Commercial Law and Franchising

This report provides a detailed analysis of commercial law, covering various forms of businesses including company, partnership, sole proprietorship, and franchising. It delves into employment law, highlighting its importance in different industries. The report also examines criminal law, referencing specific sections to clarify case studies. Additionally, it discusses the Competition and Consumer Act 2010 and presents a balanced view of franchising's advantages and disadvantages. This comprehensive review is essential for students seeking to understand commercial law principles and their applications.

COMMERCIAL LAW

Contents
INTRODUCTION........................................................................................................... 2
TASK 1......................................................................................................................... 2
Case study 1................................................................................................................ 2
TASK 2......................................................................................................................... 4
Case study 2................................................................................................................ 4
TASK 3......................................................................................................................... 5
Competition and consumer act............................................................................................. 5
TASK 4......................................................................................................................... 6
Advantages and disadvantages of franchising as business structure............................................6
CONCLUSION............................................................................................................... 7
REFERENCES............................................................................................................... 8

INTRODUCTION
Commercial law is that law that governs trade, sales, commerce as well as all the
businesses and individuals who take part in such activities. Commercial law includes finance and
banking, taxation law, trade practices, securities and deviation along with consumer law.
Commercial law is broad and offers road to success for ambitious graduates who wish to
perform in their careers. The types of law practises under commercial law are contract law, data
protection law, employment law, and corporate law.
The report will include introduction to Australian law relating to employment law in
Australia along with explaining the purpose of award and term of employment contract etc. the
report then includes information about parliament and constitution in which it will outline crimes
act 1958 and penalty range etc. Later on, it will include function of the competition and
consumer act along with its examples enforced by Australian competition and consumer
commission. It will depict the advantages and disadvantages of franchising as the business
structure.
TASK 1
Case study 1
The 22 year old graduate from financial planning program at RMIT got employment
contract to work with Grice Slaughterhouse and Associates firm which deals in slaughtering and
meat packing (Kadish, 2016). The industry in which the individual will likely to be working is
meat industry that includes slaughtering and packaging of meat.
The award rates increased with Australian industrial relations commission and wage
related allowances increased by 3 %. The award shall known as ‘’ Meat processing industry
award’’. The award is established in the respect of the industry of:
a. Export abattoirs, licensed as under the Export control act 1982 or meat premises
which are licensed under meat hygiene act 1985 (Lauterwein, 2016).
b. Manufacturing of small goods
c. Processing of meat as well as meat products and poultry and pet food.
d. Some or all above
The award includes the following:
1. Wholesaling of meat, meat products and also pet food
2. Retailing of meat, meat products and poultry.

The award interest the following employee organizations have an interest in this award
under section 63 (10) of the industrial relations act, 1984. It also interests Australia meat
industry employees union, The National Meat Association etc.
As 22 year old graduate just joined the industry therefore that is known as Meat
industry employee level means an employee that is appointed by the employer to the
level who is undertaking up to three months training which include information on the
enterprise, conditions of employment, introduction to fellow workers, training and career
path opportunities, plant layout, work and documentation, equal opportunity and control
of quality (Warner, 2017). At this level in the industry, the employees perform duties
under direct supervision and under employee training.
Employment law in Australia is a contract based on a workplace agreement
between employer and group of employees or industry based awards (Employment law,
2019). It needs to be distinguished from agreements with independent contractors. It is an
agreement of rights and responsibilities agreed between employer and employee. The
conditions under this contract need to be on top conditions in the National employment
standards. In some industries employment conditions are set out in an award and award is
a legal instrument that is created by industrial tribunal.
The level 6 employee in meat industry is an employee appointed by the employer
who works above and beyond a person at level 5 and the level of training of employees.
Under this an employee performs the skills attained through proper training according to
the prescribed standards (Thompson, 2015). The employee work under supervision either
individually or with the team. Employees understand and implement quality control
techniques. It provides general trade level guidance and assistance as part of the team
work.
Under level 6, the employee act as a trade person who has completed at least 6
modules towards a relevant associate diploma. Employee needs to be able to format
complex documents that includes technical data, tables, graphs etc. and will produce the
documents in compliance with regulations. It also includes using advance knowledge of
software packages, including developing new databases or spreadsheet models,
performing reconciliation function etc. the supervision of clerical employees including
tasks like checking progress of an individual and correcting errors. The wage relativity
under level 6 to meat industry employees is 105 %. The base rate of meat industry level 6
is 438.10. The safety net adjustment is 161 and weekly wage rate is 599.10.
TASK 2
Case study 2

