LAW6000 Business and Corporate Law Assignment 2 Sample
Length: 2000 words +/- 10%
This assessment addresses the following subject learning outcomes:
a) Demonstrate a sound comprehension of the essential elements required to create, manage and discharge a contract and assess the remedies available for breach of a contract;
b) Examine legal principles related to the creation and operation of various forms of business organizations and critically evaluate their effectiveness across a range of business scenarios.
c) Explain the processes for incorporating, managing, and winding up a company, including key director duties, the importance of the Corporations Act 2001, and the role of regulatory bodies.
d) Evaluate the role of agency in contract formation for different business vehicles and identify the associatecd risks such as vicarious liability for negligent acts.
e) Employ legal skills (statute law and case law), critical reasoning, and make informed judgments as to likely legal outcomes of a range of business scenarios.
By 11:55 pm AEST/AEDT Sunday of Week 9 (Module 5.2)
Total Marks: 100 marks
This assessment allows students to solve practical problems that arise from a fact scenario and to give appropriate advice to clients.
There are five case studies for case study assignment help you are required to critically analyse. With respect to each case study:
? Identify the legal issue(s) arising from the facts of the casestudy
? Identify the appropriate legal rules that requires discussion in the case study
? Apply the law to the facts of the case study
? Reach a conclusion/ give practical advice to your client.
Your analysis should refer to appropriate cases and statutes and be referenced using the APA
Submission is through SafeAssign by 11.55 AEST Sunday of Week 9 of the relevant trimester
Question 1 (20 marks)
James has recently decided to open up a consultancy business near the city. He has identified appropriate premises and immediately gets into negotiation with Bradley, the landlord. He wishes to lease the commercial property for a period of five years. James proposes to demolish some of the interior walls to allow for better lighting and to then fit out the space to suit the modern image that he desires for his business. James and Bradley agree that the work would be completed in one month. It is agreed that once a lease agreement is signed James can commence the work in preparation to move into the premises.
James signs his part of the agreement and sends it to the offices of Bradley’s solicitors. He then commences the work to demolish the walls and fit out the premises. Three weeks later as James was about to complete the fit out of the premises, he learns that Bradley has yet to sign the agreement and has in fact entered into negotiations with Simon with a view to leasing the premises to Simon.
James has completed a substantial amount of work and is preparing to move in. He has in fact printed all his stationery. He approaches Bradley who says that there was in fact no contract and that he is likely to lease the premises to Simon. James is distraught and seeks your advice.
With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise James on whether he is able to enforce the agreement with Bradley and the remedies that may be available to him.
Use appropriate case law in support of your answer.
Question 2 (20 marks)
Elizabeth is a major shareholder in Millennial-Relics Pty Ltd. Elizabeth and has noted that the company maintains the old-fashioned ‘memorandum of association’ which has been prepared for Millennial Relics Pty Ltd.
The objects clause as drafted, limits the objects of the company to the development, manufacture and sale of motor vehicle batteries. Elizabeth believes that the research work that Rahim is doing (and future technology which may be developed as the full implications of Rahim’s work are realized) may have spin- offs into a number of related areas including dynamos for driver-less electric cars.
Elizabeth has spotted an opportunity that may allow the company to enter into a contract with like-minded companies for the development of state of the art dynamos that will be compatible with all types of electric cars. She is however concerned that the narrowness of the ‘memorandum’ may hamper the company’s ability to move into the emerging lucrative area and also the development and commercial exploitation of the dynamos which the company’s ongoing research may uncover may not be pursued lawfully.
Elizabeth has read that there is no legal reason to have a memorandum or articles, even if they are now called a corporate constitution. The company’s research may also expose potentially exploitable products or secret processes in other areas related to artificial intelligence. When Elizabeth raised these concerns with the company’s other shareholders, they told her that they had been advised by the lawyers that this was the standard form for their companies, and that there was no cause for concern. Elizabeth is not convinced.
With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Elizabeth of the company’s position regarding any new contracts that it may enter in connection with the development of dynamos for driver-less electric cars and also explain how the replaceable rules may be of use to the company in the future. (20 marks)
Question 3 (20 marks)
In December 2020 Greg Napole was driving along a busy street with his spouse and two children in the car.
