Commercial and Corporation Law Assignment PDF

Running head: COMMERCIAL AND CORPORATION LAW 0
Commercial and Corporation Law

COMMERCIAL AND CORPORATION LAW 1
Part A
Question 1
This file will evaluate whether the legal system implemented in India comply with
Hart’s three-part legal system. Furthermore, this file will compare the Australian legal system
with Indian legal system. Herbert Lionel Adolphus Hart developed a three-party legal system
based on primary and secondary rules which apply to a country. The Indian legal system is
based on the legal system of the United Kingdom1. The Indian legal system has developed a
system in which both primary and secondary rules exist. The Constitution provides separation
of power between the judiciary and executive authorities, and it was established in 1950, and
since then it has amended 101 times. The Constitution provides the power of lawmaking to
the parliament in India based on which they can implement new laws or amend previous
once. The sources of law include legislation, constitution, customary law, and case law. The
government has the power of proposed laws in the parliament based on gaps in the legal
system, and the ministers in the parliament argue whether such proposed law (bill) should be
accepted. There are two parliamentary bodies in India which include Rajya Sabha and Lok
Sabha2.
The Constitution clearly defines the process of lawmaking. The government proposed
a bill in the parliament, and both the parliamentary houses (Rajya Sabha and Lok Sabha)
argue whether it should be a law. After receiving acceptance on the bill for the parliament, it
is sent to the President for signature after which it becomes law and applies to the country3.
The Constitution clearly defines the laws which are required to comply by everyone in the
country and breaching of such regulations resulted in legal consequences. The Constitution
has divided judiciary power between courts, and there are different courts for entertaining
criminal and civil matters. The Supreme Court is the highest judiciary entity, and it has the
power of judicial review as per article 32 of the Constitution based on which it can check the
working of the government4. The judgment of higher courts is required to comply with lower
courts, and the parties of a suit can appeal against an order if they are not satisfied with the
1 Arthur Berriedale Keith, A Constitutional History Of India, 1600-1935 (Taylor and Francis, 2017).
2 Raj Kumar Bhardwaj and M. Madhusudan, "Online Legal Information System (OLIS) Leveraging Access To
Legal Information Resources In Indian Environment" (2016) 36(1) DESIDOC Journal of Library and
Information Technology.
3 Prateek Tak, "Legal Aid: A Boon For The Indian Legal System" [2012] SSRN Electronic Journal.
4 Rajvir Sharma, "Judiciary As Change Agent: Some Insights Into The Changing Role Of Judiciary In India"
(2012) 58(2) Indian Journal of Public Administration.

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judgement of the court. The Indian legal system complies with the provisions given by Hart’s
three-part legal system.
Rules of Recognition
HLA Hart stated that rules of recognition from the foundation of a legal system and it
provide rules which are required to comply with both private and government officials.
Similarly, Indian legal system provides a number of primary rules which are required to
comply by citizens and the government officials5. These are determined as primary rules
which are mandatory to be followed by every party. Furthermore, the process of creating and
ascertaining the validity of a law is clearly defined by the Constitution as well.
Rules of Change
In Indian legal system, the sources of law are clearly defined along with the process of
changing, adding, removing and deleting the laws. Furthermore, the Supreme Court has the
power to analyse the lawmaking process of the government which avoids misuse of the legal
system. The old laws are reviewed by the government as well to introduce new laws that
replace them6.
Rules of Adjudication
The Constitution clearly defines the adjudication process in Indian legal system, and
different courts are established in the country that entertains both criminal and civil cases.
The ruling of a higher court applies to other courts, and the parties of a suit have the right to
apply for an appeal if they are not satisfied with the ruling7.
The Australian legal system is very similar to the Indian legal system as both of them
are based on English law, and they comply with Hart’s three-part legal system. In Australia,
the Constitution of 1901 clearly defined the executive, judiciary and legislative powers and it
distributes it between different authorities8. The Constitution is the key document which is
also based on a number of primary and secondary rules. Similarly, in Indian legal system, the
Constitution is the key document which provides provisions regarding judiciary, legislative
5 Yashomati Ghosh, "Indian Judiciary: An Analysis Of The Cyclic Syndrome Of Delay, Arrears And Pendency"
(2017) 5(1) Asian Journal of Legal Education.
6 Tarumoy Chaudhuri, "Relations Of Judiciary And Executive In India" [2007] SSRN Electronic Journal.
7 Sumita Bhowmik, "Sustainable Development And Indian Judiciary" [2012] SSRN Electronic Journal.
8 Francesca Bartlett and Reid Mortensen, "Integrity In Legal Practice: A Report From The Third International
Legal Ethics Conference, Gold Coast, Australia" (2009) 12(1) Legal Ethics.

