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Business Law Between Two Parties

HA2022 BUSINESS LAW

Instructions:

This assignment is to be submitted by the due date via SafeAssign on Blackboard.

The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook.

It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it appropriately acknowledged.

This is a group assignment. Students are to form groups, with a minimum of 3 and a maximum of 5 students per group. The assignment consists of 2 parts: a written report and an 8-10 minutes (maximum) in-class or video presentation.

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


GROUP REPORT

  1. This group assignment consists of 2 parts. Part A is a case study on Contract law, and Part B is a question involving Civil Liability (the Law of Torts and Negligence). Both questions must be answered.
  2. The total word limit for the group report is 2,000 words (+/- 10% allowed) with each part having a maximum word count of 1,000 words. Word count limits are strictly enforced. A deduction of 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.
  3. 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.

PART A: CONTRACTS LAW QUESTIONS

  1. Refer to the prescribed textbook: Gibson, A, Business Law, 10th edition (Pearson,Sydney: 2017).
  2. From Part 3 –Law of Contracts, Chapters 7 to 15 on Contract Law, refer to the “Tutorial Questions” at the end of the chapters and choose one (1) problem case question. Note: it must be a case problem-type question and not a short answer question.
  3. You must send your lecturer the number of your question and the page on which is appears for approval. Do not start work on a question without obtaining your lecturer’s prior approval
  4. In not more than 1,000 words, answer your chosen legal case question using the IRAC method.
  5. Your answer must be supported by relevant law and cases decided by Australian courts (preferably the High Court) and/or scholarly articles. A minimum of 3 references are required for this part of the report.
  6. Your references must be listed in a Reference list at the end of the Part A question.

PART B: CORPORATIONS LAW QUESTIONS

  1. Again, refer to Business Law 10th edition by Gibson.
  2. This time, refer to either of the following parts:
  3. Part 2 – Civil Liability, Chapter 4 (Civil Liability: The Law of Torts and Negligence) and Chapter 5 (Applications of Negligence to Business).
  4. Part 4 – Consumer Law, Chapter 16 (Statutory Consumer Guarantees and the Australian Consumer Law) and Chapter 17 (General and Specific Consumer Protection under the ACL).
  5. Refer to the “Tutorial Questions” at the end of the above-mentioned chapters and choose one (1) problem case question. Note: it must be a case problem-type question and not a short answer question.
  6. You must send your lecturer the number of your question and the page on which it appears for approval. Do not start work on a question without obtaining your lecturer’s prior approval.
  7. In not more than 1,000 words, answer your chosen legal case question using the IRAC method.
  8. Your answer must be supported by relevant law and cases decided by Australian courts (preferably the High Court) and/or scholarly articles. A minimum of 3 references are required for this part of the report.
  9. Your references must be listed in a Reference list at the end of the Part B question.


GROUP PRESENTATION

  1. Summarise your answers for Parts A and B of the group report.
  2. Present the summary of your answers in 10 minutes (5 minutes for each part).
  3. The Presentation will be done in class or video recording. Your lecturer will advise which is more appropriate.
  4. Whether in-class or video presentation, all members must present. The group will be marked down if not all members present.
  5. Video link must be uploaded to a publicly-viewable video sharing platform (ex. Youtube, Dropbox, Google drive) and the video link uploaded on Blackboard.
  6. A video presentation consists of both images and audio. For this reason, a plain Power Point presentation showing slides even with accompanying audio commentary is not considered a video and, hence, not allowed.

Answer

Part A

Issue

  • Does the buyer will be able to recover the excess amount he has asked from the shipbuilder?
  • Does the contract is valid when the consent given in protest?

Rule

The rule suggests that to form a valid contract it is required that there must be two parties and all the essentials of the contract must been fulfilled to form a valid contract under English Law. 

The essentials of contract are:-

Offer and Acceptance- To form a valid contract it is required that there must been an offer by one party and the party is called offeror and the party to whom the offer is made called offeree. The party in the contract to whom the offer has been made accepts the offer than the contract is binding on both the parties. 

In Blackpool & Flyde Aero Club v Blackpool Borough Council [1990] 3 All ER 25; [1990] EWCA Civ 13, the tender has been made to made the flights and it must been timely delivered and the contract has been delivered on time but due to the error it has been registered late and therefore the company has alleged that the party has breached the contract. The Court held in this case that there has been various labour has been included in this case and there must been a valid contract and therefore it has been considered that there must been acceptance and the contract is binding (Australia Contract Law, 2018). 

Consideration- The consideration is an important element of the contract to bind a legal contract the consideration has been given by one party to form a valid contract that can be any right, benefit, profit or any interest than the contract becomes valid (Peden, 2001)

Consent- The Consent is the main element to form a valid contract and it is required that the parties has accepted the terms of the contract with the free will and without any fear or force as it is necessary that there must been a free will and it must been required that the parties has given its consideration without any mistake, false statements, duress and the undue influence. In Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 case there has been the contract been made to repaint the helicopters. The helicopter chartered company has been agreed to pay a sum of $5200 but the company has been dissatisfied with the work and gave back the helicopter for repainting and when the company required helicopter urgently and its officer has signed the documents of possession but not paid the whole amount. It was argued by the Helicopter charter that the document of agreement has been signed in duress. The court rejected this argument on the basis that there was no duress while signing the documents as the circumstances suggest that due to urgent requirement of helicopter by the company and the reason they signed the agreement (Cheung, Rowlinson, Jefferies & Lau, 2010)

Intention to create legal relations – the contract will only been binding if there has been an intention to create legal relationships as without the contract cannot be called a legal contract. Therefore it is necessary that there must been an intention to create a legal relationships (McGlone & Stickley, 2012)

