Subject Code and Name
LAW6000 Business and Corporate Law
Assessment 2 Case study
2000 words +/- 10%
This assessment addresses the following subject learning outcomes:
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 you are required to critically analyse. With respect to each case study:
Your analysis should refer to appropriate cases and statutes and be referenced using the APA Reference system.
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 realised) 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.
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 Smalltown 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 Smalltown Council. Please explain fully, using relevant case law.
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.
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 goods will 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.
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