The crimes act 1958 is an act of parliament of Victoria. The act codified most common
law crimes in jurisdiction (Criminal law in Australia, 2019). The crime act outlines 5 different
forms of crime under Australian law, these forms of robbery are stealing from a person,
aggravated, aggravated that results in wounding, Armed in company, armed that results in
wounding. All of these offences carry maximum penalties that differs from each other and
require different levels of proof from the prosecution. The most prosecuted offence is robbery or
stealing and to be found guilty in case it contains 3 different elements of crime which includes
stealing and violence in order to steal.
Crimes act 1958, section 75 (1), a person is guilty of robbery if he steals and immediately
before or at the time of doing so and in order to do so in case he forces on any person or seeks to
put any person in fear then he or the other person will be then and there subject to force. If force
is used or threatened in order to commit a theft, the offence becomes the more serious charge of
robbery. If two or more people jointly commit robbery in company each is guilty of aggravated
robbery. [s 137 (2)]. The penalty for basic offence is imprisonment for 15 years and aggravated
offence is imprisonment for life.
Under section 25, a person who sets a trap or device with the intention of causing, or being
reckless as to whether or not there is caused, serious injury to another person (whether a
trespasser or not) is guilty of an indictable offence (Kerber, 2016). The penalty level is 4
imprisonments which is 15 years maximum. Under section 26, a person who sets a trap or device
with the intention of causing or being reckless as to whether or not there is caused; serious injury
to another person is guilty of an indictable offence. The penalty under this is level 5
imprisonment which leads to 10 years maximum. In this case the Turner will get imprisonment
of 15 years which is of level 4.
Indictable offences are the offences where the accused has the right to have the matter
heard before a judge and jury in a higher court usually district and Supreme Court. These
offenses are considered more serious offences than summary offences which are heard in lower
courts without a jury. The vast majority of indictable offences are nonetheless head in the
magistrate’s court in the same way as summary offences. There are 2 categories of indictable
offences: major and minor indictable offences. Major indictable offenses must be heard in
district court or the Supreme Court. Criminal tries in both these courts and are presented before a
judge and jury unless the defendant chooses to have a trial by a judge without a jury. The
supreme court must hear a charge of murder and also hears other serious major indictable
offences. All other major indictable offences can be heard in the district court. Minor indictable
offences are heard in the magistrates court, where threes no jury unless the defendant chooses to
go to a higher court such as the Supreme Court.
Under this case, turner may found guilty and will have to face imprisonment for 15 years.
In case person dies of electrical fencing, turner might find guilty in offence of murder.

TASK 3
Competition and consumer act
The competition and consumer act 2010 (CCA), covers most areas of the market: the
relationships between suppliers, wholesalers, retailers and consumers. The purpose of this act is
to enhance welfare of Australian citizen by promoting fair trading and c o petition and through
the provision of consumer protections. It covers safety of product and labelling, unfair market
practices, monitoring of prices, codes of industry, regulation of industry that includes airports,
gas, and telecommunications. It also includes mergers and acquisitions.
The Australian consumer law (Schedule 2 of the CCA) – misleading or defective
product ,unfair trade practices , warranties and conditions, safety of products and their condition,
liability of manufacturers with safety related offences etc are included in this act. The conducts
which contravenes the ACL includes:
 The purpose of ACL is to treat a person as a consumer if they have acquired goods and
services that are prices less than $ 40,000. A person is also a consumer if the goods are
more than $ 40000 but they are need to be acquired for personal, Domestic or household
consumption (Davidson and et.al, 2017).
 It leads to general protections which create business standards in the market that includes
general ban on misleading conduct of trade and commerce. Section 18 of ACL prohibits
an individual in trade or commerce from engaging in misleading conduct. This is applied
to whole economy not just supply of goods or services. The conduct may be
unconscionable if its harsh, it must be more than just unfair and must be against
conscience and against society.
 A provision that makes unfair terms in consumer contract are void in nature. A term
unfair reflects significant imbalance in the right of parties arising under the contract. It
would cause financial and non financial compensation to the aggrieved party.
 A specific protection which identifies business forms and their conduct include
provisions such as ACL prohibits misleading representations and supply of unsolicited
goods and coercion or selling harassment (Griggs and et.al., 2018). The other thing is that
ACL provides is guaranteed rights for consumers related to goods or services and sets
national rules that govern unsolicited transactions of sales. It focuses on consumer
product safety law and regulatory framework that are applied nationally which includes
standards for safety.
 The ACL creates national enforcements powers to be used by all the consumers’ law
regulators including penalties and remedies in case of breach of contract. Under ACL,
consumers can seek for refund or repairs in case the suppliers fail to satisfy its obligations
in relation to guarantees of consumers.

