Business and Corporate Law

This article discusses three case studies related to Business and Corporate Law. The first case study deals with partnership law and the liability of partners. The second case study discusses the Australian Consumer Law and remedies for false advertising. The third case study explains the principle of promissory estoppel and its application in a contractual relationship between an employer and an employee.

Running Head: BUSINESS AND CORPORATE LAW 0
Business and Corporate Law
Student’s Name
11/21/2018

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Contents
Case Study 1....................................................................................................................................2
Issue 2
Rules 2
Application 3
Conclusion 3
Case Study 2....................................................................................................................................3
Issue 3
Rules 4
Application 5
Conclusion 5
Case Study 3....................................................................................................................................6
Issue 6
Rules 6
Application 7
Conclusion 7
References........................................................................................................................................8

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Case Study 1
Issue
The issue is to check that whether the partnership act will be bind with the contract
developed by Lance and whether the other partners of the firm can initiate any action against
him?
Rules
The partnership is a form of business where two or more person comes together to do a
business and to share the profit earned out of the same. In Australia, every state has it is own
legislation to deal with this business structure (Business.gov.au, 2018). In every partnership firm,
partners decide the duties and powers of each partner mutually and for this reason, a third party
cannot get to know about the same.
A Partner act as an agent of a partnership firm and other partners and for this reason, the
firm and other partners are binds with the acts and deed of such partner. As per the decision was
given in the case of Polkinghorne v Holland (1934) 40 ALR 353, the partners of the firm are
liable in both manner i.e. jointly and severally for the act of another partner done in the ordinary
course of business. It is a fiduciary duty of each partner to act in a decided manner. This is the
reason that in those cases where partners act or enter into a transaction going outside of the
decided limit, other partners can sue him/her. The case of Birtchnell v Equity Trustees (1929) 35
ALR 273 supports this argument. In this case, it has been given that breach of fiduciary duty
leads the risk of legal actions.

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Application
In the given case, one of the partners named Lance has made a purchase of a car from
Mighty Motors Pty Ltd. This partner was clearly instructed to not to spend over $20000 for this
purchase. The car purchased hereby was for the business purpose and therefore the subjective
purchase comes under the category of ordinary business of the company. The actual value of the
car that Lance paid was $25000, which was more than the allowed one according to the mutual
discussion and decision of all the partners of the firm. In this whole transaction, the third party
was unaware of the limited authority of Lance. Applying the provisions of Polkinghorne v
Holland, the firm and other partners will be liable towards the third party for this transaction.
Further, to apply the decision given in the case of Birtchnell v Equity Trustees, this is to
be stated that other partners can sue Lance for the reimbursement of value that Lance spent
above the allowed value i.e. the difference of $25000 and $20000, as Lance breached his
fiduciary duty by not acting according to prescribed manner and instructions.
Conclusion
This is to conclude that the firm will be bound by this contract as because of agency
relationship the third party had reason to believe that Lance is acting on behalf of the firm and
has enough authority for the purchase of a car worth $25000. Further, other partners can bring an
action against Lance for the breach of Fiduciary duty.
Case Study 2
Issue
To check that-

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a) Whether Contract is bound on Saqlaim?
b) Can customers can initiate an action for remedies in respect to moisturizer?
Rules
a) Many of the factors are there, the existence of which does not leave consent as free and
independent as the same was required to be under a contract. Unconscionable conduct is
one out of such factor. It reflects a situation where offeror remains in a position to
influence the free will of the offeree. In the cases of unconscionable conduct, one party
take unfair advantage of the special disability of another party (Legal Match, 2018). Such
disability can be anything such as old age, lack of education, illiteracy, or a combination
of two or more). It was held in the case of Blomley v Ryan (1956) 99 CLR 362 that If
Unconscionable conduct exists in the development of a contract then such contract cannot
be held valid and the weaker party will not be bound with such contract.
b) Australian Consumer Law (ACL) is the lead legislation of the nation, which provides
protection to consumers of businesses. The law is mentioned under the Competition and
Consumer Act 2010. The legislation provides the manner in which business needs to treat
their consumers. The act puts many restrictions on the misleading and false
advertisements as the same brings many adverse impacts for the consumers. Section 29 of
the act says that an organization can be held liable if the same make a false advertisement
regarding the features of goods or services (Austlii.edu.au, 2018) Business generally
publishes such advertisement to bring more and more customers and to defeat their
market competitors. If to talk about remedies for breach of section 29 of the act, this is to