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and executive duties. In Australia, the government is authorised to propose the law in the
parliament which is accepted after arguing its importance. It is implied on the country after
the royal assent of the Governor-General. A similar procedure is applied in India as well
however the President signs the bill to authorise it as a law. The judicial system of both the
countries is similar as well. The judgment of higher courts are applied to smaller courts, and
the parties have right to appeal. Furthermore, the provision for adding, deleting, removing
and amending the law is clearly defined by the Constitution of both countries9. Conclusively,
both the countries have a similar legal system that complies with the provision of Hart’s
three-part legal system.
9 Russell David Hinchy, The Australian Legal System (Pearson Education Australia, 2008).

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Part B
Question 2
Issue
The main issue, in this case, is the validity of the contract between Angelo and Barry
based on the fact that Angelo posted a misleading advertisement?
Rule
While entering into a contract, it is important for parties to differentiate between an
offer and an invitation to treat since only one of them establish a legal relationship between
parties. In case of an offer, the party making such offer is called offeror, and the party which
is receiving such offer for acceptance is called offeree. An offer requires commitment for the
offeror in a way that if the offeree accepts the offer, then both the parties are bound by its
terms. An offer becomes a contract after acceptance for the party. However, an invitation to
treat does not require commitment from the parties. In an invitation to treat, the parties are
not bound by a legal contract because an invitation to treat cannot accept by the parties10. It is
just an invitation for entering into a legal contract based on which the party has to contact the
person in order to establish a contract. It focuses on the supply of information to parties in
order to attract them for a contractual relationship. In Pharmaceutical Society of Great
Britain v Boots (1953) 1 QB 401 case, a company introduce a self-service system in which
customers can pick up goods from shelf and take them to the cash counter to pay. An action
was filed against this system by the Pharmaceutical Society of Great Britain for sale of
pharmaceutical products in the shop because the law provides that they should be sold in the
presence of a pharmacist11.
The Court of Appeal held that goods which are displayed on a shelf could not be
treated as an offer instead they are an invitation to treat. Customers have the option to take
the goods and make an offer to purchase at the cash counter, and the shop assistants have the
option to either accept or deny such offer. Therefore, the contract is concluded in the
presence of a pharmacist. Although corporations can post advertisement to invite people to
purchase their products however they have to comply with the provisions of the Consumer
10 G. C Cheshire et al, Cheshire & Fifoot's Law Of Contract (LexisNexis Butterworths, 2002).
11 Rokiah Kadir, "Rules Of Advertisement In An Electronic Age" (2013) 55(1) International Journal of Law and
Management.

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and Competition Act 2010. The Schedule 2 section 29 of this act defines a party’s liability to
post a misleading advertisement to attract other parties12. Misrepresentation is use of
misleading or false face by a party for inducing another to create a legal relationship. In case
of misrepresentation of a fact during construction of a contract, parties can claim for
damages. In Smith v Land and House Property Corp (1884) 28 Ch D 7 case, a party sold his
property by stating that the tenant is ‘most desirable’ Later, the tenant becomes insolvent, and
the aggrieved party sued the owner. The court held that use of misleading and false statement
to create a contract is misrepresentation based on which aggrieved party can claim for
damages13.
Application
The advertisement posted by Angelo contains wrong information such as the monthly
profit is $20,000 and there is no competitor of the business. These statements are not offered
because they are just supply of information and parties have to contract Angelo for giving
their acceptance to purchase his business. Therefore, Angelo cannot be bound by the false
statements of his advertisement (Pharmaceutical Society of Great Britain v Boots). However,
Barry can demand damages as per the Consumer and Competition Act which provides that
giving misleading or false information constitutes as misrepresentation (section 29). Based on
this act, Barry can demand damages for Angelo since he misleads him into purchasing the
business by posting a false advert. When Barry asked Angelo about the monthly expenses of
the business, he told him that they are $8,000. However, Barry later found out that the actual
monthly expenses are $8,500. Angelo provided him wrong information for inducing him into
signing the contract. The aggrieved party of misrepresentation in a contract can demand
damages (Smith v Land and House Property Corp). Thus, Barry can file a suit against Angelo
for giving him wrong information at the time of contract, and he can demand damages from
him.
Conclusion
Therefore, the advertisement posted by Angelo was not an offer because it requires
parties to contact him in order to accept the offer. However, Barry can file a suit against him
based on the Consumer and Competition Act since parties cannot use the misleading or false
12 "The Interface Between Competition And Consumer Policies" (2010) 11(1) OECD Journal: Competition Law
and Policy.
13 David Echeverry Botero, "Contract Interpretation Law In Australia: It Is A Maze, Not A Straight Way" (2015)
2(41) IUSTA.

