Assignment - Business Law Application

Running Head: Business Law
Title:
Assignment Name:
Student Name
Course Name and Number:
Professor:
Date:
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Business Law
Table of Contents
Issues:...................................................................................................................3
Rule:......................................................................................................................3
Application:..........................................................................................................4
Conclusion:...........................................................................................................6
References.............................................................................................................8
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Business Law
Issues:
1. Whether Wayne is liable to pay $2,50,000 to Michelle for the share of her $5,00,000
partnership debt?
2. Whether the agreement entered into by both the parties is legally binding as it was
formed on the false statement of Wayne?
3. If the agreement is valid, whether Michelle can rectify the amount wrongly mentioned
in the agreement?
Rule:
That section 9 of the Partnership Act, 1892 of NSW deals with the liabilities of the partners.
As per section 9 of the said act, every partner of the partnership firm is jointly liable along
with the other partners for every debt and duty of the partnership firm till the time he is the
partner, and after the death of that partner, his legal heirs is also liable severally for the debts.
Misrepresentation Act, 1972: Under the Misrepresentation Act, 1972, if the person entered
into the contract by making the false statement i.e., Misrepresentation then the aggrieved
party is at liberty to take action as per the act i.e. to rescind the contract or to claim the
damages for the same. But it is most important to mention here that if the person somehow
completes the terms of the contract, the contract can be valid.
Under the Contract Law of Australian, if due to some mistake or lapse, the written agreement
does not reverberate the actual contract and one of the parties did not agree to rectify the
contract, then the aggrieved party can step towards the court to rectify the agreement. It is
furthermore relevant to mention here that the rectification is the discretionary remedy and the
court might refuse to rectify the agreement even on the valid grounds of rectification.
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Business Law
Application:
That the first issue deals with the whether Wayne is liable to pay $2,50,000 to Michelle for
the share of her $5,00,000 partnership debt. It is submitted that from the facts of the given
case, it is clear that Wayne and Michelle are business partners up to June 2016 who ran their
online computer software business namely speedy installations. It is pertinent to mention here
that due to some inflation in the market, their business1 could not run well and both were sued
personally by the various creditors for $2,50,000 each. It is furthermore relevant to mention
here that in March, 2017, the Hon’ble Supreme Court of NSW had ordered both to pay the
amount of $5,00,000 to all the creditors, but at that time only the properties of the Michelle
are available to meet the debts. So, to clear the debt of the partnership firm2, Michelle sold
her two properties in Sydney and clear all the debts of $ 5,00,000.
As per section 9 of the Partnership Act, 1892, every partner of the partnership firm is jointly
liable along with the other partners for each and every debt and duty of the partnership firm
till the time he is the partner3 and after the death of that partner, his legal heirs are also liable
severally for the debts. As per the given facts and circumstances of the case, Wayne is liable
to pay $2,50,000 to Michelle as she sold her properties to clear the debts of the partnership
firm and as per the settled provisions of law, all the partners are jointly or severally liable to
clear the debts. Furthermore, it was agreed between them that Wayne would return the money
of Michelle. So, from the given facts and circumstances it is prima facie established that
under the provisions of the Partnership Act, 1892, Michelle can recover an amount of
$2,50,000 from Wayne and if Wayne would not pay the amount then Michelle can apply to
court for recovering her money4.
1 Stephanie R. Hoffer, "Misrepresentation: The Restatement's Second Mistake" [2012] SSRN
Electronic Journal.
2 Barbara Kelly, "Section Editor's Comments: Us, Learning" (2012) 7(1) Partnership: The Canadian
Journal of Library and Information Practice and Research.
3 Paul S. Davies, "Rectifying The Course Of Rectification" (2012) 75(3) The Modern Law Review.
4 David Echeverry Botero, "Contract Interpretation Law In Australia: It Is A Maze, Not A Straight Way"
(2015) 2(41) IUSTA.
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Business Law
That the question arises in the second issue is that as the agreement formed by both the
parties is made upon the false statement of Wayne. From the facts and circumstances it is
clear that Wayne had misrepresented Michelle by making the statement that he will return her
money after five years as he will inherit his grandmother’s property because she remains sick
and will not live so long. Believing on the statement of Wayne5, Michelle drafted the
agreement on 25th March, 2017 that Wayne will return the amount within 5 years. It is
furthermore submitted that after sometime it came to the knowledge of the Michelle that the
grandmother of Wayne had died on 17th December, 2000 and left him very property. From
the above said fact it is prima facie established that Wayne had misrepresented Michelle as it
was well in the knowledge6 of Wayne that his grandmother had already died and not given
him much property. It is relevant to mention here that Michelle can take action under the
Misrepresentation Act, 1972, whereby it is specifically mentioned that if the person entered
into the contract by making the false statement then aggrieved party is at the liberty to take
action as per the act i.e. to rescind7 the contract or to claim the damages for the same. In the
present case, Michelle can move to court for rescind of the contract or to claim damages from
Wayne. But as per the circumstances it would be advised to Michelle that she could file the
suit for damages as by terminating the contract she will get nothing.
