Legal Issues In Business Law

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Question :



Answer the following questions with reference to the relevant common law and equity principles operating in Australia concerning contracts plus related and other transactions. Do not consider the effects of legislation potentially applicable other than that specifically identified. Students may make whatever additional factual and/or legal assumptions are necessary or convenient. And students must write about 1500 words (+/- 10%), or about 750 (+/- 10%) words per 15 mark allocation.

Assessment Task

Question 1

The University of Millennia called for tenders for supplies of green seed for its surrounds, with a closing date of 1 June.

The following tenders were submitted: • Greenland hand-delivered its tender on 29 May, which went into the tender box. • Enviro posted its tender on 15 May. This letter was received by the University on 17 May, but, by being submitted so early, one of the administrative assistants filed it with the intention of later putting it in the box when she was properly organised. • Plant Forever posted its tender on 30 May. This letter arrived on 2 June but nevertheless was put into the tender box.

It transpired that only two of the tenders were considered by the relevant administrative officials of the University. Although the tender by Enviro was the lowest and contained the most attractive features, the administrative assistant forgot where she had filed it and did not find it again until a week after the decision was made.       Greenland’s tender was the next lowest, but because of rumours about its unreliability, the University awarded the contract to Plant Forever. The University posted a letter to Plant Forever advising that its tender was successful. Unfortunately, this letter never reached Plant Forever because it was destroyed by a disgruntled postal worker who had just been made redundant. Since it had not heard from the University, Plant Forever instead committed its full stock of seed to another contract with a regional council. The University became aware of the full situation concerning the tender by Enviro and the position in which Plant Forever now finds itself. It seeks advice concerning its contractual position in relation to all three tenders.

Question 2

On 1 October Footloose Pty Ltd placed the following notice in the Daily News newspaper: Special Shoes Special Discounts Footloose Pty Ltd is awaiting the delivery of the latest summer collection shoes from Italy. Styles include the new slingback sandals and wedge heels. Prices start at $2000 per hundred pairs (certain styles only); big discounts may be negotiated for bulk orders. All inquiries to Ms Simone, Sales Manager, on 1400 765 432 or by fax on 06 9234 567. On 2 October Famous Footwear sent the following fax to Ms Simone: We accept your offer in the Daily News. We wish to order 500 pairs at $2000 per hundred. Details on delivery to follow. On 4 October James, the owner of shoe retailer James’s Shoes, which had several regional stores throughout Australia, sent the following fax to Ms Simone at Footloose: We refer to your notice in the Daily News and would like to purchase 2000 pairs of slingback sandals. Our best price is $30,000 including GST and delivery. Please advise.  On 6 October Ms Simone sent the following fax to James:  Footloose will sell 2000 pairs of slingback sandals for $30,000, excluding delivery. Payment by cash or bank cheque is due on delivery. Please advise.   James immediately wrote the following letter to Ms Simone, which was mailed on 8 October: We refer to your fax of 6 October and are prepared to meet you on those terms. Please let me know the earliest delivery date.  On 10 October Ms Simone telephoned James. After a short discussion James faxed Ms Simone a copy of the letter of 8 October. The parties agreed that James’s Shoes would take delivery of the sandals from Footloose’s Sydney warehouse on 1 November.  Referring to relevant case law and giving reasons for your propositions, discuss the legal effect of each of the forms of correspondence between Footloose, Famous Footwear and James’s Shoes that took place between 1 October and 10 October.


You will have shown evidence of the following: 

• the written expression is poor and difficult to understand 

• the answer is poorly organised 

• referencing is generally inadequate 

• lack of familiarity with the legislation and its application 

• failure to identify and address the issues in the question

• reasoning and application demonstrated is poor.  


You will have:

• made a conscientious  attempt to address the topic and/or answer the question 

• shown evidence of having done the required reading and of having understood the reading 

• presented  a reasonable argument to back up your conclusions 

• demonstrated a reasonable level of spelling and grammatical usage 

• used referencing but this may need improvement 

• issues that may need to be identified and addressed in more depth.


