Assessment Task – Tutorial Questions
Unit Code: HI6027
Unit Name: Business and Corporate Law
Assignment: Tutorial Questions 1
Due: 11:30pm 29th May 2020
Weighting: 25%
Total Assignment Marks: 50 marks
Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in
this unit
Unit Learning Outcomes Assessed:
1. Critically examine the main features of the Australian legal system;
2. Critically examine the foundations of Australian company law;
3. Critically discuss and apply contract and tort law in business circumstances;
4. Critically analyse the concept of corporate internal rules and management;
5. Critically discuss and apply the legal framework that regulates a company’s dealings with
outsiders;
6. Analyse the interaction between members’ rights, directors’ duties and corporate governance;
7. Analyse the procedures regarding external administration and winding up.
Description: Each week students were provided with three tutorial questions of varying degrees of
difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard.
The Interactive Tutorials are designed to Help students with the process, skills and knowledge to
answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for
weeks 1 to 5 inclusive and submit these answers in a single document.
The questions to be answered are:
Week 1
Explain the distinction between Exclusive Powers, Concurrent Powers and Residual Powers, which are
outlined in the Australian Constitution. Give an example of each power. (10 marks, maximum 300
words)
Week 2
You are in the train station waiting for your train to arrive. You see a vending machine from where you
can buy snacks and chips for $3.50. Posted on the machine is a sign saying: “Property of XYZ
Vendsolutions Pty Ltd”. You insert the coins required into the machine and out comes a packet of
chips. However, when you open the packet of chips, you find bits of plastic inside and you don’t want
to eat the chips. You want your money back.
Required:
With reference to the essential elements for the formation of a contract, explain:
a) Did you enter into a contract in this scenario? (5 marks, maximum 500 words)
b) If your answer is yes, with whom did you enter a contract? (5 marks, maximum 150 words)
Week 3
What are the common law rules regarding contracts entered into by infants, and when are such
contracts valid, voidable or void? (10 marks, maximum 300 words)
Week 4
Explain the operation of the contra proferentem rule. Is such a rule defensible in today’s business
environment? (10 marks, maximum 300 words)
Week 5
In September, Amina hired Bryan as a delivery man. Bryan was to commence work on 1 November.
On 1 October, Amina wrote to Bryan telling him that, despite their agreement, economic
circumstances were such that she no longer required his services. Can Bryan sue Amina? Explain your
answers in light of the principles learned on breach of contract. (10 marks, maximum 500 words)
Submission Directions:
The assignment has to be submitted via Blackboard. Each student will be permitted one
submission to Blackboard only. Each student needs to ensure that the document submitted
is the correct one.
Academic Integrity
Academic honesty is highly valued at Holmes Institute. Students must always submit work
that represents their original words or ideas. If any words or ideas used in a class posting or
assignment submission do not represent the student’s original words or ideas, the student
must cite all relevant sources and make clear the extent to which such sources were used.
Written assignments that include material similar to course reading materials or other
sources should include a citation including source, author, and page number.
In addition, written assignments that are similar or identical to those of another student in
the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy.
The consequence for a violation of this policy can incur a range of penalties varying from a
50% penalty through to suspension of enrolment. The penalty would be dependent on the
extent of academic misconduct and the student’s history of academic misconduct issues.
All assessments will be automatically submitted to SafeAssign to assess their originality.
Further Information:
For further information and additional learning resources, students should refer to their Discussion
Board for the unit.
Business and Corporate Law Tutorial
Week 1
Exclusive powers are the law-making powers that are granted only to the commonwealth parliament, and no State has exclusive powers to make such laws. These laws mainly involve immigration, defence, and currency. Thus this means that these laws cannot be made in any specific state in Australia but only by the Australian Commonwealth Parliament (Taylor 5). The Australian States to not have exclusive powers to make such laws as the Constitution only allows the Commonwealth parliament to have exclusive powers.
Concurrent powers are law-making powers given to the Commonwealth powers but are not exclusive to the Parliament and can be shared by the state. Thus, this shows that states in Australia have concurrent powers to make laws as they are not exclusive to the Commonwealth Parliament only (Steytler 1). Concurrent powers involve law-making powers concerning marriages and bankruptcy. However, the laws made by the Commonwealth Parliament are superior to those made by the States such that if the laws of the State conflict with those of the Commonwealth, the Commonwealth Parliament laws override those laws.
Residual powers are not contained in the Australian Constitution. They constitute powers which were not transferred to the Australian federation. In this case, these powers existed during the colonial era, and colonies wanted to retain their law-making powers as they did not intend to give all the authority to the Commonwealth (Fitzpatrick et al 1). Some of the residual powers include law-making powers with regards to education, civil and criminal law, urban planning, and health.