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information to induce parties to a contract. Furthermore, Barry can claim for damages
because Angelo provides wrong information to him regarding monthly expenses.

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Question 3
Issue
The main issue is whether Barry can claim for a breach of the contract against
Angelo?
Rule
The parties to a contract have to comply with the guidelines given in the contract, or
else it can cause legal consequences. The parties which did not comply as per the guidelines
of a contract are held guilty of breaching the contract. The aggrieved party at the time of
breach of the contract has the right to take legal action against the breaching party. The
parties can only demand damages which occurred due to the breach of the contract as given
in Pilkington v Wood (1953) Ch 770 case. In this case, a party sold his property to another
however he did not tell him that it has a defective title. After some time, the owner gets a new
job, and he has to relocate to a new location14. However, he faces difficulty in selling the
property because of its defective title. He filed a lawsuit against the previous owner claiming
that he breached the contract, and he demanded damages from him for selling him a property
with defective title and damages because he was not able to sell the property. The court
provided a judgement that the party has the right to claim for damages since the previous
owner breached his contract for not providing him information about the breach of the
contract.
However, the court provided that the party cannot claim for damages because he had
to relocate and sell his property because it was not included in terms of the contract. In case
of a breach, there are a number of remedies available for the parties to a contract. One of the
remedies is repudiation of the contract in which the party demand for termination of the
contract and along with it termination of his/her legal rights and liabilities. Another remedy is
rescission in which the party is put to the pre-contractual situation which assists them in
avoiding damages15. The aggrieved party can demand an injunction from the court in which
the court gives an order to stop the party from performing or not performing an act which
resulted in breach. The aggrieved party can also demand monetary rewards from the party as
damages. Furthermore, the aggrieved party can demand specific performance in which the
14 A. Learmonth, "'A Regrettable Blunder': Marley V Rawlings [2011] EWHC 161 (Ch)" (2011) 17(5) Trusts &
Trustees.
15 J. W Carter, Contract Law In Australia (LexisNexis Butterworths, 2013).

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court enforces the breaching party to perform a specific action to avoid the breach of the
contract16.
Application
Angelo did not Barry that the van was on a lease. Barry also has to pay the lease
amount which increased his monthly expenses. Barry has the right to claim for breach of
contract and demand for remedies. Barry can claim for rescission of the contract in which he
can demand to put in the place where he should have been in Angelo does not breach the
contract. Furthermore, he can claim for charges that he had to pay for the lease of the van
(Pilkington v Wood). Barry can claim for rescission and demand full payment of $15,000
from Angelo. He also paid charges for the lease which he can also claim for Angelo. In case
of the loader, the information about its working condition was not given in the contract.
Furthermore, no conversation took place between Barry and Angelo regarding its working
condition. Thus, due to the ambiguity of the contract, Barry will face difficulty in claim for
damages regarding the loader.
Conclusion
Therefore, Angelo has breached the contract based on which Barry can claim for
remedies. He can demand full repayment of $15,000 and additional charges that he paid for
the lease of the contract. He might face difficulty in claiming money for the loader because
no information was available in the contract regarding its working condition.
16 Gaurang Jajodia, "Remedies For Breach Of Contract" [2012] SSRN Electronic Journal.