1AUSTRALIAN COMMERCIAL LAW Part A Answer 1 (A) In the workshop a constitution has been developed to address the problems which are faced by the tribe who are not aware of any existing legal system. The new constitution had been enacted to ensure that the 3 part legal system is incorporated into the community of The Tribe. The primary action which is suggested through the proposed constitution is that of dividing governance into three sectors. The first sector would be those who would make the law. The second sector would be those people who would apply the law. The third and the final sector would be those people who would enforce the law. In addition to these three sectors the inclusions of secondary rules to address any insufficiency or defect in the primary rules have also been made a part of the constitution. There was a problem in the tribe that decisions were being made without any consistency. Where the proposed Constitution would apply the people who enforce the law have to abide by the law made by those who have the right to make the law. There was also a problem with the decision makers for providing biased decisions when it came to the family members. The constitution includes in itself the rule of law to address this problem. By the application of this rule everyone will be made equal before the law, be it the rule maker, the rule applied or the rule enforcer. The constitution has been provided with rules which would allow the lawmakers to change the law in certain areas in order to comply with the rules of change as provided by Hart1. Hierarchy of the decision makers have also been created through the constitution. This is to ensure that the 1Bradley, Gerard V. "The Force of Law."The Review of Metaphysics71.3 (2018): 596-597.
2AUSTRALIAN COMMERCIAL LAW problem which the tribe currently faces where no one is able to challenge a decision is addressed adequately. By maintaining a hierarchy in the decision making system it can be ensured that the rules of adjudication provided by Hart are addressed2. Through the maintenance of the hierarchy no person would be able to involve in malicious decision making and people who are not satisfied with the decision can make an appeal. The constitution provides the rule that decision makers have to follow the decisions which are provided by those who are above them in the system. This Secondary rule complies with the requirement provided by Hart with respect to the rule of recognition. The rule will ensure that decisions which are made by the decision makers while addressing disputes are consistent. The people who will enforce the rules are provided rights to make rules themselves which may be required in order to properly carry out their functions3. However these rules have to be in compliance with the primary rules. This provision in the constitution complies with the rule of adjudication provided by Hart. The Australian constitution also adopts a similar approach as depicted by the proposed constitution for the tribe. The Governance of the society are divided into three parts which is the executive (rule enforcer), the judiciary (rule applier) and the Legislature (the rule maker). Through section 51 of the constitution the rules of change advocated by Hart have been incorporated into the Australian system. The rules of adjudication have been incorporated through provisions like statutory interpretation and delegated legislation. The rules of recognition have been addressed by provisions like the rule of law and the doctrine of precedent. In the same way as proposed in the proposed constitution the Australian system also has a hierarchy of courts. This signifies that when a person is unhappy with the decision of a quote he can appeal against such decision in a court which is above that court in the Hierarchy. 2Black, Donald J. "The boundaries of legal sociology."The Law and Society Canon. Routledge, 2018. 3- 17. 3Kramer, Matthew H. "Power-Conferring Laws and the Rule of Recognition." (2018).
3AUSTRALIAN COMMERCIAL LAW Answer to question 2 Issue Are there any vitating factors which would render the contract between Barry and Angela as void in the light of the events which took place before the contract was formed? Rule There are several vitating factors in a contract which render the contract imperfect. Thesefactorsincludemisrepresentation,duress,undueinfluence,mistakeandillegality. Misrepresentation is the factor which can be analysed for the purpose of addressing the above identified issue.In the case of Esso Petroleum v Mardon [1976] QB 8014the court had made a ruling that opposed to future events or a statement of opinion a misrepresentation is a false statement of fact. However even when a statement of opinion has been made, an action of misrepresentation can be claimed if the person making the representation was in a position to have knowledge about the facts as stated in Smith v Land & House Property Corp (1884) 28 Ch D 75. No action for misrepresentation is available when the statement is regarding an existing legal provision Pankhania v Hackney [2002] EWHC 2446. After the party who has been misrepresented has established before the court that a false statement has been made it has to be further proved that because of such false statement the party was induced to get into the contract as per Horsfall v Thomas [1862] 1 H&C 907. If the person to whom the Representation had been made was not aware of the false statement, of claim for 4Esso Petroleum v Mardon [1976] QB 801 5Smith v Land & House Property Corp (1884) 28 Ch D 7 6Pankhania v Hackney [2002] EWHC 244 7Horsfall v Thomas [1862] 1 H&C 90
