Business Law Assignment Analysing Cases Based on Corporate Law
Task: Write a reflective journal on computer architecture assignment analysing the theoretical concepts captured from the weekly material.
Business Law Assignment Answer 1
Luke works as a food courier for a company called “2 Your Door “. He delivers the meals on a bicycle.
“2 Your Door” gives training to new couriers about the road rules including informing them that it is an offence to ride a bicycle on a footpath if you are 18 years or over.
Luke is delivering a meal at 10 o’clock at night on a busy road so he uses the footpath. As he is riding along the footpath Elton who has been drinking walks from an unlit laneway and collides with Luke’s bicycle and breaks his arm. Luke was travelling at a normal speed but failed to see Elton emerge from the dimly lit laneway.
a) Does Luke owe a duty of care to Elton?
b) Has he breached his duty of care?
c) Can Elton or Luke join “2 Your Door” to the proceedings? On what basis?
d) Does Luke have any defences?
a) In order to determine if Luke owes a duty of care to Elton or not, it needs to be determined whether Elton was a neighbour for Luke and if there was any foreseeable danger. As per Donoghue v Stevenson case, a duty of care arises towards an entity if it is categorised as neighbour. In the given scenario, Luke is riding on the footpath in the night. As a result, any negligence on his part can potentially cause harm to any person on the footpath. As a result, any person walking or lying on the footpath is neighbour from Luke's perspective and he would owe duty of care to such people. Considering that Elton has been walking on the laneway, hence Luke owes a duty of care to Elton.
b) In order to discharge the duty of care, it is imperative that the concerned person should take all reasonable precautions so as to prevent harm to the neighbour. In the given scenario, Luke's employer has already told him that riding a bicycle on a footpath is an offence. Also, considering that it is night time, hence the risk of potentially harming someone on the footpath is even higher. A reasonable person in place of Luke would not have used the footpath and instead would have tried to find a path along the road only. Further, considering the potential chances of physical injury to both self and people on the footpath, a reasonable person would have avoided taking footpath. As a result, it can be concluded that duty of care has been violated by Luke
c) Elton can join Luke's employer i.e. "2 Your Door" to the proceedings. The basis for this would be that Luke is an employee of "2 Your Door" and has been negligent in his duties while on duty owing to which the employer would have vicariously liability. The key factor for Elton would be to prove that Luke is an employee and not an independent contractor. This is important since the employer hiring independent contractor is not liable for the actions of the contractor. However, with regards to employee engaging in official duties, the employees are acting as agent to the employer owing to which vicariously liability applies to the employer.
d) One of the defences which Luke could potentially rely on is that of contributory negligence. This is a valid defence when the plaintiff has acted negligently which potentially increased the likelihood of damage. In the given case, Elton was drinking when he was walking. This potentially increases the risk of accident since Elton would not be able to take any evasive action to prevent a collision. In the given scenario, Luke is coming towards a dimly lit alley and hence would have limited sight of Elton coming. However, if there was any other reasonable person in place of Elton who was not drunk, then potentially he would have noticed Luke and the collision could have been avoided or the damage would have been lesser. Based on this defence, the potential liability for Luke would be reduced.
Answer 2 (15 Marks) 700 words (approx.)
Arthur offers to sell his boat for $5000 to Norman by letter that arrives at Norman’s office. Norman goes home and thinks about it overnight. In the morning he decides to get the money ready. He is just about to ring Arthur when Ted comes to the door and tells Norman,
“I saw Arthur last night at the Pub and he told me to tell you he longer wishes to sell his boat”.
a) Was the communication by Ted effective revocation of the offer?
b) What if Norman had accepted the offer via a letter that he had posted before Ted arrived?
c) If Arthur says he was drunk at the time he made the offer and Norman accepts can Arthur avoid the contract?
