HI6027 Business and Corporate Law: Case Studies of Business Law

This assignment solution addresses two case studies in Business and Corporate Law, analyzing contract law principles in the context of an advertisement-based offer, acceptance, and revocation scenario involving SOO Burgers and customers Mickey and Brett. It examines the formation of a binding contract and the implications of communication of offer and acceptance. The second part delves into corporate law, assessing the duties and liabilities of directors, including breaches of the Corporations Act, specifically sections 180, 181, and 588G, focusing on the concepts of due care, diligence, good faith, and preventing insolvent trading. The solution references key legal cases such as Carlill v Carbolic Smoke Ball Company, ASIC v Flugge, and Greenhalgh v Arderne Cinemas Ltd, providing a comprehensive analysis of the legal principles and their application to the given facts.

Business and Corporate Law
Name of Student
Name of University
Author Note

Part A (1)
• Carlill v Carbolic Smoke Ball Company
[1893]
• advertisement containing terms for reward
is considered as binding offer for anyone to
accepting
• In case advertisement of SOO burger
would be binding offer

Part A (1)
• Partridge v Crittenden (1968)
• advertisements being published in newspapers
or hoardings considered as invitation to offer
instead of actual offer
• treating advertisement for an invitation to treat
SOO is not bound by advertisement

Part A (1)
• Spencer's Pictures Ltd v Cosens
[1918]
• a contract would not form unless
offer is accepted verbally or in
written terms.
• the offer only valid when Mickey and
Brett came to SOO Burger Head
Office and showed golden tickets.

Part A (1)
• Payne v Cave (1789)
• An offer can be
withdrawn by the offeror
by revocation before the
offer had been accepted
• the offer was revoked by
SOO Burgers however it
was not done before Brett
accepted their offer
• the information was
broadcasted before
Mickey claimed the prize
• Byrne v Van Tienhoven & Co
[1880]
• revocation of offer is required
being communicated by the
offerer to the offeree in any direct
or indirect way before the
acceptance has taken place
• the information of the revocation
was not informed to Brett
• Mickey had heard about the
revocation in passing from a third
party hence it was not a direct or
indirect communication by the
offeror

Part A (1)
• SOO Burgers are bound under contract law with Brett
• SOO Burgers are bound under the contract law with Mickey

Part B (2)
• ASIC v Flugge (No2)
[2017]
• a director should be acting
with a certain degree of
diligence and care, that is
expectable from any
reasonable person
• Mercedes can be seen as to
be breaching section 180 of
the Act for not acting in
due care and diligence
• Gregg is liable for not
acting in due care and
diligence
• Australian Securities and Investments
Commission v Rich (2009)
• a director of a company would be
meeting the requirements of s 180 (1) if
they make a business judgment in good
faith for a proper purpose; do not have
any material interest; inform themselves
about the subject of the judgment up to
extent which is believed as being
reasonably appropriate; believes in a
rational way the best interest of the
company would be made by the
judgment
• Mercedes’ her decision can be seen as
being protected as she has made the
business judgment in good faith for a
proper purpose without any personal
interest.

Part B (2)
• Greenhalgh v Arderne Cinemas Ltd
[1951]
• Under section 181 of the Act it is the
fiduciary duty of a director for acting in
good faith and for the best interest of
company
• Gregg is liable as he did not care for the
financial matters and did not act in the
best interest of the company

Part B (2)
• Tourprint v Bott [1999]
• the duty of a director is to be preventing
trading during insolvency of company
• As a director Mercedes was liable for
stopping the company from insolvent
trading but she did not hence she is liable
under section 588G of Corporation Act
• If Joytronics becomes insolvent Gregg
would be held liable under section 588G
for not taking any necessary steps

Part B (2)
• Mercedes is in breach of section 180
and 588G and has the defense of
business judgment rule under section
180(2)
• Gregg is in breach of section 180, 181
and 588G

Reference
• ASIC v Flugge (No2) [2017]
• Australian Securities and Investments Commission v Rich (2009)
• Byrne v Van Tienhoven & Co [1880]
• Carlill v Carbolic Smoke Ball Company [1893]
• Corporations Act 2001 (Cth)
• Greenhalgh v Arderne Cinemas Ltd [1951]
• MG Corrosion Consultants Pty Ltd v Gilmour (2014)
• Parke v Daily News Ltd [1962]
• Partridge v Crittenden (1968)
• Payne v Cave (1789)
• Spencer's Pictures Ltd v Cosens [1918]
• Tourprint v Bott [1999]

THANK YOU