Business Law Assignment: Case Analysis Based on Australian Legal System
The questions to be answered in this business law assignmentare:
Explain the distinction between Exclusive Powers, Concurrent Powers and Residual Powers, which are outlined in the Australian Constitution. Give an example of each power.
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
b) If your answer is yes, with whom did you enter a contract
What are the common law rules regarding contracts entered into by infants, and when are such contracts valid, voidable or void
Explain the operation of the contra proferentem rule. Is such a rule defensible in today’s business environment
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.
Exclusive Powers mentioned in this scenario of business law assignment are those powers that are exercised by Federal Parliament, that is, a specific set of Law-making power which are vested in Commonwealth (Sec. 51). For instance, Law related to immigration, defense (Section 114 and 115 of the Constitution), Law related to currency, the power to impose customs and exercise duties, are encompassed under Exclusive Power. Concurrent Powers are the Powers exercised both by Commonwealth and the States. The Commonwealth and the States have the authority and power to make Laws in their respective areas. Marriage, divorce, bankruptcy, taxation, trade, and commerce with other countries are areas covered under Concurrent Powers . However, if there is any conflict between Commonwealths’ Law and the State’s Law, the law made by the Federation will prevail over the Law made by the State under Section 109 of the Constitution.
Residual Powers are the remaining powers with the State. Such powers are neither prohibited nor given by the law to any branch of the government. However, general power of competence is provided because it is not practical to detail the acts followed by the state. During the formation of the federation, States were unwilling to give up some Powers, these remaining powers are enjoyed by the state are known as Residual Powers. These are set of Lawmaking Powers exercised by each State based on the state’s needs. After the formation of the federation some remaining power stayed with the state (Sec.108), these are called Residual Powers. Examples of Residual Powers include Education, Law and Oder, Public Health and Social Welfare, Housing, Transport, and Development.
In the present scenario, I entered into a contract with XYZ Vendsolutions Pty Ltd. as a Consumer. According to Australian Consumer Law, a consumer is a person who buys things. It means, appropriating goods and services instead of money. Therefore, in a given scenario I inserted a coin in the vending machine for a packet of chips and come out an adulterated commodity, establishing the relation of Consumer and producer. Furthermore, I offered money, by adhering to the instructions, for a packet of chips, hence establishing a contract between XYZ Vendsolutions Pty Ltd and me. Therefore, giving money to consume goods thus establishes the relationship consumer with the aforementioned company and also establishes a contract between me and aforesaid company, as a legally binding agreement. Furthermore, the company committed a breach of the contract expressly, by depriving me of what I intend to obtain from the aforementioned company.
In the present scenario, I entered into a contract with XYZ Vendsolutions Pty Ltd as a consumer. There is a direct infringement of my legal right by the said company by providing me with substandard good. Therefore it is violating the agreement, intention, and consideration of the essential elements of the contract. A consumer is a person who buys things and in the given scenario I, inserted a coin in the vending machine for a packet of chips, therefore, giving money to the company for the purchase of a good, which makes me a consumer and company as a producer. The company committed a direct breach of contract by depriving me of what intend to obtain and not accomplishing its obligation. Therefore, the three main elements that are, acceptance of offer, agreement, and Consideration for the formation of contract has been established in the given scenario .
Common-Law worked in a restricted manner regarding the capacity of minors. A minor is a person who has not attained the age of eighteen. According to Common Law, the contract with a minor is voidable. It means that the minor can either end the contract or permit it to operate on its terms .However, there are certain following exceptions there the contract by Minor is not voidable.
The contract for necessities:
It is a contract that is binding to both parties and necessities are determined by a minor’s lifestyle and maintaining that particular lifestyle or way a minor lives.
Beneficial Contract of Employment:
It is a contract by a minor provided for employment and is binding as well, provided that the benefit in the said Contract is fair. A Minor can cast off the said Contract after becoming an adult.
A minor will be bound by contracts of a continuing nature:
In the case where a Minor acquires permanent property as a result of a Contract or includes ongoing obligation, the said contract is binding unless the minor avoids it and thus the minor is bounded by prior obligations as well.