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4AUSTRALIAN COMMERCIAL LAW misrepresentation will be not successful. Further where the validity of the statement has been verified before being relied upon then it is considered by the court that the party has not relied on the statements made as stated by Attwood v Small [1838] UKHL J608. Reliance can even be established even if the party was asked to verify the statement but they actually did not do it. Where the establishment of a false statement being made has been completed, along with the fact that it was relied upon by the party to get into the contract the court has to analyse the kind of misrepresentation which has taken place. The law recognizes three kind of misrepresentation however for addressing the above fraudulent misrepresentation is the most relevant of all. Derry v Peek (1889) 5 T.L.R. 6259is the landmark case in which the court identified fraudulent misrepresentation. The court in this case stated that where a representation had been made which is not a contractual term before getting into the contract which was known to the person making the representation to be false then such kind of Representation where other elements of misrepresentation are satisfied would be regarded as a fraudulent misrepresentation. In this case the aggrieved party was allowed to ignore the contract. Application Barry wants to buy a business where he could be his own Boss. He comesacross an advertisement which has a lucrative offer in relation to a fruit and vegetable shop. The invitation to offer suggested that the turnover of the business was around $20,000 a month. The invitation for treat also signify that there were no competitors of the business. Barry made an offer to purchase the business from Angelo at a price of $200,000 after confirming that the business had and expenses of $8,000 per month. The scenario for the stipulates that none of the statement of facts which had been made through the advertisement work actually true.Where a statement of 8Attwood v Small [1838] UKHL J60 9Derry v Peek (1889) 5 T.L.R. 625
5AUSTRALIAN COMMERCIAL LAW fact is false the aggrieved party can bring a case of misrepresentation.It has been provided by the situation that Barry had visited the mall himself to analyse whether it was busy or not. It is stipulated to the rules about that where investigation is done by the party he is deemed to have not replied on the representation. However in this situation the investigation was done in relation to the whether the mall is busy or not and not in relation to the turnover or competitors of the business. As a prudent person who would have seen that advertisement would have been induced by such terms to get into a contract Barry has also been induced and the second element of Misrepresentation is established. As Angelo was operating the business he is deemed to know about the turnover and competitors of the business. Where a false statement was made about these terms which were known to the representor it accounts to a fraudulent misrepresentation as established in the case of Derry v Peek. After analysing the kind of misrepresentation which Angelo has committed it is clear that Barry well have the right to ignore the contract with him. BarrycanalsoclaimdamagesfromAngeloasthisisallowedincaseofafraudulent misrepresentation. Conclusion Concluding the analysis it has been proved with evidence that Barry will have the right to ignore the contract with Angelo based on the statements made by him before the formation of the contract. Answer 3 Issue Assuming that Barry does not get out of the contract is there a possible action available to him for a breach of contract.
6AUSTRALIAN COMMERCIAL LAW Rule In the case of Shell UK v Lostock Garage Limited [1976] 1 WLR 118710the Court ruled that they are reluctant to add implied terms into a contract under the provisions of common law. It is actually the role of parties to form an agreement. Therefore the courts cannot be expected to rewrite the terms of the contract for the parties. There is a freedom of contract exists and in very limited circumstances the courts can include implied terms in a contract.These circumstances are mainly terms implied at law terms implied through custom and terms implied in fact. In the case of Hutton v Warren [1836] EWHC Exch J6111the court stated that where a specific term is generally used in trade the courts may include such terms in the contract if they are not present. There are two test which are applied to determine terms implied in fact. The first test known as the business Efficiency Test had been provided to the Moorcock (1889) 14 PD 64 case12. The test asks a question that whether actually the term is required to give business efficiency to the contract. This signifies that there would be no sense in the contract without search term. The term will only be included when it is absolutely necessary. Terms can also be implied in law where the law provides protection to the weaker party as ruled in the case of Wilson v Best Travel [1993] 1 All ER 35313. Along with common law the Sale of Goods Act 1954 (Cth) also provides remedies to the parties whose rights have been violated in relation to a sale of good contract. Provisions for the quality 10Shell UK v Lostock Garage Limited [1976] 1 WLR 1187 11Hutton v Warren [1836] EWHC Exch J61 12Moorcock (1889) 14 PD 64 case 13Wilson v Best Travel [1993] 1 All ER 353
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7AUSTRALIAN COMMERCIAL LAW of goods to be employed in a contract have been stated via section 19 of the Act14. The contravention of this section can lead to remedies under section 57 of the Act. Application When the contract had been formed between Angelo and Barry it had been duly documented by them. In such documentation it was clearly mentioned that along with the shop Angelo provides Barry with a loader (kind of machinery) and a van. Once the business had been taken over by Barry he had been notified that the Van did not actually belong to Angelo or the business and had in reality been leased. It had been further brought to the knowledge of Barry that the loader was of no use as it was broken and would require a cost which is equal to its original value for getting repaired. Although the implied terms are generally not added by the courts into the contract as discussed above there are certain circumstances in which they can be added. By the application of the business Efficiency Test which has been given out by the Moorcock case it can be made out that the contract would have no meaning where the Van actually did not belong to the business or Angelo. Therefore the court who has the right to include implied term in this condition, will include a time that the Van actually belong to Angelo. As such terms have not been complied with Angela has breached the contract which was formed between him and Barry. In addition it is also an implied term that when goods are sold they have to be of a resonable quality. This term is implied by law as the bargaining power of the seller is much more than the buyer. Provisions in relation to the inclusion of such implied terms are also supported by applying the rules under section 19 of the act. This would mean that Angelo had the obligation under the contract to provide Barry with the reasonable Loader. However the scenario provides that the loader is broken and so is the contract between Angelo and Barry. Further through the 14Sale of Goods Act 1954 (Cth) s 19.