Week 2
Part A
Issues
The issue, in this case, involves whether the purchase of snacks through a vending machine amounts to a contract. An aggrieved party is a person who has bought chips through a vending machine, but those chips did not amount to chips as there were plastics in the chips, making it difficult to consume. Therefore, it is important to determine whether there was an existing contract between the purchaser and the vendor. Also, this is to examine if a contract exists between a customer and a machine. Perhaps, this involves a specific issue in law that needs material facts to determine the existing contract.
Rules
A contract is formed when there is an offer, consideration, and acceptance. An offer means that one of the parties in a contract makes a promise to perform something or deliver something as was the case in AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454 (Supreme Court of NSW). An offer may constitute a supply of goods or performance of service. Consideration means that something of value will be exchanged for the performance of the specified action or promise. Consideration may in the form of monetary expenses or effort, a promise to deliver the service or an agreement not to perform anything. Therefore, if a consideration exists, then it means a contract will exist between the two or more parties involved.
Moreover, acceptance involves acceptance of the offer, which may be express or written and is based on the terms of an offer. Hence, these three aspects are required for a contract to be formed between two parties. Also, the contract will only be accepted if the communication is done among the parties involved, as was held by Justice Bowen CJ in the case of Bressan v Squires [1974] 2NSWLR 46. Bowen CJ said that a contract cannot be concluded until communication of acceptance has been made between the contracting parties.
Application
In this case, the offer involves the sale of chips, and the consideration involved in the payment of money. Therefore, if there are an offer and consideration, acceptance is also required to complete a contract. The purchaser, therefore, wanted the chips and was to obtain them by paying some money to the vending machine to obtain the chips. Therefore, since the goods did not meet the standards required, the purchaser did not take them. Thus, the vending machine represents the offer, and the money is the consideration while the acceptance involves inserting money into the machine. Perhaps, this involves a contract entered into between a purchaser and the vending machine, as was held in the case of Thornton v Shoe Lane Parking [1972] 2 WLR 585. In this case, it was held that the machine itself constituted an offer, and acceptance was by putting money in the machine.
Conclusion
There was a contract between the purchaser and the vending machines. Perhaps this involves contracts entered into with machines. Therefore, these contracts exist since there are an offer and acceptance, as well as a consideration that involves money. The contract is completed when a customer inserts the money into the vending machine.
Part B
The contract that exists, in this case, involves the contract between a customer and the vending machine. Also, since the vending machine was owned by XYZ Vendsolutions Pty Ltd, then the contract was between the customer and the property owner. Perhaps, if it were a to be challenged in a court of law, the customer would sue the vending machine owner who was responsible for ensuring the chips in the machine are of the best quality and standards for consumption by people. Contract with machines are allowed in common law since such contracts constitute a promise, and the promise is accepted by a consideration of money. Therefore, the customer can sue the vending machine owner (XYZ Vendsolutions Pty Ltd) based on contractual obligations for failing to provide the best quality chips for consumption, as was held in Thornton v Shoe Lane Parking [1972] 2 WLR 585. Thus there was an existing contract between the customer and XYZ Vendsolutions Pty Ltd.
Week 3
A minor is a person who is below the legal age of an adult. The common law provides several rules regarding valid, void, and voidable contracts with minors. The general rule of contracts with minors that the contracts are voidable by minors. The common-law rules were introduced in order to protect young people who do not understand the terms of certain contracts (Harun et al. 1). The common law further provides that minors have no capacity to contract. The laws further provide that the minor is the only one with the discretion but not the other contracting party in that particular contract. Therefore, this rule grants the minor a right to void a contract even though it is a valid contract. Perhaps, this means when a person enters into a contract with a minor has to understand a minor can repudiate the contract at his or her discretion.
Valid contracts with minors involve contracts for goods and services that are considered necessaries. A contract with minors relating to necessaries is not voidable, for example, safety, food, and clothing. In determining valid contracts with minors, the common law requires minors to pay fair market value for the goods and services that are considered as necessary (Fitzpatrick 1).
Moreover, an infant can be only avid a contract when he or she is still a minor. Therefore, this shows that minors can only void a contract for a few time after attaining the age of 18. If the minor does not disaffirm the contract within that reasonable time allowed by law, the court may fail to void the contract if the minor has attained the age of 18, and this may constitute non-performance of a particular contract.
