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LST5CCL - Company and Commercial Law

   

Added on  2020-05-04

10 Pages3204 Words81 Views
Running head: COMPANY AND COMMERCIAL LAW0Company andCommercial Law

COMPANY AND COMMERCIAL LAW1Answer 1aMary, Fred, and Chris started a real estate business in Melbourne by writing anagreement on a serviette. The term of the contract stated that equal amount is put byeach party and future profits will be divided equally between them. The business isproviding bespoke service to peoples entering in real estate market, and all threepartners were managing the operations. IssueThe key issue is related to the type of business structure Mary, Fred and Chrisare in and understanding the legality of their contract since it is written on a serviette. RuleTo establish a legally enforceable contract, few elements are required to befulfilled by the parties of such contract. A legal contract needs an offer, acceptance, andconsideration or a bargained for exchange. In other words, acceptance of agreementterms by parties and having a consideration in the transaction validates a contract whichcan be enforceable by law. There are four main types of business structures used bybusinesses in Australia: Sole trader, company, partnership, and trust. In Sole trader business structure, the processes of business are operated by anindividual who is responsible towards all aspects of the business. A company has aseparate legal entity from its owners, and it is more suitable when the operation isexpanding or growing. The Corporations Act provides regulations regarding theestablishment of a company. In Partnership business structure, a number of peoplejointly decided to run a business together. The partnership is divided into two parts-general and limited; the Partnership Act provides provision regarding partnershipstructure. In Trust business structure an obligation is imposed on a party to hold an assetfor the benefit of another party. ApplicationIn case of Mary, Fred, and Chris, they have entered into a partnership businessstructure. The agreement performed by them on a serviette is legally enforceablebecause it comprises essential elements of a contract which are offer, acceptance, and

COMPANY AND COMMERCIAL LAW2consideration. The intention of parties is also similar, that is to start a business ofproviding bespoke service for real estate. The Lucy v Zehmer case is a good example; in this case, the court enforces acontract which was written on the back of a receipt for selling of property to anotherparty. Zehmer provided that his intention was not available and the contract was writtenin jest, but the court decided that the circumstance surrounding were justified theseriousness of the contract hence it can be legally enforceable by law. ConclusionAs per the provisions of Partnership Act, Mary, Fred, and Chris are in anunlimited partnership business structure. The contract performed on serviette is legallybinding upon the partners because the fundamental principles of the contract areavailable, such as offer, acceptance, consideration, and intention.Answer 1bFred is a tax consultant who provides advice regarding tax implication in aproperty. While giving information to ‘X’, Fred made an unintentional mistake whichcauses ‘X’ monetary losses of $15,000 in tax. Without the advice of Fred, ‘X’ wouldnot have purchased the property. IssueThe main issues are regarding the liability of Fred or other business partnerstowards the loss suffered by customer X. RuleAs per Tort Law in Australia, the negligence is a failure of maintaining propercare when a person has a duty of care towards other peoples, which causes low to suchparty. In case of misrepresentation, a party misrepresents particular facts to luresomeone into entering a legal contract, due to which they suffered monetary loss. Anegligent misrepresentation is an advice or fact which is given by a party honestly but ismisleading or false, due to which another party suffers financial injuries. In negligentmisrepresentation cases, the claimant has to prove three things, availability duty of care,defendant’s liability of care and pecuniary loss.

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