Business and Corporations Law Analysis Assignment
11 Pages3280 Words265 Views
Added on 2020-04-29
Business and Corporations Law Analysis Assignment
Added on 2020-04-29
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qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnCommercial and Corporation LawAnalysis of Case Study(Student Details: )
1QUESTIONS BASED ASSIGNMENTPart 1 (a) IssueThe case study highlights that the key issue of this case is the type of businessstructure which is being used by Mary, Fred and Chris for carrying on their business. Rule In Australia, the individuals have different options for choosing a structure for theirbusiness. This includes sole trader, partnership, trust and company. A partnership is abusiness form where different partnership acts apply, based on the jurisdiction in whichthe firm operates. Under all of these acts, it is provided that the partnership is formedwhen two or more people come together to run a business for a common purpose ofearning profits, where the sharing of profits is done equally and the partners carry on thebusiness of the firm. Each partner contributes capital to partnership firm. A partnership is dictated by the partnership deed, which is not a compulsoryrequirement but is deemed as a preferable agreement, whereby each and everyresponsibility and detail of the partners are stated, which includes the profit sharepercentage and their capital contributions. This form of business structure has unlimitedliabilities, as a result of which, for the debts of the company, the partners can be madepersonally liable. In partnership, there is a large talent pool, as each partner brings forth aunique skill set. Application The given case study highlights that Mary, Fred and Chris had created apartnership deed where the rules of the partnership were put down in an agreement. Thereason for deeming this as a partnership is that three people came together to run abusiness of real estate, where they wanted to share the profits in an equal manner andwere also the equal contributors of the capital. Each partner brought forward a different
2QUESTIONS BASED ASSIGNMENTskill set, as Mary was a real estate agent, Fred was a tax consultant and Chris was alawyer. They commonly wanted to work on this business thus proving that there was apartnership form of business structure. Conclusion From the analysis conducted above, it can be concluded that the three people, i.e.,Mary, Fred and Chris were undertaking the business structure of a partnership as therewas equal contribution of capital and equal sharing of profits along with the businessbeing run for profit earning motive. Part 1(b)IssueThe case study highlights that the key issue of this case is the liability owing fromnegligent misrepresentation of Fred towards X, who was a customer of the partnershipfirm. Rule The definition of misrepresentation provides that a person makes a falsestatement of fact, to the other party, so that such other party goes forward with thecontract and creates lawful relations. It is important for the party taking the legal action toshow before the court that a false statement of fact had been made to him/her, instead ofa false statement of opinion being made. Bisset v Wilkinson was a case in which astatement of opinion was made, as a result of which the court discarded the claim madeby the plaintiff regarding the misrepresentation. In this case, the seller had told the buyerthat the land could hold a certain number of sheep, as an estimate, which proved out tobe wrong.Though, there are cases where the court of law upholds the case ofmisrepresentation even when a statement of opinion has been made. These are such
3QUESTIONS BASED ASSIGNMENTcases where the person making the statement is deemed to be in a position to know thetruth behind the statement which has been made. In Smith v Land and House PropertyCorp, the seller had stated that a particular tenant in the building was the most desirableone, even when this tenant was not paying his rent and was about to become bankrupt.This false statement was deemed as misrepresentation by the court even when itcontained an opinion on the tenant being the most desirable one. The next requirement in this regard is to show that the aggrieved party had reliedon the fact which had been misrepresented; and only on showing reliance, the courtawards the relevant remedies to the aggrieved party. In Horsfall v Thomas the gun wasnever inspected by the buyer and the gun had a concealed defect when the same hadbeen bought by the plaintiff. Holding the lack of inspection as lack of inducement, the caseof misrepresentation was not held in this case. Misrepresentation can be undertaken in three different manners, i.e., innocent,fraudulent and negligent. Negligent misrepresentation refers to such a false statement offact being made where the individual making the statement lacks the proper groundsrequired for believing in the truth of this statement. Where this takes place, the defendantgets the responsibility of proving before the court of law that they had reasonablegrounds to provide that the statement which had been made had truth behind it. Thenegligent misrepresentation case is made for the economic loss. Another requirement isto show that the false statement had been made negligently, where the plaintiff madereliance and the damages was obtained due to this false statement by the plaintiff. In the case of Howard Marine v Ogden, the defendant had been hired by theplaintiff at a particular price for undertaking the excavation work. For the completion ofthe tender work, an accurate estimate was required and so, the plaintiff enquired thedefendant about the actual capacity of the barge. After checking on a register, thedefendant quoted a certain capacity of the barge, which was wrong as the capacity inreality was very less. Due to this, the work of the plaintiff was stretched and also resulted
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