a) Revocation of the offer is valid if the information about the offer being revoked reaches the offeree before the offer acceptance has been communicated. This communication may be direct or indirect. This implies that it is not necessary that information about revocation of offer needs to be communicated by the offeror only. It can also be communicated by a reliable third party. In the given scenario, Norman had not communicated his acceptance through Arthur through phone or post. Even though Norman had made his mind to accept the offer, but without communication, there is no valid communication. Ted is a reliable third party since he had seen Arthur who had told him to communicate the revocation of offer to Norman. As a result, the conveying of the message by Ted would effectively imply revocation of the initial offer by Arthur to sell his boat for $5,000.
b) As per the postal rule of acceptance established in Adam v Lindsell , the acceptance would become valid as soon as the letter indicating acceptance is posted by the offeree. Since the acceptance becomes valid at the time of posting the letter, hence an enforceable contract is enacted assuming the other contractual elements are present. In the given scenario, offer from Arthur has been communicated by post and no particular means of communication has been indicated for acceptance. Hence, the postal means would be considered a suitable means for communicating acceptance. If Norman had posted the acceptance letter before Ted arrived, then a legal and binding contract would have been enacted between Norman and Arthur with regards to sale of boat. Hence, the revocation of offer would not have happened in this scenario.
c) A key requirement of a legal binding contract is that the parties enacting the contract must have the ability to enact the same. One of the situations in which the underlying party would lack the ability to enact the contract is under intoxication. Any offers made under intoxicated state or any contracts enacted under such state would not be considered to be legally binding provided the other party was aware that the concerned person was drunk. In such a scenario, it is expected that reconfirmation would be taken once the person is sober and not under intoxicated state. In the given scenario, it is given that Arthur has made the offer under the influence of alcohol and Norman was aware of the same. As a result, the offer would not be considered to be valid unless the same is confirmed from Arthur once he is sober and not under the influence of alcohol. Since an offer made in an intoxicated state is not valid, hence no valid acceptance from result from the same. Thus, in the given situation, Arthur can avoid the contract. However, if Norman would have reconfirmed the offer after Arthur became sober and then acceptance was given, then contract would be binding on both parties.
The “Infallible Phone” company advertises their mobiles on the internet via the search engine “Check Mate” saying that experts have proved that their phone is far superior to their major competitor’s product and can be used underwater down to three metres.
The major competitor “Marvellous Mobile” knows that there has been no expert testing of The Infallible phone, nor is it waterproof at all. Marvellous Mobile are suffering loss of market share because of the advertisement.
Please advise “Marvellous Mobile”;
a) What provisions of the Australian consumer law could they use to have the advertisement by “Infallible Phone” removed from the internet?
b) Are there any cases that assist your argument?
c) Could a case for damages against the search engine “Check Mate” be established using provisions of the ACL?
d) Are there any cases that assist your argument?
a) As per s. 18 ACL, a person or entity engaged in trade or commerce must not make statements which are misleading or deceptive. In the given scenario, the "Infallible Phone" company is making false claims about their phone being superior to the competitor. This claim is not approved by any independent third party testing and hence is baseless. However, the claim is material and has been intentionally made so as to increase the sales of their phone and thereby gain a higher market share. Hence, the continuation of the misleading advertisement amounts to breach of s. 18 which provides a valid ground for Marvellous Mobile to get the advertisement removed from the internet.
b) A relevant case is Samsung vs ACCC. Here, Samsung has made claims about their phone being waterproof by introducing pictures of users taking photos of themselves under water. The ACCC won the case and Samsung had to pull down the advertisement from the internet. Also, it had to pay fine to the ACCC for the violation of s. 18.
c) In the given scenario, the users of the search engine Check Mate would understand that the advertisement is made by "Infalliable Phone" and not Check Mate. The latter only provides a platform for advertisement without verifying whether the advertisement is correct or not. The responsibility for the same falls on the company which is being promoted and the entity making the payment for the promotion of the product. Thus, Check Mate cannot be punished by relying on s. 18 which deals with deceptive and misleading advertisements.
d) A relevant case in this regards is Google Incvs ACCC  HCA 1. In this particular case, it was clearly held by the High Court that any sponsored misleading advertisement on Google would not result in liability on the search engine under s. 18. The court highlighted that the users of Google would understand that the contents of the advertisement are made by the product being sponsored and not by Google. As a result, it has held that Google Inc did not violate the provisions of s. 18 ACL by displaying false and misleading advertisement on their platform since they were not aware of the misleading nature of the statements made in the advertisement.