As they approached a busier section of the road Greg had to slow down significantly and as he was driving past a nearby park, a southern blue gum tree fell onto the car that he was driving killing wife Marsha and seriously injuring his two children and himself. Greg and his two children were hospitalised for two months with several broken bones. Upon recovery, Greg learnt that the tree had fallen because its root system had been destroyed by underground water leaking from a water channel that had been constructed by the local council, City of Small-town Council, in the year 1998. Greg is keen to have the council compensate him for the injuries he and his children have suffered and for the loss of his wife.
The local council has denied liability. They claim not to have a duty of care to Greg and his family. Greg wishes to pursue his claim and has now come to you for advice.
With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Greg as to
whether he would be successful in negligence against City of Small-town Council. Please explain fully, using relevant case law. (20 marks)
Question 4 (20 marks)
Jaswant and his two friends, Davinder and Lachlan have been in a partnership for the last three years. Their business has grown and they now wish to expand into other states and territories. Their other friend Nicholas is a solicitor and he advises them to incorporate their business under the Corporations Act 2001 (Cth) to take advantage of the principle of separate legal entity and to allow them to trade in any state without having to comply with local partnership legislation. Jaswant, Davinder and Lachlan have brought in some of their own assets into the business and their partnership agreement specifically states that the assets will remain their individual property. They are concerned that they may not be able to do this after incorporation. They are also concerned about whether they will be able to contract with the company for the provision of some of the services the national business will be delivering. They each have specialist skills and are hoping to be remunerated by the business for their skills.
The three friends have also agreed to appoint Nicholas as the company solicitor and would be the only solicitor used by the company. This would be set out in the constitution that Nicholas would draw for the company. Lachlan is however concerned that if their relationship with Nicholas becomes strained, it may be difficult to use another solicitor if he chooses to enforce the constitution. Lachlan now approaches you for advice.
With reference to relevant sections of the Corporations Act 2001 (Cth) and appropriate case law, use the IRAC legal problem-solving approach to advise Lachlan of the effect and consequences of converting their partnership into a company and further whether Lachlan would be able to enforce the envisaged constitution if they wanted to use a different solicitor. (20 Marks)
Question 5 (20 marks)
Rahab is an executive working for a large pharmaceutical company which has recently transferred her to an overseas branch to manage the roll out of a global vaccine. She decides to leave the apartment Where she lives and to put her household goods in storage. She contacts a company known as KingStore Pty Ltd, Which specialises in the storage of goods. The company agrees to store Rahab’s goods for the period she will be away.
Before signing the contract of storage, Rahab asks about the condition of the building in which her goods will be stored. She has heard about recent floods in the state and just wants to be sure that her be safe. The company manager replies: “Our building is in excellent condition. We built it only two years ago and we used the best building materials. Your goods are safe with us.”
Rahab decides to enter into a written contract with the company and stores her goods with them. The contract which she signs does not, however, say anything about the condition of the building, nor does it make any reference to the other statements made to Rahab by the company manager concerning the quality of the building materials.
Some months later, the company telephones Rahab at her new place of work and advises her that her goods have been badly damaged due to recent heavy rainfall which caused water to enter the building in which Rahab’s goods have been stored, and to damage them. The reason for the entry of the water into the building is that the building was badly built and poor building materials were used. As a result, the building’s foundations sank when the heavy rainfall fell, thereby causing a large gap between the bottom of the doors to the building and the floor of the building where the goods were stored.
Rahab now wants to sue the KingStore Pty Ltd for the loss she has incurred as a result of the damage to her goods.
With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Rahab
Of her legal position at common law against the storage company and discuss what remedies would
flow from them. Give full reasons and use any relevant case law. Do not consider any statutory rights.
Whether James can enforce the agreement entered with Bradley. If yes, then what are the remedies that can be availed by the James?
In Australia, in order to formulate a legal binding contract there must be presence of all the contract essentials which includes an offer, an acceptance, a consideration, the legal intention of the parties and the legal capacity of the parties. When there is a valid contract, then, the parties must comply with the contractual terms (Wong, 2017).
Now, at times an agreement is established between the parties which is subject to the formation of some formal contract. At times one party to the contract signs the agreement but the other party did not do so and decides to finalise the contract at some future time or date. In Masters v Cameron (1954) it was held that if the intention of the parties portrays that they wish to abide by the terms of the agreement, then, it makes no difference whether a formal contract is prepared or to be prepared at some future date or that the agreement would be signed at some later event. As per Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) in such situations, there is a valid contract amid the parties irrespective of the fact whether a final draft is executed by the parties or not. If there is lack of intention, then there is no contract amid the parties. (Tolhurst, 2011)
James wants to take on lease the premises of Bradley for five years. James and Bradley agreed that once the lease is signed amid the two then James is permitted to carry out the repair work within the premises which would take a month to complete and then move into the premises. James signs his part of the agreement and sends the same to the solicitors of Bradley, however, the same was not signed by Bradley. James commences the work and after three weeks he learns that Bradley is not willing to sign the agreement with him, rather, he is in negotiations with Simon.
