MLC101 Law for Commerce Trimester 1, 2019Assessment Two – Case Study
PERCENTAGE OF FINAL GRADE: 25%
| Unit Learning Outcome (ULO) | Graduate Learning Outcome (GLO) |
| ULO1: Apply key principles of law for commerce to recognise and evaluate legal issues. | GLO1: Discipline-specific knowledge and capabilities GLO4: Critical Thinking |
| ULO2: Interpret and analyse a range of legal issues and the bearing they have in commerce | GLO1: Discipline-specific knowledge and capabilities GLO4: Critical Thinking |
| ULO3: Use appropriate digital technologies to search, retrieve and apply relevant information to law for commerce. | GLO3: Digital Literacy |
| ULO4: Identify critical legal issues in the international context that have a bearing on business ethics, standards and practice in Australia | GLO8: Global Citizenship |
OVERVIEW OF THIS ASSESSMENT
Your task is to provide analysis and evaluation of the legal issues posed in the case study below, drawing on the legal principles covered in Topics 4 & 3 (for scenarios one and two respectively) and on the effect of international legal instruments on commercial practices in Australia (scenario three). For scenario one, no research is required, as it is based on your course materials. Scenario two is also based on your course materials but further research (beyond the textbook) will most definitely enhance the quality of your submission. Scenario three is completely research based (as there are no international law topics in the unit). If you wish to score a very high grade for this assessment, it is strongly advised that you conduct your research well.
You must correctly reference for this assessment but do not reference powerpoints or the study guide. Cite cases and legislation (including international legal instruments) in full. Your answer to scenarios two and three must be researched and referenced using the Deakin Harvard style of referencing. The cases in scenario one must also be included in the reference list.
The word count for this assessment is 1500 words (including headings, sub-headings and in-text citations, but DOES NOT INCLUDE references in the Reference List). There is a +10% leeway. In other words, the maximum word count is 1650. There is no minimum word count but the quality of your work may be compromised if you do not reach the word limit. Submissions outside the word count leeway may be penalised.
CASE STUDY: MR TWADDLE AND PIPPOP LTD.
Scenario One
Mr Twaddle is a businessman and is looking to purchase a new printing machine which will be able to output more than 10,000 sheets of paper per day. He contacts PipPop Ltd (PipPop), the largest company in Warrnambool that, among other businesses, manufactures printing machinery. PipPop’s sales representative suggests the Speedway machine, which she says, in her opinion, should be able to output 15,000 sheets per day. Based on that statement, Mr Twaddle bought the Speedway machine and secures several large printing jobs, which require him to be able to print between 12,000 and 15,000 pages per day. Once it is in use, the Speedway machine is only able to print 10,000 pages per day. Mr Twaddle contacts PipPop to obtain a refund. PipPop deny any liability and point to their written contract, which states that the printing capacity of Speedway is 10,000 pages per day.
Can Mr Twaddle hold PipPop to the verbal statement of the sales representative? Advise Mr Twaddle.
Please use case law to support your answer. DO NOT DISCUSS FRAUDULENT OR INNOCENT MISREPRESENTATION, IMPLIED TERMS OR THE AUSTRALIAN CONSUMER LAW.
Note: Research is NOT required for this scenario. Please rely on the course materials in Topic 4 (Chapter 9) to answer this question.
Suggested word count: 300 to 400 words
Scenario Two
Mr Twaddle decided to acquire a sushi bar business. He borrowed heavily to purchase the business. The business was located in the premises leased from the landlords, who happened to be PipPop. The lease of the premises was due to expire but it contained an option to renew, which Mr Twaddle knew about. Nevertheless, after Mr Twaddle took over the business from the seller of the sushi bar, he failed to exercise the option to renew the lease. As a consequence, he was left with the prospect of substantial loss.
PipPop initially refused to extend the time for the exercise of the option. However, after negotiations, PipPop agreed that they would extend the option for a sum of $50,000. Mr Twaddle made the payment in protest and then renewed the lease.
Mr Twaddle knows that you are studying Law for Commerce at Deakin University and comes to you for advice as to whether he has a strong case against PipPop for unconscionable conduct.
Advise Mr Twaddle.
Please use case law to support your answer. DO NOT DISCUSS THE STATUTORY PROVISIONS IN THE AUSTRALIAN CONSUMER LAW.
Note: Research is required for this scenario. You may rely on the course materials in Topic 3 (Chapter 7) to answer this question, but it is also expected that you research beyond the course materials.
Suggested word count: 500 to 600 words
Scenario Three
PipPop also sells its printers overseas. Mr Twaddle’s brother runs a very successful printing business in Singapore called UltraPrint. UltraPrint requests that PipPop designs and manufactures three special commercial printers that will be able to output more than 50,000 sheets of paper per day to keep up with demand. PipPop is very excited about the project, having yet to design and manufacture anything that can print more than 20,000 sheets of paper per day. PipPop is aware of its liability under the Australian Consumer Law, but the contract with UltraPrint specifically states that ‘international legal conventions in relation to the sale of goods must be adhered to’. PipPop comes to you because it would like to know the following:
Please cite the specific international convention and articles in support of your answer.
Note: Research is required for this scenario. The course materials DO NOT provide the answers for this scenario because of the International Law component, which is not taught formally. This particular question focuses specifically on ULO4 – which requires students to recognise that international legal standards have a bearing on commercial practices in Australia.
Suggested word count: 500 to 600 words
Legal case Law
Scenario One
Can Mr Twaddle sue on the basis of the verbal statement of the company’s representative?
What are the other areas which could be used by Mr Twaddle to sue the company?
