Business and Corporate Law: Contract Breach, Restraint of Trade, Director's Duty, Negligence, Misrepresentation

This article discusses various legal issues in Business and Corporate Law, including contract breach, restraint of trade, director's duty, negligence, and misrepresentation. It covers the rules and applications of each issue and provides relevant case laws. The article is suitable for students studying Business and Corporate Law.

Running head: BUSINESS AND CORPORATE LAW
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BUSINESS AND CORPORATE LAW
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Question 1
Issue
The issue involved in this question whether Matilda can able to recover her damages
from Quick Computers Ltd. for breach of their contract.
Rules
The term breach of contract has occurred when any party of the contract may not perform
or fulfill their responsibilities in accordance with such contract terms. Such violation of contract
may also happen when any party establishes that he is unable or unwilling to complete his duties
under that contract. In the case of Forklift Engineering Australia Pty Ltd v Powerlift (Nissan)
Pty Ltd (2000), the court of law has decided regarding material breach of any contract. Any
“material breach” of the contract may not seem as a perception, which is known in such a law of
contract. The substantial breach of any contract is constituted a real breach of that contract, and
the aggrieved party is entitled to get remedies. In the case of Ramsgate Victoria Hotel vs.
Montefiore 1866, it has demonstrated that the contract should be made with the stipulated time;
otherwise, a breach has arisen on the part of that defendant. In the case of Koompahtoo Local
Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor 2007, the court has said that any
inability or unwillingness may conduct a breach of such contract.
Application
In the given scenario, Matilda has contracted with a company, namely Quick Computers
Ltd. to supply some latest system of the computers, not letter than April on that year. However,
the company has been late to deliver and install such a system. She has lost almost $ 25,000 and
has lost a profitable contract for a new client.

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Applying the case of Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty
Ltd (2000) in this scenario, the company has breached the material facts of that contract with
Matilda. To compete with a contract, the parties should fulfill the material fact of that contract.
Material facts are essential parts of a contract, and it should be fulfilled. Therefore, Quick
Computers Ltd company should give such compensation to the aggrieved party, that is, to
Matilda.
Applying the case of Ramsgate Victoria Hotel vs. Montefiore 1866 in this scenario, the
parties of the contract should be completed within a reasonable, as well as stipulated time. In this
scenario, Quick Computers Ltd. company has failed to deliver the instruments within the given
time. The company has breached its duty to deliver such materials within time. Matilda has
suffered a loss for such default of the company. Therefore, Matilda has entitled to get such
damages or compensation from the company.
Conclusion
Therefore, it can be concluded that Matilda is entitled to recover such damages or get
compensation from the company for such breach of that contract by not fulfilling the contract
within time.
Question 2
Issue
The issue involved in this question of whether Albert can work rightfully in the new and
the same type of company or not. Another issue has involved whether there is any right of the
owner of MoneyBags Pty Ltd against Albert.

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Rules
The rule of restraint of trade can be applied in this scenario to resolve the dispute between
the new owner of MoneyBags Pty Ltd and Albert. The phrase ‘restraint of trade’ has referred to a
contract, which has tied the trading activity of another party to such agreement after the
determination of employment. In the case of Bulldogs Rugby League Club Pty Ltd v
Williams 2008, the High Court has been required to differentiate such validity of the term
restraint of trade. The court has revealed that the restraint clause of the contract can be operated
during the continuation of the employment contract of the employee, and not after such
termination of employment. In the case of Buckenara v Hawthorn Football Club 1988, the
court has not usually force any employee of an organization to work with a particular employer.
If the employee has contracted not to work with any other employer, then he should keep his
promise. However, it can be terminated after the dissolution of such employment.
Application
In this given scenario of this question, Albert has sold his company Moneybags Pty Ltd
to one of his investors and appointed as manager and director of that company. At the time of
employing Albert, the new owner of that company has made a contract of restraint of trade.
However, Albert has left that job for some reason and joined the same type of company as an
employee.
Applying the case of Bulldogs Rugby League Club Pty Ltd v Williams 2008 in this
scenario, an employee can join another competed company after termination from the job. The
old employer has no right to the restraint that employee for joining such the same business type
of company. Therefore, Albert can able to work in the new company rightfully, and the old
company’s employer does not have any right against him.

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Relating the case of Buckenara v Hawthorn Football Club 1988 in this scenario, such a
restraint clause will be applicable during employment and not after such termination. As Albert
has joined that company after such termination of the job, therefore the old company has no right
to make any suit against him.
Conclusion
Therefore, it can be concluded that Albert can be able to work in the new company
MyBags Pty Ltd rightfully. The new proprietor of MoneyBags Pty Ltd has no right against
Albert.
Question 3
Issue
Issues involve this question whether the directors of Rounder Tyres Pty Ltd company
have breached any duty or not, and if so, what are the defenses.
Rules
The duties of directors in a company within the territory of Australia will apply here to
solve such issues. Section 558G of the Corporations Act 2001 (Cth) will apply here. This
section has described the duties of the director of a company to preclude from any insolvent
trading of the company. The directors of any company should prevent their company from
incurring any debt or giving lease, which may lead to insolvency. The directors may be
responsible for such insolvency of the company if they do not able to produce any proof for
prevention. However, there are some defense clauses in this Act. Section 180 of the Act has
described that the directors should do any act for the company with due diligence and reasonable
care. Section 181 of the Act has supported to the directors as a duty or civil obligation of them.