It is submitted that by applying Masters v Cameron, the intention of both James and Bradley depicts that they intend to enter into a contract immediately as James was permitted to carry out the work at the premises and can then enter the vicinity. Also, James has signed the document and had completed his part of the obligation of the contract. Thus, the head of the agreement is intended to be abide by both the parties and thus Bradley cannot deny the enforceability of the contract amid James and Bradley.
It is thus concluded that there is a binding contract that exists amid James and Bradley and if Bradley did not abide by the agreement, then, it is considered as a breach of contract and James is liable to seek the expenses incurred by him for the repairs and compensation and damages for the stationery.
Whether Elizabeth can enter into contracts which are beyond the object clause of the constitution of the company? How replaceable rules can be used in future?
Salomon v A Salomon & Co Ltd  when any company is incorporated, then, the same acquires the status of a separate legal entity, that is the acts of the company are considered its own acts and the officers are not held liable for the same. In common law, as per Ashbury Railway Carriage & Iron Co v Riche (1875) the acts which are beyond the objects or powers of the company are held to be ultra-virus and thus not enforceable. However, as per section 125 of the Corporation Act 2001, no act by the company can be termed as ultra-virus even when the same is beyond the powers (object) of the company.Further, if there is no constitution, then, as per section 135 of the Act, the company can be run by the replaceable rules set under section 141 of the Act.
As per the facts, Millennial-Relics Pty Ltd is a company in which Elizabeth is the major shareholder. The company follows its Memorandum of association. The object clause of the company only permits the company to the ‘development, manufacture and sale of motor vehicle batteries’. Elizabeth wants to expand the operations of the business to dynamos of driver less electric cars upon which Rahim is doing research but is restrained by the object clause.
It is submitted that if Elizabeth enters into contracts that are beyond the object clause, then, such contracts are not invalid as per section 125 of the Act 2001 and the company must honour the same.
Elizabeth can rely on the replaceable rules made part of section 141 of the Act to run the company in future.
It is concluded that even if Elizabeth enters into the contract that is beyond the object clause, still such contracts will held to be valid in the eyes of law.
Whether the local council can be held negligent for the losses caused to Greg and his family?
When any defendant undertakes any acts or omission, then, he must make sure that no loss is caused to the plaintiff provided the plaintiff is his neighbour. To make any defendant negligent the main elements are:
i. The defendant is under duty to provide care to every plaintiff with whom he is sharing proximate relationship and who is reasonably foreseeable. The defendant must make sure that no harm of any kind should be caused to the plaintiff because of his acts and omissions;
ii. That if the duty of care is not comply with by the defendant, then the duty is held to be breached (Palsgraf v. Long Island Railroad Co);
iii. It is necessary that because of the breach, there should be some harm caused to the plaintiff which is not remote and which is caused because of the acts of the defendant (Home Office v Dorset Yacht Co Ltd .
Greg Napole was driving along a busy street along with his spouse and 2 children in December 2020. While he was driving one tree fell on the car killing his wife and causing injuries to him and his children. They took medical aid for 2 months.It is submitted that the local council can be held negligent because:
i. It is the duty of the local council to ensure that any acts that are undertaken by them should not cause any kind of harm to any person who are their neighbours.
It is submitted that Greg was a person who was using the road like any other travellers and the local council is aware of the same. Thus, Greg and local council are neighbours of each other and Greg is reasonably foreseeable. Thus, Local council owns the duty of care towards Greg and any person who was travelling with him;
ii. The duty of care was not complied with by the council as the tree that was fallen on the car of Greg was because of root system of the tree was destroyed because of the water leaking from the Channel that was constructed by the local council. Thus, the level of care that must be taken by the council was met while making the Channel. There was breach of duty of care.
iii. The loss that is caused to Greg was because of the breach on the part of council and the loss is not remote in nature.
It is thus stated that the local council is negligent towards Greg and his family and the council must compensate Greg for the losses so caused to him.