8AUSTRALIAN COMMERCIAL LAW application of principles of damages in contract law the court will make Barry eligible to get compensated by Angelo for the breach of contract. Conclusion The contract was breached by Angelo Part C Hello Mr Barry, How are you doing? I have been sent to provide you advice regarding your contractual matters. You wanted to buy a business where you could be his your Boss and you came across an advertisement which had a lucrative offer in relation to a fruit and vegetable shop. The advertisements suggested that the turnover of the business was around $20,000 a month. The advertisement also signified that there were no competitors of the business. You made an offer to purchase the business from Angelo at a price of $200,000 after confirming that the business had and expenses of $8,000 per month. Youlattergottoknowthatnoneofthestatementwhichhadbeenmadethroughthe advertisement work actually true In this situation you can rely on misrepresentation. Opposed to future events or a statement of opinion a misrepresentation is a false statement of fact. As the statements were false you can file a case for misrepresentation
9AUSTRALIAN COMMERCIAL LAW Where a statement of fact is false the aggrieved party can bring a case of misrepresentation has been provided by a precedent case and will help you in your matter. You had visited the mall your to analyze whether it was busy or not. I would like you to know that where investigation is done by the party he is deemed to have not replied on the representation. However in this situation the investigation was done by you in relation to the whether the mall is busy or not and not in relation to the turnover or competitors of the business. As a prudent person, who would have seen that advertisement would have been induced by such terms to get into a contract, you will also be induced to get into a contract. This is a requirement to establish misrepresentation. As Angelo was operating the business he is deemed to know about the turnover and competitors of the business. I would like you to know where a false statement was made about these terms which were known to the representor it account to a fraudulent misrepresentation. After analyzing the kind of misrepresentation which Angelo has committed it is clear that you will have the right to ignore the contract with him. YoucanalsoclaimdamagesfromAngeloasthisisallowedincaseofafraudulent misrepresentation. Where we assume that you not get out of the contract is there a possible action available to you for a breach of contract will also be answered by me.
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10AUSTRALIAN COMMERCIAL LAW There are two terms in a contract. The first is express term which means you have expressly agreed to those and the other is the implied term which means you have not expressly agreed to those. When the contract had been formed between Angelo and you it had been duly documented In such documentation it was clearly mentioned that along with the shop Angelo provides you with a loader (kind of machinery) and a van. Once the business had been taken over by you he had been notified that the Van did not actually belong to Angelo or the business and had in reality been leased. It had been further brought to your knowledge that the loader was of no use as it was broken and would require a cost which is equal to its original value for getting repaired. Although the implied terms are generally not added by the courts into the contract as discussed above there are certain circumstances in which they can be added. it can be made out that the contract would have no meaning where the Van actually did not belong to the business or Angelo. Therefore the court will include a termthat the Van actually belong to Angelo. As such terms have not been complied with Angela has breached the contract which was formed between him and you In addition it is also an implied term that when goods are sold they have to be of a reasonable quality. This term is implied by law as the bargaining power of the seller is much more than the buyer. Provisions in relation to the inclusion of such implied terms are also supported by applying the rules under section 19 of the act.
11AUSTRALIAN COMMERCIAL LAW This would mean that Angelo had the obligation under the contract to provide you with the reasonable Loader. However the loader is broken and so is the contract between you and Angelo. Further through the application of principles of damages in contract law the court will make you eligible to get compensated by Angelo for the breach of contract.
12AUSTRALIAN COMMERCIAL LAW References Attwood v Small [1838] UKHL J60 Black, Donald J. "The boundaries of legal sociology." The Law and Society Canon. Routledge, 2018. 3-17. Bradley, Gerard V. "The Force of Law." The Review of Metaphysics 71.3 (2018): 596-597. Derry v Peek (1889) 5 T.L.R. 625 Esso Petroleum v Mardon [1976] QB 801 Horsfall v Thomas [1862] 1 H&C 90 Hutton v Warren [1836] EWHC Exch J61 Kramer, Matthew H. "Power-Conferring Laws and the Rule of Recognition." (2018). Moorcock (1889) 14 PD 64 case Pankhania v Hackney [2002] EWHC 244 Sale of Goods Act 1954 (Cth). Shell UK v Lostock Garage Limited [1976] 1 WLR 1187 Smith v Land & House Property Corp (1884) 28 Ch D 7 Wilson v Best Travel [1993] 1 All ER 353