You will have:

• addressed the topic and/or answered the question directly 

• presented soundly based arguments and backed these up with reasons 

• gone beyond description to analysis of key issues 

• used the English language well 

• shown evidence of reading widely 

• demonstrated understanding of the reading 

• used referencing that is satisfactory


You will have:

• met the above criteria for a credit 

• demonstrated the attainment of a high degree of understanding of the concepts of the course 

• demonstrated deep insight into the application of knowledge and skills acquired to complex theoretical and practical situations 

• used referencing correctly 

• made reference to all appropriate legislation

High Distinction

You will have:

• met the above criteria for a distinction 

• demonstrated the attainment of an outstanding level of achievement regarding the objectives of this course 

• demonstrated an interesting and/ or original approach/ idea/ argument 

• demonstrated mastery of the relevant referencing system

• ensured conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues

 • ensured references are made to the appropriate legislation for particular issues.

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Answer :

Question 1

The case study being delineated in the context of this question is purposive for raising different legal issues. Amongst these, intention of the University for creating legal relations with different seed stocking organizations will definitely be in the forefront. Tender process is a medium through which individual can achieve procurement of goods and services. Contract law of Australia would be in a good agreement with such situation where exchange of goods and services are accomplished via medium of valid contract. 

According to the principles being provided by different contract laws prevailing in Australian territories such as Contracts Review Act 1958 (Vic) or Frustrated Contracts Act 1978 (NSW), another party forms a valid contract only when there is an ascertainable offer being made by a part followed by acceptance of that offer. There has to be common intention between the involved parties so that a legally valid agreement can be formed. This action has to follow provision of a consideration. However, request for tender is prerequisite for entering into a legal contract. On this ground, it can be propounded that University of Millennia has a close intention of establishing legal relations with any of the organizations been asked to participate in tender process. Since, there was no interchange of a sum of consideration among the individuals, thus, there was no legal relations been established between the parties. Therefore, no party can take legal actions for breaching a valid contract. It is thus, apparent that tendering process is preceding contractual relationship between the university and seed stocking organizations. 

In this context, tender bidding process being adopted by the Millennia University has to be equipped with some basic characterization of call for tender bidding. The characterization in this relation may be depicted as collaborating with chosen supplier so that contract can be realized with agile mentality. Apart from that, ensuring transparent pricing is also contextual in this context. This apparent move of Millennia University would create a collaborative legal relation with any of the suppliers namely Enviro, Plant Forever and Greenland. Precisely, it can be stated that prime intention of the University for entering into tendering process is locating preferred supplier so that contractual agreement can be provisioned in future for having a benefit on goods or services. 

However, it is worthy of being mentioned herein that tender request is not an offer that can serve the purpose of contract formation. Instead of that, tender request may be treated as an invitation for treatment. In this relation, the requestor namely the Millennia University can approach this tender process for making their offer with valid contract. As for example, in the case citation namely Pratt Contractors Ltd v Palmerston North City Council [1995] 1 NZLR 469 per Gallen J at 478-479 it can be found that the initial tender bidding was only considered as an invitation for treatment and contractual obligations were nowhere in that case. In this context, tender offer may be defined as public solicitation towards the designated shareholders so that they can reasonably tender stock for selling at a defined price during a specific time. However, in the current scenario, call for participation in the tender process cannot be considered as a valid offer. Nevertheless, without a valid offer and acceptance, no legal agreement can be enforced and that is extremely relevant in this case. 

On this ground, it can be further stated without ambiguity that there was no legal agreement between the University of Millennia and any of the selected suppliers. As evident, since legal agreement was absent in due course of the whole process of tender bidding, contract law breaching cannot be entitled by the university authority in this course. From the case scenario, it is evident that Plant Forever is already engaged with its stock to another party and thus, this supplier would not be able to entertain any further request of University of Millennia to go with their tender request. 

Rationally speaking, Millennia University is not holding a sufficient legal ground on behalf which they can approach legal remedies as per the Australian contract laws. In this context, it is worthy of being noted that failing to entertain due consideration in this tender process by the University of Millennia is responsive for scapegoating. Misunderstanding between the supplier and purchased is duly assigned with such misconduct of tender process. Thus, competitive tendering process, which is required by the university authority, would not be enforced any more due to stifled communication. 

Contractual position of Millennia University is totally menaced as evident from the case scenario. In this relevance, it can be argued that since Plant Forever is engaged with another purchaser, so this organization cannot be approached any more. Accordingly, university has to select between rests of the two. Since, Greenland’s tender is not reliable with respect to specific requirement of Millennia University, therefore, university can surely go with tender of Enviro whose tender was observed to be lowest and equipped with interesting features compliable with requirements of Millennia University.       