The council is negligent towards Greg and his family and thus must compensate for the losses so caused to him.
Advice Lachlan of the effect and consequences of converting the partnership into a company?Whether Lachlan would be enforcing the constitution if they wish to use a different solicitor?
As per section 124 of the Corporation Act 2001, upon incorporation, a company has all the powers that of an individual including the power to make contracts.
Jaswant and his friends, Davinder and Lachlan are sharing partnership relationship from past 3 years. If a company is established then:
The main effects of a company
i. The main effect is that the company will become a separate legal entity, that is, the acts of the company will be considered to be its sole acts and no officer will be held personally liable for the same (Shum, 1991).
So, if the three friends operates a company, then the actions taken by them will be on behalf of the company and they will not be held personally liable for the same.
ii. Since the company will be a separate legal entity thus it has the potential to enter into contractual relationships and thus itscan contract for the services of the national business.
iii. Since all the three have special skills, thus, they can be employed by the company and will be reimbursed by way of salary by the company.
iv. Nicholas can be appointed as the solicitor of the company by entering into a contract of employment.
The main consequences of a company
i. If the three friends establish a company, then, the assets that are brought by them in the business will become the property of the company and will be used to settle the liabilities at the time of winding up. Thus, they cannot treat the property as their own.
ii. The company has to pay taxes which will be ultimately borne by the officers;
iii. There are lots of paper work and time consuming in the formation of the company.
It is thus concluded that establishing a company will benefit the friends as the company will be a separate legal entity and has perpetual succession. The company can make contract but it will be lots of money and time that will be invested in its formation. Also, if Nicholas is appointed as lawyer then he will be an employee and he can be removed by terminating the contract of employment.
Whether Rahab will be able to sue the King Store Pty Ltd for the losses so caused to him because of the damage of the goods by rainfall?
In common law, if any one party to the contract makes a false statement with the intention that the other party enters into a contract with him, then, the contract suffers from misrepresentation and is not enforceable by law. Any aggrieved party has the right to terminate the contract and sue the other party for damages as the contract was based on misrepresentation (Beever, 2007).
Rahab was transferred to an overseas branch to deal with the roll out of a global vaccine. She left her house and put the goods in storage of a company King store Pty Ltd. The company specializes in storage and assured Rahab that their building is excellent and was built 2 years ago and is made with the best building material. That the goods will be safe with them.
Rahab decided to store the goods, however, nothing regarding the promises made by the company was mentioned in the contract. After few months, the company informed Rahab that the goods so stored were damages because of the heavy rain. The reason for the damage was that the building was badly built with poor quality material.
It is submitted that when the contract was made then the company knowingly made a representation that the building wasw made with a good quality material which in fact was not true. The false statement was made with the intention that Rahab enters into a contract with them and thus there was a misrepresentation made on the part of the company towards Rahab (Ciro et al., 2019).
So, Rahab can terminate the contract and seek damages.
It is thus concluded that Rahab can sue the company and seek damages for the losses so caused as the contract that was made amid them was based on misrepresentation.
Beever, A. (2007). Rediscovering the law of negligence. Hart. https://lesa.on.worldcat.org/oclc/496273579
Ciro, T., Goldwasser, V., & Verma, R. (2019). Law and business ebook (5th ed.). Oxford University Press Australia. https://ebookcentral-proquest-com.torrens.idm.oclc.org/lib/think/reader.action?docID=5979408&ppg=1
Shum, C. (1991). Business associations : an introduction to agency, partnership and company law (2nd ed., Ser. Hku press law series). Hong Kong University Press. https://lesa.on.worldcat.org/oclc/650877514
Tolhurst, G. J., Carter, J. W., &Peden, E. (2011). 'masters v cameron' - again! Victoria University of Wellington Law Review, 42(1), 49–64.https://lesa.on.worldcat.org/oclc/4822652359
Wong, A. (2017). Company law. (E. Chapple, Ed.) (First). Wiley. https://lesa.on.worldcat.org/oclc/1040039461
Ashbury Railway Carriage & Iron Co v Riche (1875) L.R. 7 H.L. 635
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 (SC).
Donoghue v Stevenson  UKHL 100;
Home Office v Dorset Yacht Co Ltd  UKHL 2,  AC 1004
Masters v Cameron (1954) 91 CLR 353.
Palsgraf v. Long Island Railroad Co., 248 N.Y. 339, 162 N.E. 99
Salomon v A Salomon & Co Ltd  UKHL 1.