In the given scenario, there was both a written and verbal contract between the parties. A verbal contract is an agreement in which the parties have been agreed by spoken communication and on the other hand a written contract is an agreement recorded and signed by the parties (Patti, 2017). The written contract is considered to be enforceable by law if there is a free consent of both parties and there is a consideration between the parties. In the given case Mr Twaddle was looking for a printing machine which will be able to print 10000 pages per day. When he contacts to the PipPop Company to buy a printing machine, the sales representative of company said that the Speedway machine is able to print 15000 sheets per day. Mr Twaddle had believed the verbal statement of the sales representative of PipPop and went into a purchase contract with the company. As held in the case of A M Bisley & Co Ltd v Thompson [1982] 2 NZLR 696 , it is found that a party could sue on the basis of verbal contract if he has enough evidences to prove the facts of agreement but if there is a written contract then it overrides the effect of verbal contract between the parties.
Here the parties have a written contract which states the actual capacity of printing machine. Hence Mr Twaddle cannot sue on the basis of the verbal statement of the company’s representative. As per the law of contract an oral contract is also binding on the parties if it is made with the consent of both the parties and fulfils all the conditions of contract which makes it enforceable by law. But there was only an oral statement made by the seller not an agreement.
Mr Twaddle can only claim against the facts mentioned under the written contract (Smith, 2018). He is not be authorised to act against other acts which are not mentioned in the written contract. Therefore, only acts and conditions which are written in the contract can be asked for the claim by Mr Twaddle.
Scenario Two
Does Mr Twaddle has strong point to sue against PipPop?
In this case, Mr Twaddle acquired the sushi bar business from a business owner by borrowing a huge amount. While making the transaction he found that the premise on which the business unit was situated is belongs to PipPop. He also knew about the fact that the lease was about to expire and he has the option to renew the lease. After acquiring the sushi bar business, he failed to exercise the option of renewal and PipPop also refused to extent the time limit for the exercise of the renewal option. It results into a heavy loss to Mr Twaddle. However after negotiation PipPop gave its consent to extent the option against the consideration of $50000 and Mr Twaddle renewed the lease by paying such amount to PipPop. Being a law student we will suggest Mr Twaddle that the lease contained the option of renewal but the option was not exercise within the time period allowed under the lease agreement. After the expiry of time period to exercise the renewal option, the landholder obtained the right to either end the lease or to extent the time for exercise the renewal option by tenant to make the lease continue for further period of time. In the given case the landlord agreed to extent the option of renewal of lease i.e. to renew the lease for further period of time (Lewis, 2016).
The renewal of lease occur some charges of renewal which has to be paid by the tenant. Here the renewal option was left unexercised by Mr Twaddle so that he cannot held liable to the landlord for the same. As in the case of Markholm Construction Co Ltd v Wellington City Council [1985] 2 NZLR 520, it was held party can claim for the given amount to landlord if there was no provision regarding the payment of such amount or the landlord had imposed any irrelevant amount liability on him. On other hand if the landlord charged $ 50000 from Mr Twaddle as renewal charges and the amount was within the determined limits under the act then Mr Twaddle has no strong point to file a case against PipPop. The landlord can also decrease or increase the annual rent of lease under the criteria defined by the law.
These are the rights of landlord under a lease agreement which he can exercise without any intervention and tenant has no right to sue against these rights (Botha, & Scheepbouwer, 2015). Also the tenant can sue against his landlord if he restricts him by enjoying any right attached with the lease or abruptly increases the rent of premises which is irrelevant. Hence Mr Twaddle has no strong point to sue against PipPop.
Scenario Three
Issues
What will be the designing the printing machines by PipPop in the absence of both verbal and written clause about the date of delivery of printers?
In the given case, PipPop deals at overseas level to sell the printers and Ultra print runs its printing business in Singapore. Ultra print gives an order to PipPop to design three special printers with the printing capacity of more than 50,000 sheets per day. Now to fulfil such business order successfully, PipPop needs to know about the laws applicable to such contract of sale. 1. In the case of Isaac Naylor & Sons Ltd v New Zealand Co-operative Wool Marketing Association Ltd - [1981] 1 NZLR 361 it was held that to transact such business it is required for PipPop to follow the rules of domestic laws of both countries as well as the regulations of United Nations Convention on contracts for the international sale of goods. It is a treaty accepted by 90 states worldwide and an international sales law. All these 90 contracting states are bound to follow the sales law defined under such treaty while performing any international transaction of sales (Cartwright, 2016). Also PipPop is liable to consider the Australian Consumer Law while performing such transaction as the purchasing party is running its business in Australia 2. The applicability of Convention depends upon the contract of sales executed between the parties. Generally, The United Nations Convention is applicable to the contract because it’s a cross border sale transaction nature and all the members under such treaty are liable to follow the convention. 3. However the applicability of such convention may be avoided if the parties expressly describe it in the contract.
As held in Ballance Agri-Nutrients (Kapuni) Ltd v The Gama Foundation (2005) 5 NZCPR 16, it is found that If parties have mentioned under the contract of sale that they will only liable to follow the provisions under domestic laws then no rules of convention will apply to their contract of sale. 4. If the date of delivery for the printers is not mentioned under the contract then PipPop can take the required time to manufacture the printers but if there is any verbal agreement between the parties regarding the delivery of printers then PipPop should consider such date as date of delivery. Although it is not binding on PipPop but to fulfil the contract within considerable time, it can consider the verbal statement as binding. In the absence of both verbal and written clause about the date of delivery of printers, PipPop can take the enough time as it requires in designing the printing machines but the time taken should be reasonable.
This shows that contract is bidding on the parties to the contract and all the parties to the contract has to perform their duties. Nonetheless, other party could seek remedies if the party to the contract fails to meet the terms and condition sets out in the contract. However, it is the fact that the applicability of Convention depends upon the contract of sales executed between the parties so parties to the contract needs to act accordingly.
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