 The maximum penalties per breach of the ACL including unconscionable conduct,
making false or misleading representations and supplying consumer goods or certain
services which do not comply with safety standards.
 The person has not supplied goods or services of that description in Australia on the same
terms and conditions in the period of 12 months before the current supply and in case
where notice has been given to the person under subsection (5), the current supply is not
in accordance with the notice. The penalty is 100 penalty units.
TASK 4
Advantages and disadvantages of franchising as business structure
The franchise council of Australia limited (FCA) is the peak body for $ 182 billion sector
in Australia which represents franchisors and service providers of this sector. Membership of
FCA is voluntary and is open to all the organisation or individual that is involved in franchise
sector that includes franchisees, lawyers, accountants, banks, academics and publishers.
It is an effective growth strategy that allows the individuals to have strong relationships
with likeminded businesses which share common vision to achieve growth. It offers a range of
opportunities and benefits but comes with few challenges where additional support may be
needed to maximise full potential.
It is a business structure which brows faster by accessing external capital. It improves the
bottom line by securing better rates through strong buying power (O’Neill, R, 2017). It increases
efficiencies with replicable systems. It also increases sales by increasing the volume of customer
services and products and improves brand loyalty and recognition by retaining stakeholders.
In short the franchise is an agreement between the owner of the business and the person
who wants to open a store using the name of that existing business or brand. The brand of
business is always a functional business model which is mostly an existing chain of restaurants
such as KFC and MC Donald’s. The form of agreement between franchisor and franchisee is a
form of licensing. A license is a kind of contract where both parties agree to all the terms and
conditions that are mentioned in the contract (Sternlight, 2016). The franchisee agrees to pay the
franchisor a license fee for the use of the particular brand. The franchisor on the other hand
provides all the services and operations to help the franchisee that are essential in running the
business. The franchisor often gives a lot of support to it like access to suppliers, IT support and
training etc. The advantages and disadvantages of the franchising is as follows :
Advantages Disadvantages
It offers independence of small business It is done after entering into a formal

ownership supported by the benefits of a big
network of business.
Running a franchise do not need business
experience as they are usually provide the
training which is needed to operate their
business model.
It has greater rate of success than start ups.
It is easier to find finance that is secure for
franchise. It is less costly.
It has an image and reputation, proven
management and work practices and also
access to national advertising and ongoing
support.
It reduces the risk of business failure.
The system under franchise are usually tested
and be successful.
Buyers are usually aware as the brand name is
already popular among them.
agreement with the franchisor.
The franchise agreement creates burden as it
dictates how to run a franchise therefore it
leads to very less creativity.
It is less independent in nature as all the rules
and regulations are described by the franchisor.
There are few restrictions on the product
franchise operate, the products which you sell
and the suppliers franchise use.
Bad performances by other franchise can affect
other franchises as well which can affect
reputation of the franchise.
Buying franchises leads to sharing of profit
with the franchisor.
Franchisors do not have to renew an agreement
at the end of the franchise term.
The owner of franchise will not be able to
implement their own ideas.
Excessive costs and fees as the initial fee and
monthly service fee of the franchise are quite
high.
CONCLUSION
The report concluded the commercial law which deals with the law that governs trade and
commerce in the country for smooth working operations. There are many forms of businesses
that are governed under this law which includes company, partnership, sole proprietorship,
franchising etc. The report further focused on few case studies which are used to give better
understanding of the law. It included employment law and its importance along with the type of
industry under which the individual would work along with the purpose of award in that
industry. The report also talked about criminal law and showed different section will clear the
answer of case study 2. Moreover, it depicted the competition and consumer act 2010 and at last
summed up the report with advantages and disadvantages of franchising.

REFERENCES
Books and journal
Clarke, M.A., and et.al., 2017. Commercial law: Text, cases, and materials. Oxford University Press.
Davidson, F., and et.al., 2017. Mental health and criminal charges: variation in diversion pathways in
Australia. Psychiatry, Psychology and Law. 24(6). pp.888-898.
Griggs, L., and et.al., 2018. Commercial and Economic Law in Australia. Kluwer Law International
BV.
Kadish, S.H., Schulhofer, S.J. and Barkow, R.E., 2016. Criminal law and its processes: Cases and
materials. Wolters Kluwer Law & Business.
Kerber, W., 2016. Digital markets, data, and privacy: competition law, consumer law and data
protection. Journal of Intellectual Property Law & Practice. 11(11). pp.856-866.
Lauterwein, C.C., 2016. The limits of criminal law: A comparative analysis of approaches to legal
theorizing. Routledge.
O’Neill, R., 2017. Franchising. Busidate. 25(2). p.3.
Sternlight, J.R., 2016. Hurrah for the Consumer Financial Protection Bureau: Consumer Arbitration as
a Poster Child for Regulation. . Mary's LJ. 48. p.343.
Teramura, N., Nottage, L.R. and Morrison, J., 2019. International Commercial Arbitration in Australia:
Judicial Control over Arbitral Awards. Sydney Law School Research Paper. (19/24).
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts and
readings. McGraw-Hill Education.
Warner, R.M. and McAdam, M., 2017. Transnational criminal law in Australia.
Webb, E., 2016. Papering over the void—Could (or should) consumer law be used as a response to
elder abuse?. Competition & Consumer Law Journal. 24. pp.101-127.
Online
Criminal law in Australia, 2019. [Online]. Available through :
<https://www.gotocourt.com.au/criminal-law/indictable-offences/>

Employment law, 2019. [Online]. Available through : < https://www.fairwork.gov.au/>