Case Study Analysis: Martin's Breach of Contract

This assignment requires a detailed analysis of a case study involving Martin's breach of contract with the Swimming Pool Company. The scenario involves Martin collecting deposits from customers directly without informing the company, starting his own business as a competitor, and breaching his employment contract. The assignment demands an examination of the Corporation Act and its implications on corporate liability, employee actions, and contracts. A thorough understanding of the case study, relevant laws, and corporate governance is essential to provide a comprehensive analysis and conclusion.

Law Project

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A: Contract law.....................................................................................................................1
Issues:..........................................................................................................................................1
Rule:.............................................................................................................................................1
Application:.................................................................................................................................2
Conclusion:..................................................................................................................................3
REFERENCES................................................................................................................................4
PART B: Corporation law...............................................................................................................5
Issues:..........................................................................................................................................5
Rule:.............................................................................................................................................5
Application:.................................................................................................................................6
Conclusion:..................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Law is one of the effective system of rules and regulation that are created and enforced by
social and legal bodies in order to regular behaviour. It consists of set of rules decided by a
particular country for the purpose of keeping the regulation and security of the humanity. This
project report is categories into two parts. The first one is associated with contract law and the
other part of the report is related with corporation law.
PART A: Contract law
Issues:
According to the mentioned case study of “LuSeKo mowing services”, it has been found
that all the three member are working in a partnership. Because a contract which is properly
documented can be more readily enforced. There is no any need for necessary format of
contractual documents, excepts for formalities which is imposed by statute. The best part of their
business is that within a short span of time, LuSeKo has wide number of clients. Seamus used to
cut the grass, Lucy removes the clippings in her trucks and koo used to keep the accounts
regularly. One day without informing to Lucy and Koo, Seamus has decided to purchase Fastcut
mowers with the name of LuSeKo. After sometime, Lucy used to develop an individual business
relationship with most of the customers of LuSeKo through rubbish from its possessions on
holidays. While, both Seamus and koo are busy in their studies. One day, when Fastcut’s bill
arrives, Koo get upset because there is not enough amount in the LuSeKo bank account for the
purpose of making payment of bills for the ride-on-mower. Thus, while taking ride on mower,
Seamus hits on to a Stump and flung under the rotating blades. Because of this accident Seamus
died (McKendrick, 2014).
Rule:
As per the section 29(1) of the partnerships Act 1891(SA) every partner must be
accountable to the firm for any advantage which is been derived through the partner without the
consent of other partners from any other transaction made in respect to company. It is the basic
responsibility of the partners to make complete disclosure of all that can affect the firms. This
role can epitomise the fiduciary nature of behaviour among other partners. In case, a partner,
without the consent of the other person, carries on any business of the same nature that competes
with the firm. That particular partner must be liable for and pay over to the firm all the gains that
1

are made by the partner from the purchase of that goods. As seen in the case study that Seamus
without informing to the other two partner purchase a new Fast mower which in accordance to
the name of the company LuSeKo. liability can be consisting of any debts and other kind of
obligation of any kind which are incurred by the partner on behalf of the other. The rule is that
provide the partner commerce with a usual way. The major factor in the partnership contract is
that Lucy has breach the duties as carrying out her vacation work. According to the partnership
act Lucy cannot operate their business without making prior notice to their other partners as they
are also acting partners in LuSeKo. legal compliance is associated with the partnership
agreement in order to deal with all kind of unethical activities which are performed within an
organisation (Ayres, I. and Schwartz, 2014).
Application:
As per the partnership dead, if the provision of legislation is not fulfilled, the subsequent
contract become unenforceable not void. law of agency is the said to be legal relationship that
arises when an individual, the principal as well as the liable party. Under this particular law,
essentially the acts of agents are those associated with the Lucy. As, it has been seen in the case
situation of LuSeKo company they are operating as units but because of Seamus who has made
the decision to buy a new mower without taking permission of other two partner. The clear case
of breach of contract is seen. According the act 1891, each person is equally liable for all kind of
acts or decision that is made within the company. In case, Fastcut wishes to commence any legal
action against LuSeKo to recover the purchase prices of the ride-on mower. He would be asked
for to the remain partner to make all the payment which are behalf of the Seamus. Because
according the partnership deed all the partner is having right to make compensation of all the
issues in equal ratios.
Case Examples: Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd
[1971] 2 QB 711
Under this case, the company secretary hired a new car for his own private use and told to
third party this was done on behalf of the company. He had no any actual authority to do so, but
had certain deceptive obligation by the nature of their situation. Because of this, he occupied a
significant administrative position in the company and there were certain reasons to assume to
have certain power in their hands.
2

Held: One of the higher authority Queen’s Bench held liable the company secretary is an
important officer of the company which is having extensive duties and roles in accordance to
their day to day matters. he has all the right to make any kind of specific decision on behalf of
other members (Fitzpatrick and et. al., 2017).
Conclusion:
According to the above case scenario of LuSeKo, it has been concluded that there is a
clear breach of contract by Seamus. He does not follow all the instruction which are mentioned
under the section of partnership act. Because of Seamus death, both remaining partners need to
make payment of Fastcut bill as because they are acting partner in the company. according to the
act, property comprises of all property and rights and interest in assets originally brought into the
partnerships. Such property must be held and implied by Lucy and Koo exclusively for the
purpose of partnerships. In order to meet out the LuSeKo losses, both Lucy and Koo need to pay
all the cost which is asked by the Fastcut company.
3

