Corporations and Business Law

This document discusses the laws governing corporations and business in Australia. It covers topics such as contracts, partnerships, and dissolution of firms. The document provides case law examples to illustrate the application of these laws. It also discusses the duties of partners in a partnership and the powers of partners to bind the firm. The document concludes with a discussion on partnership property and its appropriation to meet losses sustained by the firm.

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

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Part A
Issue
Whether the forty customers producing the advertisement before the notice goes up in the
window be able to enforce any legal agreement.
Whether the customers, who do not have the advertisement with them can participate in
the promotion and enforce any agreement.
Whether Ming Could argue that $10 is insufficient for the promise of what would
normally be a $60 haircut and no legal obligation would be incurred by the business pursuant
to that.
Whether Ming has any legal obligation to provide cut-price haircut after the withdrawal of
the promotion.
Rule
Contract implies an agreement involving two or more persons, which is legally
enforceable. The parties entering into a contract must have the intentions of creating legal
obligations. A valid contract is required to possess the elements of offer, acceptance and
consideration. In order to analyse the validity of a contract, the competency of the parties,
their age, their state of mind, whether their consent has been availed under the influence of
insanity or intoxication needs to be considered. The parties to the contract needs to
understand the terms of the contract and must agree for the contract in the same sense.
Public Advertisements are not considered to be an offer under the contract law. It implies
an invitation to treat. The same can be illustrated with the case of Partridge v Crittenden
(1968). However, in case of advertisement providing for a reward on fulfilment of a specific
term, the person fulfilling term based on the advertisement will incur a right to claim the

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reward. However, if the term to be fulfilled is vague the claim will not be available. This can
be illustrated with the case of Gunthing v Lynn (1831).
In the case of Carlill v Carbolic Smoke Ball Company (1893), the company put an
advertisement announcing a reward to any person who will contract influenza even after
using their smoke balls. It was contended by the court in this case that the offer was made to
world at large contrary to which the company argued that the other party failed to
communicate its acceptance to the company and claims contract to be not valid. The court
held that in case of advertisement made to public at large involving reward on performance of
a specific condition, the person fulfilling the condition would be eligible to avail the reward.
In such cases, the express acceptance of the other party is not required to form the contract,
mere fulfilment of the conditions specified in the contract is required for the contract to be
valid and binding on both the parties.
This is regarded as unilateral contract. In such kinds of contracts, the offeror makes a
promise to pay a reward if the offeree fulfils certain condition. The communication of
acceptance is not required for this kind of contracts to be formed, the mere commission of the
condition will form the contract to be binding upon the parties.
However, it was held in the case of R v Clarke (1927) that a person not aware of the offer
cannot claim the benefits of the same.
In the case of Chappell v Nestle [1960] AC 87, it was held that consideration need not be
adequate, the mere presence of a consideration will be enough.
Application
In the present situation, Ming advertised for a special offer in the local newspaper pursuant
to which fifty people availed the special offer. This brings the situation under the purview of
advertisements made to the world at large. The providing for haircuts at $10 is a

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consideration to be paid for the fulfilment of the condition of coming down to the salon and
availing haircut services. The person appearing at the shop for availing haircut pursuant to the
advertisement binds both the shop owner and themselves with the terms of the contract under
which the shop owner is obligated to provide haircut at $10. However, the shop owner
realising the loss sustained by him in providing haircuts at a lower price decided to take down
the advertisement.
Again, there are forty customers who came down to the shop before the removal of the
advertisement pursuant to the same to avail the special offer. As the forty customers have
showed their willingness to avail the benefits of the offer, the communication of acceptance
of the offer needs to be construed by the same. Therefore there is a formation of a contract
between the shop owner and the customers wishing to avail the offer in pursuant to the
advertisement. Therefore, it can be stated applying the decision of Carlill v Carbolic Smoke
Ball Company (1893), the those forty persons are entitled to enforce the agreement.
However, another ten customers have showed their willingness to participate in the
promotion but they failed to obtain the advertisement with them. This will not create a valid
contract between those ten customers not carrying the advertisement with them and the shop
owner. They will not be able to enforce the contract. This can be illustrated with the case of R
v Clarke (1927), as the person not aware of the advertisement cannot avail the benefits of the
same.
The argument presented by Ming regarding the sufficiency of the consideration can be
addressed with the case of Chappell v Nestle [1960] AC 87, which states that the
consideration does not need to be adequate. The mere presence of the same will be
considered enough for the contract to be binding.

