eligible tender application. Although, Foxtrot Airport do not want to give this contract to the cited organization because of unreliability of goods and services provided by Green Glow. Therefore, there is not any contract has been formed between Green Glow and Foxtrot Airport. The reason behind the same is that, in order to create valid contract, there must be valid agreement between two parties, and the same aspect is not exist in the given case.

Along with this, by considering the tender of Sow This, it has been seen that, company has submitted tender application within prescribed time, and application has been also received by Foxtrot Airport. However, such application is not considered by Foxtrot Airport at the time of discussion about giving contract to anyone company. Therefore, it can be said that, there is not any valid contract has been formed between them.

Lastly, by considering the tender application of Grassy Plains, tender application has been filed by company before the closing date but it was received by Foxtrot Airport on 2nd June and is spite of this, it was considered by company. Further, Foxtrot Airport has granted its acceptance on this tender, but this acceptance has not been received by the Grassy Plains. It is because, postal worker has destroyed the application, and without any actual communication, it is not possible to form the contract. The above analysis reflects that, communication may be performed by verbal or written manner, but it must be effective. In the absence of any effective communication, formation of the valid contract would not be possible.

Conclusion

To sum-up, it can be ascertain that, Sierra Foxtrot Airport has not formed any legal and valid contract with any of three companies. Due to this, it is advisable to the Airport Company that there is not any contractual liability occur with other companies.

Part B

Issues

In the prevailing case analysis, issue is concerned with the claiming of damages for the negligence. It is required to provide advice to Darcie on whether or not her case against Madeleine would be successful in the context of negligence aspect.

Legal rules and regulations

Negligence is referred as failure to exercise reasonable care. There are certain elements that should be proved by plaintiff in order to make claim against negligence. Such elements are duty of care, violation of duty of care, and causation ( Fhloinn, 2017, p. 180 (3). If all three elements have been proved by plaintiff successfully, then an ultimate part of a negligence claim consists of damages. Analysis of such three elements is as follows –

Duty of care: It is the first element that should be proved by plaintiff that, duty of care present between the plaintiff and the negligent individual. It usually consists of care not to assist injury to other people through actions or inactions (Dutescu, 2017, p. 218(1). There is not any single factor to explain about whether or not there is existence of duty of care. Although, mostly cited test for ascertainment of duty of care present is the neighbor principle, which was also explained in legal case of Donoghue v Stevenson. In the cited case, it was stated that, person should take reasonable care for avoidance of act or omission that could reasonably foresee will be probably to injure their neighbor (Legal Service Commission of South Australia, 2020).

Breach: Whether or not breach of duty has been occurred would be based on what is regarded as ‘reasonable’. In this aspect, it is required by plaintiff to demonstrate-

- There was a major risk of harm.

- Such risk was foreseeable.

- A normal person would have taken safeties against the risk in the similar situations(Miller and Antonucci 2016, p. 145(2)).

It should be noted that, in case of obvious risk, there will be not any liability arise on defendant as the risk was quite obvious to a normal individual and therefore the plaintiff has obligation for their own actions (Civil Liability Act 2002 NSW, 2020).

Causation: It should be required to prove that, as a result of violation of duty of care, damages have been suffered by plaintiff. In the absence of this, negligence claim could not be established as given in case of Amaca Pty Ltd v Ellis (Taylor & Scott Lawyers, 2021).

Damages: If all above three elements has been proved by plaintiff in successful way, then they would be eligible to get compensation for their harm that has been caused.

Application

In the given case scenario, property of Madeline at which garage sale has been conducted included a concrete driveway comprised sections of joined in an expansion joint that extended across its length. It is expected by Madeline that significant number of purchaser will attend the sale and she reasonably knew about the variation in the extent of adjoining concrete slabs in the forecourt of her home. When Darcie (buyer) has entered into premises, she does not have any idea regarding such disparity in slabs and due to this she fell towards the grounds.

The relationship between seller and purchaser give rise to a duty of care. Such care has been breached by Madeline as she knew about the disparity in the level of adjoining concrete slabs, and which may create injury to other person. Darcie has suffered from injury because of such breach of duty of care as if Madeline has taken adequate steps to remove disparity in the concrete slabs then it is probable that she may not suffered from injury.

Conclusion

To sum-up, it is advisable to Darcie that her case against Madeline would be successful as there is existence of all elements of establishment of negligence claim.

Part C

Issues

The prevailing case scenario is concerned with analysis and discussion of the director’s duties as per common law and corporation Act. It is required to ascertain whether the directors of Bluff Solutions Pty Ltd have breached their duty of care.

Legal rules and regulations

According to section 180 of the Corporation Act, director of company possesses to carry activities with an extent of care and diligence that a normal person will be predicted to demonstrate in that role (Roles and Responsibilities of directors, 2020). At the time of taking any decision, directors are required to be applying an enquiring mind, and take into account the overall position of company (Australian Securities and Investment Commission, 2021). In practice, this duty require every director to –

- Become familiar with the basics of business organization.

- Observation of policies and affairs of company (Chaffee, Davis-Nozemack 2017, p. 1428(2)).

- Stay informed and makes suitable enquiries with respect to activities of company.

- Possess an informed opinion regarding financial capacity and solvency of company (General duties of directors, 2020).

Further, section 180(2) of the cited Act states that a director who make business judgment is taken to satisfy the duty of care requirement for judgment, if they –

- Judgment has been taken in good faith and proper reason.
- Not having any material interest in subject matter (Ponta, 2018, p. 645(2)).
- Inform themselves up to the extent they believe to be suitable in reasonable manner (Corporation Act 2001).
- Rationally believe that it is in the interest of company (Yoshikawa and Hu 2017, p. 100(1)).

Application

In the given case scenario, director Jerry has directly provided his opinion about the report that it is correct even if some of the information has not been examined and supported by up to date data, which shows that duty of care has been breached by Jerry definitely. Further, it can be said that, remaining directors of the company also rely on the report and invested the money of company in the new software application, which creates foreseeable risk of harm to the company. But, by application of business judgment rule, it has been taken in good faith by the remaining directors and they rationally believe that it was in the interest of company.

Conclusion

Based on above analysis, it can be concluded that, Jerry Robinson, directors of Bluff Limited has breached duty of care as stated in Corporation Act 2001 and common law.

References