Corporation and Business Law

The paper applies provisions of Fair Work Act 2009 and common law to address factual scenario. The two issues include whether Kent Institute Australia(KIA) can terminate Professor Berlin’s contract, Whether Repairer Pty Ltd will be liable for the financial loss of KIA and whether any damages will be payable to KIA by Repairer Pty Ltd.

Running head: CORPORATION AND BUSINESS LAW
Corporation and Business Law
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of the paper is to apply the provisions of Fair Work Act 2009 (Cth) along
with the provisions of common law to address the factual scenario. The two issues include
whether Kent Institute Australia(KIA) can terminate Professor Berlin’s contract, Whether
Repairer Pty Ltd will be liable for the financial loss of KIA and whether any damages will be
payable to KIA by Repairer Pty Ltd. The paper comes to a conclusion that Kent Institute
Australia (KIA) can terminate Professor Berlin’s contract and Repairer Pty Ltd will be liable
to pay damages for the financial loss of KIA. KIA will be entitled to the amount of damages
that has been provided in the liquidated damages contract clause of the contract.

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Table of Contents
First Problem..............................................................................................................................3
Issue........................................................................................................................................3
Rule........................................................................................................................................3
Application.............................................................................................................................4
Conclusion..............................................................................................................................4
Second Problem.........................................................................................................................4
Issue........................................................................................................................................4
Rule........................................................................................................................................5
Application.............................................................................................................................7
Conclusion..............................................................................................................................8
Reference....................................................................................................................................9

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First Problem
Issue
Whether Kent Institute Australia(KIA) can terminate Professor Berlin’s contract.
Rule
The Fair Work Act 2009 provides for the law relating to the employment contracts and its
termination (Kelly 2015). Section 352 of the Act prohibits an employer from dismissing his
employee for the reason of employee’s temporary absence from work, when the absence is
owing to a prescribed kind of injury or illness (Jackson 2018). The same can be illustrated
with the case of Khiani v Australian Bureau of Statistics.
However, Regulation 3.01(5) provides for exceptions to this rule. The injury or illness
would not be considered to be a prescribed injury or illness in the following circumstances:
 When the employee is absent for a period exceeding three months;
 When the employee was absent for more than three months within a period of
twelve months, irrespective of the number of illnesses or injuries he has suffered.
However, the employee so injured or ill will not be entitled for a paid leave for the
purpose of this section.
The employer who has been absent due to such prescribed illness or injury is under an
obligation to produce a medical certificate or a statutory declaration regarding that illness or
injury within 24 hours or such period, which seems reasonable after the commencement of
the absence. A medical certificate implies a certificate, which bears the signature of a
registered medical practitioner.
In the case of Devonshire v Magellan Powertronics Pty Ltd, the court was of the opinion
that if an employee was terminated during a temporary absence owing to illness, the

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employer must prove that the same was not due to the absence and the same is driven by
some other valid reasons.
Application
In this present situation, the Kent Institute Australia(KIA) has appointed Professor Chris
Berlin by signing a contract for a term of three years on which he was to join on 1 January
2019. This rendered him to be an employee for the Kent Institute Australia. Subsequently,
Professor Berlin was seriously injured owing to an accident. This made Professor Berlin to
remain absent from work on medical advice. This brings the situation under the purview of
temporary absence from work owing to prescribed injury or illness as provided for under
section 352 of the Fair Work Act.
However, Professor Berlin was advised not to join employment before 25 April 2019 by
the medical practitioner. This makes her to be absent from work for the period between 1
January 2019 to 25 April 2019. This would make her absence from work to exceed a period
of three months as was provided under Regulation 3.01(5). This will render the case to be an
exception to section 352, which will provide a ground to the Kent Institute Australia to
terminate Professor Berlin, owing to absence from work due to prescribed injury for more
than three months.
Conclusion
Kent Institute Australia (KIA) can terminate Professor Berlin’s contract.
Second Problem
Issue
Whether Repairer Pty Ltd will beliable for the financial loss of KIA. Whether any
damages will be payable to KIA by Repairer Pty Ltd.

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Rule
The Australian Contract Law is mostly, based on common law principles. The first
requirement that needs to be present in a contract is an agreement between two parties
instituted by an offer by one party followed by an acceptance by the other party. The
agreement must be understood by both the parties to the contract in the same sense (Edwards
2017).
The formation of a contract has the effect of creating a legal relation between the parties to
the contract. The terms of the contract are binding on both the parties to the contract.
However, the rights and obligations that arises under the contract are available to and
imposed on the parties to the contract only. A third person does not possess the rights to
enforce the benefits of the contract. This is known as the doctrine of privity of contract. The
doctrine was recognised in the case of Tweedle v. Atkinson (1861).
The terms of the contract are binding upon the parties to the contract. The parties to a
contract does not have the option of denying to perform the terms of the contract. However,
there are certain instances where the terms of the contract can be avoided. Those instances
are:
 Any misleading representations that might have influenced the consent of the
parties while effecting the contract,
 Any mistake that might have led to the formation of the contract,
 When the contract has been made influenced by duress, whereby one party was
under coercion by the other while entering into the contract,
 When the contract is made as a result of undue influence,
 When the terms of the contract are unfair,
 When the terms of the contract will be illegal and is opposed to public policy.