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Under the light of the above discussion it can be stated that although Ming has withdrawn
the advertisement, still the person coming to the shop in pursuant to the advertisement will
have right to avail the contract.
Conclusion
The forty customers producing the advertisement before the notice goes up in the window
will be able to enforce any legal agreement.
The customers, who do not have the advertisement with them cannot participate in the
promotion or enforce any agreement.
Ming could not argue that $10 is insufficient for the promise of what would normally be a
$60 haircut and no legal obligation would be incurred by the business pursuant to that.
Ming has any legal obligation to provide cut-price haircut after the withdrawal of the
promotion.
Part B
Issue
Whether Lucy, Seamus and Koo are carrying on a partnership.
Would Lucy and Koo be liable to contribute to the purchase of the ride-on mower.
Whether Lucy is in breach of any partnership duties as a result of carrying out her
weekend work.
Whether FastCut can discover the individuals behind the business name LuSeKo for the
purpose of legal action.
Whether the death of Seamus will affect the partnership in any way.

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Whether Lucy and Koo can determine the partnership property. Whether the partnership
property can be appropriated to meet the losses sustained by LuSeKo.
Rule
The Partnership Act 1963 governs the laws relating to partnership in Australia. According
to section 6 of the Act, partnership implies a relationship existing between people carrying on
a common business with an objective to earn profit. It includes a limited partnership, which is
incorporated (Wang v Rong [2015] NSWSC 1419).
Section 9 of the Act lists the powers of the partners to bind the firm. A partner in a firm is
considered to be an agent of the firm as well as other partners with respect to the business of
the firm. The partner carrying on business on behalf of the firm binds both the firm and the
partners by the transactions entered into by him on behalf of the same. However, if the
partner acting in such way does not have the authority to do the same or the person with
whom the partner is entering into a transaction is aware of the partners lack of authority to
enter into the same, then the transaction would not be binding on the partner (McLaughlin,
2018).
Section 33 of the Act requires a partner of a firm to furnish true and proper accounts and
information affecting the firm to the other partners. Section 34 requires a partner to furnish
account to the firm in case of any private benefit incurred by him without the consent of the
other partners or by using the firm property, firm name or firm business.
Section 35 prohibits a partner from carrying out a business competing with the firm. A
partner carrying out a business similar to the business of the firm will need to account for the
same and transfer the profit from the same in the firm’s name.
Section 38 has the effect of the dissolution of the firm in case of death of a partner.
However, the same can be changed subject to any prior agreement to the contrary. Under

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common law partnership property includes any property owned by the partners as a joint
property to be used and owned under the name of the firm.
Application
In the present situation, Lucy, Seamus and Koo registered a business under the name
LuSeKo to carry on a common business. They registered the business and made other people
aware of the same by advertising through flyers in the neighbourhood. They made regular
clients. However, in carrying on the business Lucy participated in cutting the grass, Lucy in
removing clipping using her truck and Koo kept accounts of the business. Therefore, it can be
stated that they are in a partnership under the Partnership Act 1963.
Seamus had entered into a contract with FastCut to buy a ride-on mower for using it for
the purpose of the business. This makes the contract for the purchase of the same to be
entered into on behalf of the company. Therefore, it may be stated that the firm and all the
partners in it are bound by the same.
Lucy carried on a separate business with the regular clients of the company. The business
was of similar nature as that of the firm. Moreover, the profits of the business was transferred
to a personal account and not to the firm’s account. This makes Lucy to be violative of her
duties towards the partnership firm, which is imposed upon the partner by virtue of the
Partnership Act.
FastCut can contact the ASIC to discover the individuals that are involved behind the
business name LuSeKo for the purpose of legal action. As in Australia, all the businesses are
governed by the ASIC.
The death of a partner generally has the effect of the dissolution of the firm in the event of
absence of any contract to the contrary. In this case also, the death of Seamus will have the
effect of the dissolution of the firm as there is no contract to the contrary.

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The partnership property will include all the properties that have been acquired by the firm
and has been used for the purpose of carrying out the business of the firm.
Conclusion
Lucy, Seamus and Koo are carrying on a partnership.
Lucy and Koo will be liable to contribute to the purchase of the ride-on mower.
Lucy is in breach of the partnership duties as a result of carrying out her weekend work.
FastCut can contact the ASIC to discover the individuals that are involved behind the
business name LuSeKo for the purpose of legal action.
The death of Seamus will have the effect of the dissolution of the partnership.
Lucy and Koo can determine the partnership property by identifying the properties that has
been used and owned for the purpose of the firm. The partnership property can be
appropriated to meet the losses sustained by LuSeKo.

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References
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Chappell v Nestle [1960] AC 87
Gunthing v Lynn (1831) 2 B7 Ad 232
McLaughlin, S. (2018). Unlocking company law. Routledge.
Partridge v Crittenden [1968] 1 WLR 1204
R v Clarke [1927] HCA 47
The Partnership Act 1963
Wang v Rong [2015] NSWSC 1419