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LAW 6000 – Business and Corporate Law

Added on - 19 Nov 2021

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Running head: BUSINESS LAW
Business Law
BUSINESS LAW1
Case Study 1
Legal issue
Does the partnership will be bound by the contract that is formed between Lance and
Lynton?
What are the legal remedies that are available for partnership?
Legal principles
When two or more persons agreed to establish a business and they make an agreement to
share the earnings or losses with each other than a partnership is formed. The partnership is
governed by thePartnership Act1892 (NSW). A good partnership is governed by the
relations between the partners. The general rule of partnership suggests that all partners have
the liability for the actions of other partners. In a partnership, all the partners will be
personally liable for the debts of the business therefore the liability of the partners are
deemed unlimited. Section 10 of the Act provides the provisions that provide the liabilities of
the partners. It also provides that all partners have the liability for the decision of the other
partner in the course of business and having the appropriate authority (Australian Capital
Territory Current Acts, 2018). InPolkinghorne v Holland(1934) 40 ALR 353 case, it has
been held that the liability to pay the debts will be bear by all partners because the action of a
partner will be bear by all the partners. Moreover if the partners have failed to obey the
fiduciary duties as mentioned in the caseUnited Dominions Corp Ltd v Brian Pty Ltd(1985)
157 CLR 1, it has been held in this case that the fiduciary duties found to be breached when
the partner not able to come or not in terms according to the contract. Therefore, if the partner
failed to apply the terms that have been mentioned will be liable for the breach of the
fiduciary duties (Erdiaw-Kwasie, and Alam, 2016).
Application
In the case study the facts states that a contract has been constructed to buy car worth $25,000
between Lance and Lynton for the business purpose. However other partners has instructed
lance not to spend more than $20,000. Lynton has the idea that he is the partner in the
business and the car has been purchased for the business purpose but he does not have the
idea that he has a budget of $20,000. All the partners has the consent to buy a new car and
they will use for the business purpose. Thus according to the Partnership Act, 1892 (NSW)
BUSINESS LAW2
purchase of the car has been considered as the ordinary course of business. It means that
other partners will be liable to pay debts of the car. Every partner has unlimited liability and
to pay the debts individually on the action of the other partners as established in the case
Polkinghorne v Holland. As instructed Lance has not acted according to the terms of the
contract, therefore other partners can take the action against lance for the breach of fiduciary
duties as established in the caseUnited Dominions Corp Ltd v Brian Pty Ltd.
Conclusion
Thus, it can be said that the partners will be liable to pay the debts of the car for the contract
that is held between the lance and Lynton. However, other partners have the right to file a
suit against Lance to recover the extra money that has been spent on purchase of car for the
breach of the fiduciary duties.
Case Study 2
Issue
Do the customers have the right to claim the remedies against the false advertisement?
Does the contract have the binding effect on the Saqlaim?
Legal principles (Rule)
In Australia, it is required while doing the business have to comply with guidelines that have
been issued by the Australia Consume Law in the Schedule 2 ofCompetition and Consumer
Act2010 (CCA) is enacted by the parliament of Australia. The Act initiates various
prohibitions that are false and misleading advertisements. It has been stated that liability will
occur on the organisation according to the section 29 for issuing the false advertisements to
the public in which that have made the deceptive and false remarks. The Act has the objective
to protect the consumers to protect consumers from misleading advertisements and to prevent
organisations from making the false information regarding the product specifications. These
have an adverse effect on the market by attracting customers with the misleading information.
InACCC vH.J.HeinzCompany Australia Limited[2018] FCA 360 (19 March 2018) case,
the organisation has been held liable for providing misleading information about the health
benefits of the product. The company has been fined $2.25 million(Law, 2018).
In accordance with the terms of the contract the parties has been bind by the legal terms and
actions has been taken against organisation in the case when contractual duties had been
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