John leases a hall for concerts for three weeks. A week before the due date the concert hall burns down.
a) Is the contract enforceable?
b) Will John have to pay rent for the three weeks?
c) Are there any cases that assist your arguments?
d) Is there any legislation that covers matters such as this?
a) The contract may become frustrated if it becomes impossible or radically more difficult to fulfil the contractual obligations. One of the situations where the contract is held to be frustrated is where there is destruction of the subject matter. The key aspect to establish frustration of contract is that the destruction of subject matter should not be the fault of any of the parties. In the given scenario, the concert hall has burned down due to no fault of any party. Since the concert hall does not exist, hence it is impossible for the contractual obligation to be fulfilled. Hence, the contract would be frustrated. A frustrated contract is void and hence neither party can enforce the contract even if both or one of the parties wants to enforce the contract.
b) Since the contract is void, hence it ceases to exist. Hence, if a party has made any advance payment, then this payment ought to be returned assuming no consideration from the other party. If the payment has to be made at the end of completion of contract, then partial compensation may be payable to the extent that the other party has provided consideration. In the given scenario, if John has not used the concert hall for any day, then no payment of rent would have to be made. However, if partial use of the concert hall has been made before the incident, then rent for the time of actual usage would have to be paid.
Considering that due date of concert has not come before the incident, John would not have to pay the rent for three weeks.
c) A relevant case to assist my arguments would be Taylor vs Caldwell (1863). In this case, a contract had been enacted for the use of Surrey Gardens and Music Hall. However, before the first contract date, the hall was destroyed by fire. Since holding the concert became impossible, hence the contract was declared as frustrated and thereby void. The parties were discharged of their contractual obligation. Hence, the plaintiff did not have to make the payment of rent while the defendant did not have to provide the hall for concert for the agreed period.
d) A relevant legislation to deal with frustrated contracts in Australia is Frustrated Contracts Act 1978 (NSW). Similar legislations occur in other states such as Victoria (Frustrated Contracts Act 1959). The objective of these legislations is to provide details legal provisions so as to cover the various aspects of frustrated contracts. These legislations do not aim to undermine the common law understanding but seek to support the common law by being exhaustive and considering various aspect where common law interpretation may be confusing or ambigious.
Refer to a case that you have studied that has developed a principle of law that you consider may result in some unfair outcomes.
Give reasons in your words why you think the consequences of the legal principle can result in unfair outcomes for the parties.
One of the relevant cases is Salomon v A Salomon & Co Ltd (1897) AC 22. This case developed the principle of limited liability for the owners of a company. This implies that in case of company being unable to settle outstanding liabilities, the owners cannot be personally held for the outstanding liabilities of the company.
This can potentially result in unfair outcomes considering that the company legal form could be used in order to conduct illegal activities since the owners would claim protection under the doctrine of limited liability. In the concerned case i.e. Salomon v A. Salomon, more than 99.99% of the shares were held by a single individual (i.e. Mr. A Salomon) while only 1 share each were allocated to each of the children and wife. Hence, the decision seems to be potentially biased as it provided a blanket protection to the owners of the company.
Over the years in order to limit the abuse of doctrine of limited liability, the courts have started piercing the veil thereby resulting in limited abuse of this doctrine. However, even today, the courts are reluctant to lift the corporate veil and order so only when there is a compelling reason. As a result, there is still scope for some unfair outcomes based on the legal precedent that was established more than a century ago.