Generally, consent (implied or direct) of parents and guardians is avoided under Common Law. For the commencement of a Binding Contract, the parents and the guardians of a minor must be the party to the contract, in such cases if the minor backs out or does not perform the obligation; the parents or the guardians will be liable and would be bound to perform the obligation as a guarantor.
The Contra proferentem rule is a Latin phrase meaning guilt of drafter or against the offeror and a Legal Doctrine under the Law of Contract stating that any ambiguous, vague clause (partially and completely), should be understood without considering the interest of the party, this has made or requested to introduce or introduced the said clause . The said principle is applied when a contract in question is challenged before the Court and needed a legal interpretation as well
Therefore, the above-mentioned principle lessens intentional vagueness and ambiguity. If the evidence suggests that the party introducing such clause have bonafide intentions, then the contract in question is executed as per the evidence suggest but if the evidence proves the vague nature of the contract language then said rule is applied and in the latter scenario, the Court rules in the favor of the innocent party and against the party that has made or introduced or requested to introduce ambiguity and vagueness in a Contract.
A contract is a complex document and to remove the vagueness and ambiguity in the draft’s language the said rule is applied. In determining which meaning is appropriate the Court holds that a contra proferentem rule is a relevant tool for the interpretation of the clauses of contract in question . Yet in case of exclusion clauses, the slighter interpretation should be applied.
The Judicial outlook focuses more on the natural meaning of the word present in a particular clause Persimmon Homes v Ove Arup . This approach supports the growing trend to support freedom of contract. Contracting Parties should keep in mind while drafting a contract that the language of exclusions clauses be unambiguous and clear, that is to say, they should not be unclear or vague.
However, the said principle in today’s commercial has largely fallen away between the sophisticated parties which negotiate on both sides. There is an inclination the party's commercial contracts should be free to dispense/ administer risks they deem fit.
According to Australian Contract Law Breach of contract occurs when the obligation is not fulfilled or complied with, by a party. It is, therefore, a non-compliance with terms of a contract and breach of fundamental essential on which a contract stands.
The main elements for the breach of contract are:
There must be an agreement that is, something to offer, on the other hand, Consideration (Payment of some kind). A breach can be called the failure to fulfill the agreement by one side and this non-compliance of essential elements of the contract can be partial or complete. According to Australian Contract Law, the aggrieved party has the right to sue the other party. There are three main ways by which a party can be held liable for the breach of contract.
Anticipatory breach: This way of breaching commences when the breaching party tells the non-breaching party that they will be unable to fulfill the terms of the contract . An anticipatory breach happens when one party refuses to perform before the happening of the performance. In this scenario, the victim of the breach can have the choice that is the ignorance of the repudiation or asking for the specific performance or treating the performance as completed and suing at once. A minor breach of contract: When a party fails to perform a small part or minute detail of the contract, such contracts are entirely violated and can be performed substantially. Wrong date, spelling errors, absence of date from the Contract are all examples of Minor breach of Contract . A minor breach is the breach where one part fails to conduct the performance of the contract however the breach is very insignificant that it would not hurt the overall performance of the contract. It can still be completed and performed with ease. A minor breach is an apt example where the breach will not put the contract to an end..
Material and Fundamental Breach: This type of breach happens when the breach is substantial and the party can't perform any action as per the contract and thus resulting in the cancelation of contract.
In the present scenario, Amina was unable to fulfill the contract with Bryan, due to certain economic circumstances. Therefore, in the present case, the obligation is not fulfilled by Amina as the tenure of Bryan was not complete, further, there is non-compliance on the part Amina. There is a further substantial and material violation of the terms of the contract. Therefore Amina as a party is unable to fulfill the terms of the contract.
The present case falls under Anticipatory breach of Contract where Amina told Bryan that she will be unable afford Bryan’s services and as soon as Bryan is notified about the same, according to Australian Contract Law, he is legally entitled to sue Amina as she was unable to complete the terms of the contract.
Yet, Bryan has to prove that the breach of the said contract with Amina resulted in loss and it can further be calculated with a reasonable degree of certainty. Further, Bryan has to prove that the contract was valid, which is in accordance with the Contract Law.
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