As from the above stated discussion, it is clear that the agreement is legally valid, now the
question arises is whether Michelle can rectify the amount which was wrongly mention in the
agreement dated 25.03.2017. The facts of the present situation are that as it is admitted by
both the parties that the total liability on the partnership firm was of $5,00,000 and the
Hon’ble Supreme Court of NSW had also ordered to pay $5,00,000 to all the creditors. It is
5 Martijn W. Hesselink, "Democratic Contract Law" (2015) 11(2) European Review of Contract Law.
6 David Echeverry Botero, "Contract Interpretation Law In Australia: It Is A Maze, Not A Straight Way"
(2015) 2(41) IUSTA.
7 Lucia Šírová, "Misrepresentation Under English Contract Law And Its Comparison To Slovak
Contract Law" (2016) 16(2) International and Comparative Law Review.
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Business Law
also the admitted fact that the Michelle had cleared all the debts after selling her two
properties at Sydney8. So, from the facts itself it is clear that the liability on the part of Wayne
is $2,50,000 but inadvertently on the agreement dated 25.03.2017, the amount was written as
$25,000 which needs to be rectified but Wayne refused to do so. It is submitted that as the
Contract law of Australia9, if due to some mistake or lapse, the written agreement does not
reverberate the actual contract and one of the parties did not agreeing to rectify the contract,
then the aggrieved party can step towards the court to rectify the agreement. It is furthermore
relevant to mention here that in Walker -v- Armstrong (1856) 8 De GM & G 531, the court
had held that in rectifying the agreement10, the main aim of the court is to keep the parties in
the position to which they could not placed due to the mistake or oversight. In the present
case, the only thing to prove by Michelle is that the parties were in the complete agreement
on the terms. That the Hon’ble Court in Frederick E. Rose (London) Ltd -v- William H. Pim
Jnr. & Co. Ltd [1953] 2 QB 45011 had held that for granting the rectification of agreement,
the only thing required to prove is that both the parties were in complete agreement on the
terms of their contract.
Conclusion:
In the end from the above discussions, it is concluded that it is always the intention of the law
to give justice to everyone. In the present case, as discussed it is prima facie established that
Wayne is trying to escape from his admitted liability by interpreting12 the law but as per
section 9 of the said act, every partner of the partnership firm is jointly liable along with the
other partners for each and every debt and duty of the partnership firm till the time he is the
8 Barbara Kelly, "Section Editor's Comments: Us, Learning" (2012) 7(1) Partnership: The Canadian
Journal of Library and Information Practice and Research.
9 Julie Bunney, "Mandatory Misrepresentation" (2018) 30(1) Emergency Medicine Australasia.
10 Paul S. Davies, "Rectifying The Course Of Rectification" (2012) 75(3) The Modern Law Review.
11 "Grants Alert" (2017) 42(2) Federal Grants & Contracts.
12 Stephanie R. Hoffer, "Misrepresentation: The Restatement's Second Mistake" [2012] SSRN
Electronic Journal.
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Business Law
partner and after the death of that partner, his legal heirs is also liable severally for the debts.
Under the Misrepresentation Act, 1972, if the person entered into the contract by making the
false statement i.e., Misrepresentation then the aggrieved party is at liberty to take action as
per the act i.e. to rescind the contract or to claim the damages for the same. Under the
Contract Law of Australian, if due to some mistake or lapse, the written agreement does not
reverberate the actual contract and one of the parties did not agree to rectify the contract, then
the aggrieved party can step towards the court to rectify the agreement. It is furthermore
relevant to mention here that the rectification is totally the discretionary remedy and the court
might refuse to rectify the agreement even on the valid grounds of rectification. So, the
provisions of the law and well settled case laws, it is clear that Wayne is liable to pay
$2,50,000 to Michelle as the share of the debts paid by her on behalf of Wayne.
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Business Law
References
Bunney, J. (2018). Mandatory misrepresentation. Emergency Medicine Australasia, 30(1),
115-116.
Davies, P. (2012). Rectifying the Course of Rectification. The Modern Law Review, 75(3),
412-426.
Grants Alert. (2017). Federal Grants & Contracts, 42(2), 1-8.
Hoffer, S. (2012). Misrepresentation: The Restatement's Second Mistake. SSRN Electronic
Journal.
Kelly, B. (2016). Section Editor's Comments: Jazz and Professional
Development. Partnership: The Canadian Journal Of Library And Information Practice
And Research, 6(2).
Loi, K. (2012). Banks, Agency and Misrepresentation. SSRN Electronic Journal.
Muharremi, R. (2016). Public Private Partnership Law and Policy in Kosovo. European
Procurement & Public Private Partnership Law Review, 6(3), 111-119.
Pietarinen, A. (2014). Misrepresentation in “Misrepresentation in Context” in
Context. Foundations Of Science, 19(4), 381-386.
Rectification of Corrupted Neural Networks. (2016). International Journal Of Science And
Research (IJSR), 5(1), 932-934.
Echeverry Botero, D. (2015). Contract Interpretation Law in Australia: It Is a Maze, Not a
Straight Way. IUSTA, 2(41).
Hesselink, M. (2015). Democratic contract law. European Review Of Contract Law, 11(2).
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Business Law
Šírová, L. (2016). Misrepresentation Under English Contract Law and its Comparison to
Slovak Contract Law. International And Comparative Law Review, 16(2).
2