This text discusses partnership law, consumer law, and promissory estoppel in business and corporate law. It provides case examples and relevant legal provisions. It also offers legal remedies available to parties in different situations. The text is suitable for students studying business and corporate law.
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1 Question 1 Issue Whether a liability can be imposed by Lynton on all partners in the partnership based on the actions of Lance? Whether any legal remedies available for other partners against Lance? Rule A legal relationship that is constructed between two or more parties for the purpose to run a business is referred to a partnership. It is a common form of business structure, which is selected by parties to run their business with others. The provisions regarding governance of partnerships are given in thePartnership Act1892 (Austlii, 2018). As per this act, a legal relationship that is formed between two or more parties who decides to work together with anobjectivetogenerateprofitsisconsideredasapartnership.Whilemanagingthis business structure, various duties are imposed by the Act on partners to protect their rights. The liability of members is unlimited in a partnership; based on this unlimited liability, the court can utilise the assets of partners to pay off the debts of the business. Moreover, all partners are bound by the actions of a single partner as provided by section 10 of this act. As per this section, the partners are bound by the actions of other partners. A liability can be imposed on each partner based on the actions that are taken by a partner that comes within the scope of the ordinary course of business.Polkinghorne v Holland(1934) 40 ALR 353 case is a good example to understand this duty. The court provided in the judgement of this case that all partners are jointly and severally liable towards each other (Morse, 2010). The court provided that a partner acts as the agent for other partners based on which they are also bound by the actions of the first partner which are taken within the scope of the business.Moreover,whiletakingthe decisionsforthe business,the partners have a fiduciary duty towards other partners. Based on this duty, they have to take appropriate care while taking business decisions to avoid causing harm to other partners. Application In the present case study, Lance was acting on behalf of the entire partnership because he was authorised to purchase a car. Although a budget was fixed by all partners, however, Lynton did not have information regarding this decision of the partners. Since Lance was within the scope of the business, Lynton has the right to bind the entire partnership to pay off
2 his debt (Polkinghorne v Holland). Other partners are liable under section 10 of the act. Moreover, since Lance did not act in good faith, he has violated his duties towards other partners. Based on which other partners can claim damages from him for extra payment of $5,000. Conclusion Conclusively, Lynton can impose liability on the partnership. However, other partners have the legal remedy to recover the extra sum that they had due to the actions of Lance.
3 Question 2 Issue Whether a legally binding contract is constructed based on which Saqlaim can be held liable? Whether any legal remedy available for customers against false advertising? Rule The customer rights are protected by the government under the Australian Consumer Law. These regulations are given under theCompetition and Consumer Act2010. As per these regulations, entities are prohibited from making any statements regarding their products or services that are misleading or deceptive or likely to mislead or deceive customers. These provisions are given under section 18 of the Act. Moreover, while advertising there products or services, entities are restricted under section 29 of this Act to ensure that they did not many any claim which is misleading or deceptive or likely to mislead or deceive. InACCC v A Whistle & Co (1979) Pty Limited(2015) FCA 1447 case, the court provided that posting false internet reviews to promote products are considered as violation of section 29 (Jade, 2018). On the other hand, a contract is legally binding agreement and its terms are enforceable on its parties. However, in case the contract is based on unconscionable conduct, then the victim party has the right to terminate the contract. This principle was established by the court in the case ofCommercial Bank of Australia v Amadio(1983) HCA 14. In this case, the claimant was poor in English and the defendant took advantage of this fact to form a contract without disclosing all the terms of the contract (Hepburn, 2013). The court provided that this contract is not valid since it is based on unconscionable conduct of the party based on which it can be set aside. Application In the present case study, a false advertisement is posted by Xiaojing in which she has made false claims about the product that it reduces the aging effect. This advertisement is violating the privacy of customers since it is false and misleading. They have a legal remedy under section 29 of theCompetition and Consumer Act. They can hold Xiaojing liable for posting a false advertisement in which she has made a false claim regarding the product. Moreover, Saqlaim did not have proper understanding of English and Lance took advantage
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4 of this fact. He sold the Ute to Saqlaim with his fast taking skills and without giving him complete information about the Ute. Saqlaim has the right to set aside his obligations raise under this contract based on the principle of unconscionable conduct. He cannot be bound by the terms of the contract because he was not aware about them while signing the contract. Conclusion It can be concluded that customers have rights under section 29 based on which entities cannot make misleading or deceptive claims regarding their products and Xiaojing can be held liable for the same. Moreover, Saqlaim can set aside the contract based on the principle of unconscionable conduct.