Application

The facts of the case:

  • The contract has been for building the tanker for the North Ocean tankers 
  • The contract has been made in accordance with the US Dollars
  • There been the fluctuation of 10 percent in the US Dollars
  • The builder has treated that it can face the loss of $3 million
  • The builder demanded this extra amount from the buyer or he will stop the work
  • Buyer has given its consent due to the fear of strike
  • Buyer made the condition that the tanker must been delivered on time
  • The buyer has not demanded the extra amount paid by him after the nine months of delivery

In the case the contract is valid as per the contract law as there has been offer and acceptance by both the parties in the contract and there has been the valid contract as both the parties has agreed the terms of the contract as per US Dollars. However the US Dollar has been fluctuated it can be said that there must been acceptance of fluctuation in the case as mentioned in the case Blackpool & Flyde Aero Club v Blackpool Borough Council it Can be said that there has been a labour has been included and therefore the contract cannot been void on the rates fluctuations. 

There is a legal relation between the both the parties and also the consideration has been given by the party therefore the contract can been called legal in these terms. There was a intention to create a legal relation and therefore the contract is legal. 

The consent is an important factor and the consent given by the party in duress as due to fear of strike. The consent given in duress will not been considered legal and the excess amount paid by the party is recoverable as established in the case Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 it can be said that although the court dismissed the duress due to circumstances but stated that the contract is not binding when there is duress and in this the party accepts the order due to the fear and cannot be liabvle to pay a extra amount. 

Conclusion

It has been concluded that the contract is valid but due to the consent of an extra amount has been given in duress the buyer is liable to recover the excess amount that has been given by him to the builder. 

Part B

Issue

  • Does the act of the property developer is correct?
  • The contract is enforceable?

Rule

The contract shall be considered when both the parties accept the terms and conditions mentioned as what is offered and what is accepted. The rule under English law suggests that if someone enters into the contract than the elements of the contract must been fulfilled. The breach of the contract is either void or voidable (McGlone & Stickley, 2012)

The contract made under influence is voidable under the Australian Law. But the question arises when there has been the damage has been made intentionally to cause the damage to the economic interests than it is the tort under the Australian Law (Stewart & Stuhmcke, 2010)

The Law of Torts in Australia is based on both Common Law and minor extent to the legislation. The one person sues another person in Tort to correct the wrong done by him. There are some common Law of Torts that are:-

Trespass- The trespass includes battery, assault or the false imprisonment of a person to another person. It can be against the trespass to someone private property (McGlone & Stickley, 2012).

Negligence- The negligence has been said to be the failure of a person in exercising the proper care or an ethical care that is required to be maintained in that circumstances. The harm that has been caused that by negligence is called tort of negligence. The person who has suffered any loss due to the other person negligence can sue that person. In Donoghue v Stevenson [1932] UKHL 100 has been considered as the landmark case of Australia of negligence the case of ginger bottle where the corporation has been found negligent by the Court (McGlone & Stickley, 2012).

Misrepresentation- When someone deceit, defame, innocent misrepresentation or advice negligently to another individual has been considered misrepresentation. In Bisset v Wilkinson [1927] AC 177 case the court stated that the misrepresentation will be proved when there is knowledge to the other party about its whereabouts (McGlone & Stickley, 2012).

Intentional damage to economic interest- when someone intentionally makes any interference with the contractual relation or the conspiracy has been made against the person and the intimidation than it has been considered as the intentional damage to the economic interest of a person. 

In Belmont Finance Corporation v Williams Furniture Ltd (No 2) [1980] 1 All ER 393 case, the conspiracy has been taken as the company was in liquidation and has sued various defendants including their own directors to procure Belmont for buying the shares in other company at a gross overvalue. It was done with the purpose of acquisition of shares in Belmont itself. 

In Lloyd v Grace, Smith & Co Ac 12 [1912] AC 716 in this case the intentional damage has been caused by the person who is the agent and for that principal has been held liable. In this case the plaintiff with the intentionally makes an contractual relation so that it can make cause harm to the defendant. 

Application

The facts of the case:-

  • A solicitor has done a legal work for a property developer
  • The solicitor has presented his bill to the property developer for the payment
  • The property developer gave the suggestion that he will reduce his bill in against he will give some share in his venture
  • The solicitor accepts the proposal
  • The defendant thereafter has refused to accept the agreement that has been made
  • The defendant stated that the contract is voidable as it is made under influence and he is liable to pay his solicitor any profits


The rule suggests that the plaintiff has intentionally damaging the economically interest of the solicitor as to reduce the bill for that share has been offered and as established in the case Belmont Finance Corporation v Williams Furniture Ltd (No 2) it can be said that the conspiracy has been made by the plaintiff.  The property developer cannot say it as the breach of the contract as making contractual relations intention with the mean to cause harm is a civil wrong and cannot be treated correct. 

The solicitor has also been misrepresented as the rule suggests that if any misrepresent and advice negligently than he will be liable for the torts and in this case the property developer has misrepresented the case that there are various laws that there has been the case As established in the case Bisset v Wilkinson it can be said that the defendant has been misrepresented in this case and has been held liable for the case. 

It has also been said with the intention to cause damage the contractual relations has been made as established in the case Lloyd v Grace, Smith & Co that has been established in the case. 

Whereas Solicitor has the duty towards his client to do his work and deal in the profession relations. However the negligence established in the case Donoghue v Stevenson it can not be said that the solicitor is negligent. 

Conclusion 

It can be said that the contract is enforceable and it has been binding on both the parties and the property developer has been liable to pay the shares to the Solicitor. The property developer is not correct because it is not the breach of the contract but the civil negligence.

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