Company and Commercial Law: Resolving a Case Study on Contractual and Tort Law

COMPANY AND COMMERCIAL LAW 1
LST5CCL
Company and Commercial Law Semester 2, 2018
Memo for Mid-semester Assessment
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Word count: 1200

COMPANY AND COMMERCIAL LAW 2
Table of Contents
INTRODUCTION......................................................................................................................3
ASSISTANCE/ FINANCIAL COMPENSATION OFFERED TO JAMES IF LLOYD IS
TAKING RESPONSIBILITIES UNDER CONTRACT INTO ACCOUNT............................3
ASSISTANCE/ FINANCIAL COMPENSATION LLOYD WOULD OFFER JAMES IF
TAKING RESPONSIBILITIES UNDER THE TORT OF NEGLIGENT
MISREPRESENTATION INTO ACCOUNT...........................................................................4
Example..................................................................................................................................5
POSSIBLE OTHER LEGAL RISKS THAT LLOYD MIGHT FACE.....................................5
Suggestion for reducing financial risk...................................................................................6
Suggestion for reducing reputation risk.................................................................................6
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

COMPANY AND COMMERCIAL LAW 3
INTRODUCTION
The report is related to the resolving of the case under the study. The case is related to
the contract between James and Llyod regarding to make a provision of architectural
designing of the restaurant established by James and taking permission from Council
regarding the outside seating arrangement. The report covers the various legal compliances
and recommendation that must be taken into consideration upon non-fulfilment of
responsibilities as mentioned in the contract.
ASSISTANCE/ FINANCIAL COMPENSATION OFFERED TO JAMES
IF LLOYD IS TAKING RESPONSIBILITIES UNDER CONTRACT
INTO ACCOUNT
A contract was established between James and Lloyd Right Pty Ltd regarding by
which Lloyd was responsible for the interior and exterior design of the restaurant, ensuring
the seating capacity and obtaining permits from the local council. For this James had paid
$1500 for the services which Lloyd will be rendering to acquire permission from the Council.
When the restaurant became operational, it was found that the seating capacity is only 80
instead of 120 as proposed. Due to which James was suffering a business loss of 40
customers per day. Additionally, the Council had denied permission to James to make seating
arrangements outside. In this case, the Australian Contract Act 20101 will be applicable
because the contract was established between both the parties in a written format. The
contract did not mention about a number of seating arrangements but taking permission from
the Council was mentioned. Australian Contract Act 2010 and Fair Trading Act 1987 (SA) of
Section 1562 will be applicable for not fulfilling the committed responsibilities by the parties.
Lloyd had breached the contract and was responsible to pay James for the loss incurred by
him due to less number of seating capacity. Due to reduced number of customers, James has
been suffered 40 customers per day and he also found the estimated loss per customer is 30
dollar in a day. Hence, Lloyd will be responsible to pay $1200 to James for the loss of
customers that he is suffering each day. Secondly, Lloyd had accepted payment on behalf of
the provision of services related to taking permission from the Council. However, Lloyd was
not able to do so and James was not allowed to serve customers outside the restaurant area.
1 Australian Competition and Consumer Commission v Keshow [2005] FCA 558
2 Australian Competition and Consumer Commission v UNJ Millenium Pty Ltd [2012] FCA 1123.