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Any contract entered into owing to the abovementioned instances would be regarded as
voidable at the option of the aggrieved party.
A contract is legally enforceable under common law. The parties to a valid contract are
under an obligation to carry out their contractual obligations. In case the parties fails to fulfil
the contractual obligations, the same will attract legal consequences. However, there are
certain instances where the contract might be terminated under the common law. Those
instances are:
 When the performance of the contract becomes impossible,
 Where the contract was influenced by fraud, misrepresentation or mistake,
 Where there is a breach of the contract committed by any of the parties,
 Where the contract was supposed to be terminated by virtue of prior agreement,
 When the contract is completed.
However, apart from these if any party has breached the contract the same will be liable to
pay damages. In case the term of a contract has been breached by one party, the other party
has the option of either terminating the contract, enforce performance or claim damages for
the breach. For termination of the contract a breach of an essential term of the contract is
necessary. A breach of a simple term would not amount to termination but can incur a claim
for damages.
A term of a contract becomes essential when it is a condition upon which the contract is
depended. An essential condition implies such a condition that forms the essence of the
contract and without which the contract would not have entered into. The same can be
illustrated with the case of Tramways Advertising Pty Limited v Luna Park (NSW) Pty
Limited.

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The breach of a contract or essential condition only entitles the aggrieved part to damages.
The essential term may be express or implied. However, a breach of a contract does not
render the contract to be terminated automatically. It creates a right in favour of the aggrieved
party aggrieved party to terminate the contract and claim damages. The aggrieved party has a
right to choose whether to terminate the contract, enforce its performance or claim damages.
It was held in the case of (Koompahtoo Local Aboriginal Land Council v Sanpine Pty
Limited [2007] HCA 61, that the violation of the terms of a contract is a breach of the
contract and the same can be terminated at the option of the aggrieved party.
The breach of a contract would create a right in favour of the aggrieved party. The
aggrieved party has a right to claim damages. The damages are regarded as a substitute for
losses arising out of the breach. Liquidated damages are availablein case the contract
provides for a clauseto ensure the payment of a particular sum of money on breach (Douglas
2017).
Application
In this present situation, the Repairer Pty Ltd. was obligated to repair and return the ovens
within Friday to KIA under the contract. Repairer Pty Ltd was under an obligation to abide
by the terms being a party to the contract. However, the Repairer Pty Ltd failed to comply
with the terms of the contract which says that all the three ovens needs to be repaired and
delivered within Friday. They repaired and delivered two of the oven on Thursday and
damages the third one while delivering it. This was a breach of the contract.
Moreover, the clause for liquidated damages was included in the contract. The contract
provided for a clause stating that $100,000 would automatically become payable if the ovens
were not repaired and returned to KIA on time. The Repairer Pty Ltd. not only delayed the
performance of the contract but also damaged one of the ovens, which again they failed to

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repair and return within time. Moreover, such breach has resulted in a loss to the KIA and it
was a breach of an essential condition of the contract. Therefore, such an breach of the
contract lead to a claim for damages available to KIA.
Conclusion
Repairer Pty Ltd will be liable to pay damages for the financial loss of KIA. KIA will be
entitled to the amount of damages that has been provided in the liquidated damages contract
clause of the contract.

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Reference
Devonshire v Magellan Powertronics Pty Ltd [2013] FMCA 207
Douglas, M., 2017. Anti-suit injunctions in Australia. Melb. UL Rev., 41, p.66.
Edwards, A.H., 2017. Leading cases in contract law [Book Review]. Bar News: The Journal
of the NSW Bar Association, (Summer 2017), p.61.
Jackson, D., 2018. Developing Graduate Career Readiness in Australia: Shifting from Extra-
Curricular Internships to Work-Integrated Learning. International Journal of Work-Integrated
Learning, 19(1), pp.23-35.
Kelly, C., 2015. Sham Arrangements, Third Parties and S 357 of the Fair Work Act 2009:
Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] HCA 45.
Khiani v Australian Bureau of Statistics [2011] FCAFC 109
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61
The Fair Work Act 2009
Tramways Advertising Pty Limited v Luna Park (NSW) Pty Limited (1938) 38 SR (NSW)
632
Tweedle v. Atkinson (1861) 1 B & S 393; 121 ER 762; [1861-1873] All ER Rep 36
Young, C.S.R., 2019. Conference keynote: Subject to Contract: Law as an Artistic Medium.
Keynote given at'Art in Law in Art'international conference, University of Western Australia,
Perth.