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The directors should act for the company with good faith. It is also a duty of the director to use
his position for the betterment of his company, which has directed in section 182 of this Act.
Application
In this given scenario, the directors of Rounder Tyres Pty Ltd have granted a lease, as
well as given rent of the company premises to the betterment of the company. However, the
company has gone into liquidation.
Applying section 588G of the Act in this above situation, the directors are responsible for
such liquidation of their company as it a duty of them to prevent the company from taking any
step by which the company may face insolvency. Therefore, the directors of the company have
breached their duties towards the company as not preventing the company from insolvency.
Applying section 180 of the Act, the directors can able to take a defense of the above
section that they have done such act with equitable care and due diligence for the betterment of
the company.
Applying section 181 of the Act in this scenario, the directors have possessed a duty to
do any act with good faith and for the betterment of the company. They have granted the lease
and rent for in such good faith and in the thought of betterment of the company.
Applying section 182 of the Act, they also straight a defense as they have used their
position to uplift their company.
Conclusion
Therefore, it can be concluded in this given scenario that the directors are liable for such
liquidation of the company under section 588G of the Act. However, they can take the defense of
that liability by applying some other duties of them.

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Question 4
Issue
Issues involved in this question whether Judy will be able to get compensation for
negligence from Concrete Bond Ltd or not.
Rule
The rule of establishing the negligence will be applied here to discuss the rate of success
in this case of negligence. To prove any negligence in tort law, the plaintiff should fulfill four
conditions of it. The defendant should have possessed a duty of care towards the plaintiff and he
has breached that. Then the plaintiff should have suffered a loss, and it is proximate with that
breach. In the case of Winterbottom vs. Wright 1842, it has demonstrated that the scope of such
negligence has been limited to such a limit where the injured person has privity with the
defendant manufacturer. Any person, other than the customer, can not able to sue the
manufacturer for negligence in the product. The decision of this case has been withheld by the
judgment of MacPherson vs. Buick Motor Co. in the year 1916. It has decided that the rule of
negligence or breach of duty can be applied by any person who is foreseeably injured for such a
dispute of a product. It has also discussed in the case of Donoghue vs. Stevenson 1932 that the
manufacturer will be liable for any negligence or any danger arise for the product.
Application
In this given question, Morris has bought a machine from Concrete Bond Ltd. After
starting the machine, it has made an explosion. The aggrieved person, Judy, who is a neighbor of
Morris and has been injured for such an explosion. She wants to take compensation from
Concrete Bond Ltd. for negligence.

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Applying the rule of negligence, the company will not be liable for such a situation as
there is no duty of care of the manufacturer for that product, as there is no duty of care for the
neighbor of his customer. There is no direct or proximate relation between the manufacturer and
Judy.
Applying the case of Winterbottom vs. Wright 1842, in this situation, the neighbor, Judy,
can not sue the manufacturer as there is no privity between them.
Applying the case of MacPherson vs. Buick Motor Co. 1916, Judy can able to sue or
able to recover compensation from the manufacturing company as any person who has been
injured by default of the product.
Relating the case of Donoghue vs. Stevenson 1932 in this case that the aggrieved, Judy,
can able to take compensation from the manufacturer company.
Conclusion
Therefore, it can be concluded that Judy will get success in recovering compensation in
negligence from Concrete Bond Ltd.
Question 5
Issue
Issues involved in this question to suggest all alternative legal actions in common law for
such misrepresentation for selling a property against Sarah.
Rules
The rules or laws against such misrepresentation and their consequences will be applied
here to such legal actions. In the jurisdiction of common law, the term ‘misrepresentation’ means
a misleading or untrue statement of any fact. In the case of Curtis v Chemical Cleaning and

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Dyeing Co 1951, this misrepresentation has described as a misleading or incorrect statement of a
fact through a party to the other, which has been made at the time of negotiation for entering into
the contract. The injured party can able to rescind the contract and claim compensation before
the court of law. In the case of Krakowski v Eurolynx Properties Ltd 1995, an Australian High
Court has decided that aggrieved party to the misrepresented contract may sue against the
wrongdoer before the court of law for such tort of negligence, as well as the deceit of the fact.
The aggrieved party can go for rescission, which has decided in the case of Shogun Finance Ltd
vs. Hudson 2004.
Application
In the given scenario, Sarah has made misrepresentation with an intention to sell her land
property to Prakash. The misrepresentation has made during the negotiation for sale. In this
paragraph, it has discussed possible legal actions following the common law, which Prakash can
take against Sarah.
Applying the case of Curtis v Chemical Cleaning and Dyeing Co 1951, the aggrieved
party, Prakash, can rescind the contract, which has made out of misrepresentation. Then he can
ask for compensation from the wrongdoer, Sarah, before the court of law.
Applying the case of Krakowski v Eurolynx Properties Ltd 1995, in this scenario, the
aggrieved party can take legal action against the defendant following the rules of negligence, as
well as the deceit of the fact. He can able to take compensation for Sarah, the defendant.
Relating the case of Shogun Finance Ltd vs. Hudson 2004, the plaintiff can choose for
the rescission of that agreement. The aggrieved party can able to take several legal actions in
common law against the defendant for any misrepresentation made at the time of negotiation for
arriving into an agreement.

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Conclusion
Therefore, it can be concluded that Prakash can able to take legal actions against Sarah
that he can sue for compensation through the rule of negligence, or rescind the contract.

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References
Buckenara v Hawthorn Football Club [1988] VR 39
Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822
Corporations Act 2001 (Cth)
Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805
Donoghue v Stevenson [1932] UKHL 100
Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd [2000] VSC 443
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61. 233 CLR
115; 82 ALJR 345; 241 ALR 88
Krakowski v Eurolynx Properties Ltd [1995] HCA 68, (1995) 183 CLR 563, High Court
MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916)
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109
Shogun Finance Ltd v Hudson [2004] 1 AC 919
Winterbottom v Wright (1842) 10 M&W 109