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be stated that such breach is an offense according to the section 151 of the act and the
victim consumer can ask for the remedies from the liable
seller(lexisweb.lexisnexis.com.au, 2018)..
Application
a) In this case, Saqlaim had a special disability, as the same could only understand a little
English. The offeror on the other side, Lance, the offeror was very well fluent in speaking
this language. Saqlaim was not aware of all the terms of the contract and Lance has taken
the advantages of his less knowledge with the language to induce him to enter the
contract of car purchasing. In such a manner, the consent of the Saqlim to contract cannot
understand as a free and valid consent. Applying the decision of the case of Blomley v
Ryan (1956) 99 CLR cannot be held liable for any terms of this contract.
b) Xiaojing made a false and misleading advertisement about the features of the product. In
such a manner, the person has breached the provisions of section 29 of the ACL and
committed an offense under section 151 of the act. Xiaojing made a representation that
moisturizer can reduce the effects of ageing which was not true itself. As she has
breached the provisions of ACL and consumer can held the company liable under above-
mentioned sections and can ask for the remedies.
Conclusion
a) Saqlim is not bound by the contract.
b) Consumers can ask for the remedies in respect to moisturizer

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Case Study 3
Issue
Can Felix sue Xiaojing for the payment of $100?
Rules
The general rule says that for the enforcement of a contract there must be a consideration,
however, the principle of promissory estoppel is an exception of this rule. This doctrine says that
where a party makes any promises to another then equity provides a remedy to later party and the
party who made such promise cannot deny performing the same. This doctrine makes promises
legally binding (Upcounsel.com, 2018). In such a manner, this is to be stated that a contract must
be there between the parties for the application of promissory estoppel. In the case of Waltons
Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 High Court of Australia said that a legal
relationship must be there or expected to be in cases of promissory estoppel
(Constructionlawmadeeasy.com, 2018). It was also granted in this case that cause of non-
performance of promise by defendant; plaintiff must suffer from a detriment. In addition to this,
for a valid application of promissory estoppel, it is also necessary that after such promise, the
legal position of the parties is required to be changed. Further, to apply the promissory estoppel it
is necessary that such promise must be clear and free from every confusion.
The remedy under this doctrine is whatever the necessary to prevent/stop detriment go the
offeree. The doctrine of promissory estoppel works based on a principle that an offeror must
perform his/her promises in those situations where not doing so can lead an unjustified situation
for the offeree.

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Application
In the present case, Felix was working as a casual employee for Xiaojing. He was
engaged in the work of picking the lavender bag for a consideration of $25. A relationship of
employer and employee was there between Felix and Xiaojing. Afterward, Xiaojing has made a
promise to give $100 to Felix for his good performance. The issue of the case started when
Xiaojing refused to perform the promise and to give $100 to Felix. For the application of the
doctrine of promissory estoppel, this is to check that whether all the required elements were
present there or not. Applying the provisions of Waltons Stores (Interstate) Ltd v Maher, this is
to be stated that a pre-existing contractual relationship was there between the parties as Felix was
working as a casual employee of Xiaojing. Further, the causes of this promise, the legal position
of both of the parties have changed, as Felix was owed $100. In conjunction with this, non-
performance of promise can bring detriment to Felix as being a student and casual employee,
$100 is valuable for him.
Conclusion
Felix has a reason to rely upon the doctrine of promissory estoppel and he can sue to
Xiaojing for the non-performance of the promise made by her.

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References
Austlii.edu.au. (2018). Competition And Consumer Act 2010 - Schedule 2. Retrieved From:
http://www5.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html
Birtchnell v Equity Trustees (1929) 35 ALR 273
Blomley v Ryan (1956) 99 CLR 362
Business.gov.au. (2018). Partnership. Retrieved From:
https://www.business.gov.au/planning/business-structures-and-types/business-structures/
partnership
Competition and Consumer Act 2010
Constructionlawmadeeasy.com. (2018). The effect of promissory estoppel. Retrieved From:
http://www.constructionlawmadeeasy.com/Theeffectofpromissoryestoppel
Legal Match. (2018). What is an Unconscionable Contract. Retrieved From:
https://www.legalmatch.com/law-library/article/what-is-an-unconscionable-
contract.html
Lexisweb.lexisnexis.com.au. (2018). Overview — False, misleading and deceptive conduct.
Retrieved From: http://lexisweb.lexisnexis.com.au/Practical-Guidance-Topic.aspx?
tid=2310
Polkinghorne v Holland (1934) 40 ALR 353
Upcounsel.com. (2018). Principle of Promissory Estoppel: Everything You Need to Know.
Retrieved From: https://www.upcounsel.com/principle-of-promissory-estoppel
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387