REFERENCES
Books and Journals:
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Ayres, I. and Schwartz, A., 2014. The no-reading problem in consumer contract law. Stan. L.
Rev. 66. p.545.
Fitzpatrick J, Symes C, Veljanovski A & Parker D, Business and Corporations Law 3rd ed.
(2017), LexisNexis Butterworths Australia.
4

PART B: Corporation law
Issues:
As per the case scenario, it has been found that one of the swimming pool company
employs Martin as manager of their Tasmanian sale division. The best part of martin is that he is
very much capable for handling customer and installing various pools that a company offer in
front of them. The company hired him on monthly fixed salary but his contract of employment
says that he is liable for bonus in respect to his extra activities of work. After sometime,
company is very happy with martin in the initial month of his employment because martin has
signed around 20 new customers and started to work on at least half of the new projects. Since
few days back the company receives a wide number of complaints from customers about the
construction of their swimming pool which is considerable different from what they had
contracted for them. Few of them are giving wrong advice as on suitable placement of their
swimming pool which means that newly constructed pools are sinking into the ground because of
which replacement cost is also high. Thereafter, the another issues were seen regarding the
deposits which are not been paid into their companies bank account. All the issues are needed to
be taken into account more closely and make appropriate decision to overcomes in more quick
time so that chances of losses can be controlled (Allen, 2017).
Rule:
According to the corporation act, 2001, it has been seen that law of contract is having two
assumptions when dealing with contracts which are disproven. Social and domestic agreement
are not liable or legally binding in a court of law. Another one is associated with the commercial
and business agreement that are presumed to be associated with legally and enforceable in the
law. Under federal law, Swimming pool co Pvt ltd is liable for martin action as he is the
employees of the company. thus any of illegal action done by him can be paid by the company.
as per the liability in contract, every employee in a firm is liable jointly with the company for all
the debts and obligation of the firm incurred during the period of time. because, federal law says
that if the employee’s actions are of the kind of employees is liable to perform on the corporation
behalf and done at least in part to made profitable the corporation (Means, 2016).
No the corporation is not being liable for the any kind of claim for the action done by the
employees. Because, it is clearly instructed to the all the employees and other staffs to follow all
5

the instruction properly before making any plan of action. In case of martin, company cannot be
able to receive any kind of claim amount because martin is the employee of the corporation.
Under the doctrine of tort law which is associated with the liability of employers. As per
this law martin in liable for his employer for any of his actions that are made on behalf of the
corporation. Because, he has breach the contract in order to start the business without making
proper instruction of the company. according to the mentioned case, it has been clearly
mentioned that martin has collected deposit from the customer directly without informing to the
Swimming pool company.
Application:
From the mentioned case study, it has been clearly stated that martin has breach the
contract law which is made with the swimmingpool company. The martin case was needed to be
examine more closely by the help of using essential examples which will be assist in to
determine the actual situation or results come out from the case of swimming pool company. It is
the overall liability of the corporation to provide proper instruction to their employees about their
policies and rules. But without knowing the consequences, martin has started to take orders on
behalf of the company.
Case Example: Errington V Errington & woods [1952]1KB 290
Under this case, Errington has bought a house and paid the deposit and take out a
mortgage. He permitted to his son and daughter-in-law to remain in the house on the promise in
case they paid the mortgage the house would below to them. After sometimes Errington died and
willed the house to his wife. The mother sued for possession of the house from the daughter-in-
law (Fitzpatrick and et. al., 2017).
Held: The kings bench hade decided that there was a one-sided contract because the
promise to transmission the house was in accordance for the imbursement of the mortgage. The
daughter- in-law is not being liable for this act, and she continued to do this and could remain in
the house after that period of time.
The corporation act needed to be assured contracts that will be contained in a formal
deed, other must be reduced to writing and other need to be at least presented in evidence form.
Conclusion:
From this particular case situation, it has been concluded that swimming pool company is
not entirely liable for all the incident that is done from the martin side. As he was the employ of
6

this company so any all the consequence will have required to be pay by the company as per the
corporation act. The company has also discovered that martin is in the process of establishing
their own business as a competitor of swimmingpool co which is legal not acceptable. The
company can claim for the breach of contract and essential compensation would be charged from
the market. However, all the deposits which are collected from the customer by the martin is now
have to be paid by the swimmingpool company because of martin is one of the employee within
the company as corporation act.
7

REFERENCES
Books and Journals:
Allen, W.T., 2017. Our schizophrenic conception of the business corporation. In Corporate
Governance (pp. 79-99). Gower.
Means, R.C., 2016. Underdevelopment and the development of law: corporations and
corporation law in nineteenth-century Colombia. UNC Press Books.
Fitzpatrick J, Symes C, Veljanovski A & Parker D, Business and Corporations Law 3rd ed.
(2017), LexisNexis Butterworths Australia.
8