Corporation and Commercial law Assignment
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Added on 2021-06-17
Corporation and Commercial law Assignment
Added on 2021-06-17
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Running Head: CORPORATION AND COMMERCIAL LAWCORPORATION AND COMMERCIAL LAWName of the Student:Name of the University:Author Note
1CORPORATION AND COMMERCIAL LAWAnswer One:Issue:In the given circumstances the issue that exists is whether Mike can limit and restrict his liabilityby relying on the exclusion clause printed on the invoice.Law:In this given scenario the principle of exclusion clause is relevant. Exclusion clause can bedefined as a term in the contract which aims to limit or restrict the liability of either of the partiesto the contract. However an exclusion clause will be ineffective if reasonable notice of such termis not given by the party who wishes to rely on such clause as held in the case Olley vMarlborough Court [1949] 1 K.B. 5321. In this case the claimant had booked a room in thehotel. The contract had been formed between the claimant and the hotel authority however thecontract had no mention of any clause which could limit the liability of the hotel. However on thedoor of the hotel room there was notice which aimed to exclude the liability of the hotelauthorities for any loss of property of the guest from the hotel room. The claimant’s fur coat hadbeen stolen from the room. It was held by the court that reasonable notice of the exclusion hadnot been given to the claimant and that the term was not present in the original contract and theclause hab no validity. However in the case L'Estrange v Graucob [1934] 2 KB 394 it hadbeen held by the court that in circumstances where written contract had been by the parties theexclusion clause would be binding upon the parties even if the party who signed the contractualdocument had not read the clause in the document2. In this notable case the claimant hadpurchased a cigarette vending machine by signing an invoice which contained the clause thatany express, implied condition, statement or warranty was excluded. The vending machine didnot work and wanted to reject it under the Sale of Goods Act. It was held by the court that theclaimant was bound by the terms of the contract. Application By analyzing the facts of this case, it can be stated that John had given his car for repairing atMike’s Auto. He had been a customer at Mike’s Auto for a long time. A sign had been put up onthe wall of Mike’s Auto that all the vehicles would be subject to the terms of the invoice. Everytime he came back to pick up his car from Mike’s Auto he used to sign an invoice which1 Olley v Marlborough Court [1949] 1 K.B. 5322L'Estrange v Graucob [1934] 2 KB 394
2CORPORATION AND COMMERCIAL LAWcontained the exclusion clause that Mike’s Auto cannot be held liable for the damage sustainedby any of customer’s cars which is caused by Fire or theft. He did the same on the occasion asmentioned in the case study. Thus by the application of the decision of the L'Estrange vGraucob on the facts of the case study it can be stated that the exclusion clause would beeffective in limiting the liability of Mike’s Auto as it had been present in the invoice which wassigned by John even though he had not the terms. Conclusion:Thus to conclude, it can be stated that Mike would be protected by the exclusion printed on theinvoice which had been signed by John.Answer Two: Issue: In this given scenario the issue that is said to exist is whether the directors of the company hadbreached their duties when they incorrectly declared the financial statements of the company byrelying on the expert advice of the auditors and whether they can take any defense undersection 180(2) of the Corporations ActLaw:The law related to governance of corporations and companies are governed by theCorporations Act 2001(Cth). It has been provided in section 180 of the Corporations Act thatany director or officer of an organization has the responsibility to discharge their duties with duecare and diligence3. The actions of a director are analyzed from the perspective of a reasonableperson acting as the director, in the similar circumstances as the director and having the similarpowers. If it is established that a reasonable person acting in the given circumstances of adirector, occupying the same powers of the directors and having the same responsibilities of thedirectors would have acted in a more diligent and careful manner, it would be considered thatthe directors breached their duty under section 180(1). However as provided in subsection180(2) of the Corporations Act, it can be stated that a director making a business decision wouldbe held to be meeting the requirements of subsection 180(1) if:such director makes the judgment for the business in good faith3 Corporations Act 2001(Cth) s180
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