Question 2

From the case study, it can be noted that Footloose Pty Ltd. published their advertisement in the newspaper on 1 October about their footwear products. In this context, Footloose Pty Ltd. provided the information in the newspaper that for every special purchase there will be special discount for the buyers. In this regards company provided the fax and mobile number of responsible person related to the information about discount. From this perspective, it can be stated that Footloose Pty Ltd. needs to maintain the advertising and selling guide of Australia by which this company will be able to fulfill the requirement of different legal criteria related to advertisement. 

According to this guideline, it can be stated that in order to maintain normalcy of advertising process Footloose Pty Ltd. needs to provide authentic information related to discount according to the legal rule of Competition and Consumer Act 2010Similar case can be seen in the case of TPG internet provider of Australian for misleading their customers by providing fake information in the advertisement. Hence, in this case Footloose Pty Ltd. needs to provide relevant and authentic information in their advertisement in order to prevent the chances of information breach.

According to the case study of 2nd October of  it can be observed that based on the advertisement of Footloose Pty Ltd. it can be stated that in this case this company needs to maintain the rules of Australian Consumer Law and Fair Trading Act 2012. It can help Footloose Pty Ltd. to maintain regulatory actions related to order and delivery process. Problem related to improper contract can introduce conflict among involved parties of the business and due to this reason, it can introduce barrier in the process of order and delivery. Similar barrier in contract can be seen in AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454 (Supreme Court of NSW)Due to the reason Footloose Pty Ltd. needs to maintain legal rules related to contract making.  

From the situational analysis of the following incidents ranging in between the date of 2. October to 10 October, it can be stated without ambiguity that a valid and legal contract formation is being approach by both the parties namely Footloose Pty Ltd and James’s Shoes. At the starting of their offering by Footloose, they have clearly demonstrated that per hundred pair of definite styles of shoes will require $2000. It is also been mentioned in that advertisement that for bulk ordering, discounts would be provided.  On this ground, it can be stated that Footloose has maintained all the regulations of Australian Consumer Law and Fair Trading Act 2012James’s Shoes has approached this offer with an apprehension that since they are offering a bulk purchase from Footloose Pty Ltd, thus, they are eligible for accessing discounts at an optimized level. On this ground, James has communicated via fax with a proposal that they would purchase 2000 pairs of slingback sandals at the price of $30000 and this price has to include delivery charges as well as GST charges. However, the fax message being sent by Mr. James has argued for an advice from Ms Simone concerning this proposal. 

Ms Simone has approached James's Shoes on 6 October with a negotiation that they are accepting that price, but exempted of delivery charges. Ms Simone can definitely argue with a viewpoint that in the early advertisement it was been stated that per 100 pairs of shoes would cost $2000 and for bulk ordering, special discount will be given. According to this price, 2000 pair’s shoes are costing $40000 and hence, big discount of $10000 is already given. On this ground, Ms Simone can definitely negotiate with Mr. James for attracting extra delivery charges. On 8 October, Mr. James has forwarded a mail to Ms Simone by stating that his organization is forwarded in that agreement to meet all criteria being provisioned by Footloose. A copy of agree letter is being mailed on 10th October which is further ensuring that a legal contract is being made between these two parties. A communication of offer and acceptance is being followed in this case scenario and the electronic medium such as fax is evidently serving as the medium of communication. In this correlation, it can be entitled that Electronic Transactions Act 1999 would be playing crucial role in this legal and valid agreement

According to this act, electronic communication media are extremely valid under the Australian Commonwealth law and are accounted as instantaneous mode of communication. Evidently, the mail being forwarded by Mr. James to Ms Simone is included with acceptance of the offer in handwritten format along with handwritten signature. Letter copy of 8 October is being forwarded in that fax in the form of material document. Thus, on this ground, it can be argued that this agreement being established through electronic communication is a valid agreement that is fulfilling the requirement of a valid contract between two parties. Electronic Transactions Regulations 2000 is also influential in this context

In this connection, both the parties entering into this agreement can take sections 18 and section 41 of the Competition and Consumer Act 2010 (Cth), schedule 2 into account. Mooney v Williams [1905] HCA 34, this case law may be instanced as well in this regard that would imply that James’s Shoes has provided a qualified acceptance of the offer of Footloose Pty Ltd with all their terms and conditions.