Week 4
Operation of Contra Proferentem Rule
Contra proferentem rule is a legal doctrine in the laws of contracts that stipulates that whenever a clause is considered as ambiguous against the interest the parties that created, or introduced or requested for the clause to be included. The contra proferentem rule is mainly applied when contracts are challenged in a court of law (McCunn 483). In this case, the rule is applied since each party to a contract wishes to identify the best possible way to protect his interest in the contract; thus, the language used in a contract is expected to benefit each party to it. Due to this, ambiguity may arise, making it challenging for one party to interpret the contract as the other party.
The contra proferentem rule is defensible in court only if the contract shows the ambiguous nature of the contract language used. In this case, the court needs to identify whether the ambiguous clause exists in a particular contract. By so doing, the court identifies the ambiguous term then establishes why the clause was introduced in that particular contract. The ambiguous clause will be evaluated in the court to determine the intention of the party that drafted the ambiguous clause. Therefore, the matter in court will be dependent on the material facts obtained from the analysis of the ambiguous clause. If there is sufficient evidence that the introduction of the clause by the drafting party was not to not to be ambiguous, then the contract will be applied as per the clause. Perhaps, this shows that the burden of proof is on the drafting party to present to the court that the ambiguous clause was added in the contract, but its intention was not to make the contract ambiguous. Eventually, this shows that the contra proferentem rule is defensible in court on matters relating to contracts in the current business environment.
Week 5
Issues
Bryan had been hired by Amina as a delivery man. Bryan was set to begin work on 1st November, but Amina dismissed him on 1st October. Amina argued that his services would not be required as a result of the harsh economic conditions. Therefore, the issue, in this case, involves whether dismissal amounts to a breach of contract. Therefore, this dismissal will be considered by examining the general rules relating to a breach of a contract.
Rules
A breach of contract is a material non-compliance with a legally binding contract. Therefore, a breach arises when one of the parties involved in a contract does not perform as per the terms of the contract. There are three elements considered while determining the breach of a contract. First, a court of law needs to determine whether there is a legally binding contract between one or more parties. A legally binding contract is either by express or written, and thus the aggrieved party needs to prove to the court that there was a legally binding contract (Marsh 80). Secondly, to determine a breach of the contract, the court must be satisfied that there was non-compliance with one of the legally binding terms of the contract. The terms of the contract might be express or implied, for example, one party failing to perform as per the terms of a particular contract. The third element is that the court has to be satisfied that the express or implied term amounts to a warranty, condition, or an intermediate-term in a contract. Thus, if there are these three aspects of a breach, a plaintiff has a cause of action to sue for breach of contract, as was the case in W. Distributors Co. v. Diodosio [1992] 841 P.2d 1053, 1058. It was held that the burden of proof lies in the hands of the plaintiff to obtain a remedy for a breach of contract.
Application
Therefore, the aggrieved party is required to prove to the court that the existence of the elements of a breach of a contract. Perhaps, there was an existing contract between Bryan and Amina, which Bryan was to work for Amina as a delivery man as from 1st November. However, Amina ended the contract before even the stipulated time of the offer was started. Therefore, in this case, the contract was breached through writing as a letter was written to Bryan to notify him of his dismissal. Also, the breach was made before the due date when Bryan had not started working for Amina.
Conclusion
Bryan can rely on the elements of a breach to sue Amina for breach of contract. However, Bryan needs to prove to the court the material facts relating to the breach in order to qualify for compensation. All grounds involving a legally binding contract, failure to perform a term, the term amounts to a condition or warranty in a contract as well as there was the loss suffered. By doing so, the court will grant a remedy for compensation to Bryan from Amina for terminating his contract before the due date.
Works Cited
Case Law
AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454 (Supreme Court of NSW)
Bressan v Squires [1974] 2NSWLR 46
Thornton v Shoe Lane Parking [1972] 2 WLR 585
W. Distributors Co. v. Diodosio [1992] 841 P.2d 1053, 1058
Articles
Fitzpatrick, Jeff, Symes C, Veljanovski, A & Parker, D. Business and Corporations Law. 3rd Edition. LexisNexis Butterworths, (2017).
Harun, Noraida, et al. “Minor’s Capacity to Contract in Malaysia: Issues and Challenges.” INTERNATIONAL JOURNAL OF ACADEMIC RESEARCH IN BUSINESS AND SOCIAL SCIENCES 8.12 (2018).
Marsh, Peter. “Contract law.” Contracting for project management. Routledge, 2017. 65-80.
McCunn, Joanna. “The Contra Proferentem Rule: Contract Law’s Great Survivor.” Oxford Journal of Legal Studies 39.3 (2019): 483-506. https://doi.org/10.1093/ojls/gqz002
Steytler, Nico, ed. Concurrent powers in federal systems: meaning, making, managing. BRILL, 2017.
Taylor, Greg. “Australia.” Characterisation in Federations: Six Countries Compared (2006): 5-26.