5 Question 3 Issue Whether any legal rights are available for Felix against Xiaojing in order to claim $100 as promised by her? Rule As discussed above, a contractual relationship binds the parties into a legal relationship. The parties have to right to legally enforce the terms of the contract on each other if a party did not comply with these terms. People often make promises or claims to third parties while relying on their contractual relationship that they did not wanted to fulfil. In those situations, the victim party has a legal remedy given under the principle of promissory estoppel. As per this principle, the party is stopped from going back on his/her promise that is made based on the contractual rights. In order to apply this principle, certain elements must be fulfilled by the parties. A key element of promissory estoppel is that the parties must already be in a pre- existing legal relationship that is than modified by a party by making a promise as given in Combe v Combe[1951] 2 KB 2015 case. A clear and unambiguous promise is another key requirement of promissory estoppel. The court provided inWoodhouse A.C. Israel Cocoa Ltd. v Nigerian Product Marketing Co. Ltd. [1972] AC 741 case that the promise that is given by the contractual party by expressed clearly without any ambiguity. Another element is that the relationship which already exist between parties must change after making the promise as provided by the court inAlan v El Nasr[1972] 2 WLR 800 case. The last element is highlighted by the court inCrabb v Arun DC[1976] 1 Ch 179 case by providing that it must be equitable and reasonable to apply the principle of promissory estoppel in a particular case (Turner, 2013). The judgement given in Ajayi v Briscoe(1964) 1 WLR 1326case is relevant because it was held that it is not a necessary condition that the victim party must suffer any detriment in order to rely on the principle of promissory estoppel (Samuel, 2016). Application In the present case study, a pre-existing relationship exists between Felix and Xiaojing because Felix was hired by Xiaojing to pick lavender (Combe v Combe). This relationship was modified between the parties when Xiaojing promised to pay extra $100 to Felix for the
6 great work he did while clearing garden beds. Xiaojing later turn on her promise and she denied giving payment to Felix. The promise for payment of $100 was clearly expressed by Xiaojing (Woodhouse A.C. Israel Cocoa Ltd. v Nigerian Product Marketing Co. Ltd.). It is also inequitable to let her turn on her promise (Crabb v Arun DC). Although Felix did not suffer a detriment, however, it is not a key element to apply the principle of promissory estoppel (Ajayi v Briscoe). Conclusion Therefore, Felix has the right to claim $100 from Xiaojing as per her promise based on the element of promissory estoppel.
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7 Reference List ACCC v A Whistle & Co (1979) Pty Limited(2015) FCA 1447 Ajayi v Briscoe(1964) 1 WLR 1326 Alan v El Nasr[1972] 2 WLR 800 Austlii.(2018)PartnershipAct1892.[Online]Austlii.Availableat: http://www8.austlii.edu.au/cgi-bin/viewdb/au/legis/nsw/consol_act/pa1892154/[Accessed 23rdNovember 2018]. Combe v Combe[1951] 2 KB 2015 Commercial Bank of Australia v Amadio(1983) HCA 14 Competition and Consumer Act2010 Crabb v Arun DC[1976] 1 Ch 179 Hepburn, S. (2013)Principles of Equity & Trusts (Aus) 2/e. Abingdon: Routledge. Jade. (2018)Australian Competition and Consumer Commission v A WhistleCo (1979) Pty Limited.[Online]Availablefrom:https://jade.io/j/?a=outline&id=421949[Accessed23rd November 2018]. Morse, G. (2010)Partnership Law.Oxford: Oxford University Press. Partnership Act1892 Polkinghorne v Holland(1934) 40 ALR 353 Samuel, G. (2016)Epistemology and method in law. Abingdon: Routledge. Turner, C. (2013)Contract law. Abingdon: Routledge. Woodhouse A.C. Israel Cocoa Ltd. v Nigerian Product Marketing Co. Ltd.[1972] AC 741