Business and Corporate Law Assignment: Contract Law and Business Cases

This document presents a comprehensive solution to a business and corporate law assignment, addressing several key legal issues through detailed case study analysis. The assignment delves into contract law, examining scenarios involving breach of contract, the validity of agreements, and the implications of signed contracts. It also explores the concept of negligence, analyzing cases where professional conduct leads to financial or personal damages, and the remedies available. Furthermore, the assignment touches upon agency law, focusing on the responsibilities and limitations of agents. The analysis includes discussions on the business judgment rule and its relevance in corporate decision-making, assessing the liability of directors and managers in various business contexts. The document provides a well-structured and insightful examination of these legal principles, making it a valuable resource for students studying business and corporate law.

Running head: Business and Corporate Law
Business and Corporate Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Question No 1............................................................................................................................2
Part- A....................................................................................................................................2
Part B......................................................................................................................................3
Question No 2............................................................................................................................3
Question No 3............................................................................................................................5
Part A.....................................................................................................................................5
Part-B.....................................................................................................................................6
Question No 4............................................................................................................................6
References..................................................................................................................................8

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Question No 1
Part- A
Issue
The issue in the case is Jeff and Tina both entered into an agreement to sale Peach Brand
(Poole 2016). But at last moment Tina took back its intension to buy the business, so if she is
bound to buy the business as she had signed the Heads of Agreement.
Rules
As per the “Australian Contract law” A contract is valid if it has a proper agreement, and it
is signed by both the parties than it is turn into a contract (Andrews 2015). So if both parties
signed the agreement that are implied to complete the contract and if any of one party
changes its intension than it will be consider as Breach of contract. As per the case law of
(Walford v Miles, UK, AC, 1992) it was founded that they did agree with the agreement but
afterwards they denied the acceptances.
Applying Rules to the facts
The above rules is applied here as Jeff wanted to sale its business and Tina showed her
intension upon the purchase of the business (Klee 2015). So the intension upon the offer was
accepted and both have made the legal agreement and signed the agreement so they are
bound to perform as it satisfy all the criteria required for a valid contract.
Conclusion
On the facts provided in the above, Tina should perform the contract and should purchase the
business of Jeff and if she does not did these than Jeff can sue her in respect of breach of
contract. So to avoid the court proceedings she should accept the offer.

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Part B
Conclusion
As if the head of agreement had a term stating than it means it an offer which is made by the
seller to the buyer so it just an offer letter to the buyer. So if Tina signed the agreement, it
means she had accept the offer and enter into the contract with Jeff. It is a valid contract and
thus Tina had to perform the activity which is the purchase of Jeff business Peach Brandy.
Question No 2
Issue
The Issue in the case of Phil and Robert is that Phil is the managing director of the company
named LightsBright Pty Ltd had sold an order of $75000 of electrical fitting to the Robert
who is the managing director of CheepCheep Pty Ltd (Smits 2017). Phil knew the company is
not having a good finance position yet he sold goods to CheapCheap as Robert is a friend. So
the company went to liquidation so who will pay the amount to LightsBright Pty Ltd.
Rules
As per “Business Judgment Rule” It is assumed that the boards is acting with all its decision
in standard and norms which are made by the industry. As the board members should act in
good faith while dealing with company money (Cartwright 2016). This rules help the board
to take their decision freely and protect them from any wrong judgements.
Applying rules to the facts
The above mentioned rule is applied here as Phil knew the company is not having proper
finance stability than also it has sold product to the company (McKendrick and Liu 2015).

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The Court will check that the decision which is taken by the Phil is right or not as the
company sold taking that the CheepCheep Company will pay the debt but they went to
liquidation and all the money of the company is termed as loss. So the court will listen to Phil
and take its decision about who will pay the required money to the company. Robert is not
found any mistake as Phil sold goods to him so Robert is not having any legal issue related to
the money.
Conclusion
A- On the fact which are provided above it can clearly see that Phil try to help its friend
by giving him goods worth of $75000 as it knew that the position of the company is
not good than also it sold its product so it’s a clear case that it was not acting in good
faith with the company and was satisfying its personal need so as the CheapCheap
company has went to liquidation so Phil will be personally liable for the money as
because of its wrong decision the company had to suffer the loss.
B- On the fact which are laid in above para that Robert will not personally liable for cost
of the product as it was in good faith with the company and Phil is the one who does
not follow norms while making the decision so, Robert will not be personally liable
for any amount to LightsBright Pty Ltd.
C- Yes, Business Judgement Rule will be relevant to Phil as it will be consider that Phil
acted in good faith while making the decision of sale with the company and as daily
operation in the business need to be a little risky and managers have to take those to
make their business expand so the court will check whether Phil can be saved in
regard of Business Judgement Rule as it is not necessary for managers to take easy
decision easily and perfectly without taking any risk of money in the business.

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Question No 3
Part A
Issue
The issue in the case of Francis and Allan is that, Francis like to collect music related
merchandise and to do so she hire an agent named Rick and instructed it to purchase three
specific items related to Kiss from Allan and gave a budget of $25000 and instructed it to
make it a secret purchase but Rick told all 3 friends of her and also made a promise of
$33000 to Allan in return of three items (Stone and Devenney 2017). So now the case is
who will pay the agreed amount as Francis asked in $25000.
Rules
As per “Promise made by Agent”, if any promise which is made by agent on behalf of its
owner is valid if it made as per the terms and norms made by the owner but if the agent made
some new limits as per their choice without taking any confirmation from the owner than it
will not be valid promise and hence no contract is been enforced (Cooter and Ulen 2016). As
per the case law of “Alcatel Australia Limited v Scarcella16 July 1998” it was founded that
the agent did not acted in good faith and did the duties out of boundaries and as a result of it,
the agent lost the title of acting agent on behalf of the owner.
Rules related to the facts
As the rules which is laid above it can said that Francis appoint Rick as it agent and told it
to buy goods on behalf of it and even have given a budget to the agent (McKendrick

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2014). Rick does not follow any rule of the owner as it disclosed all the facts with it
friends which should not be done and also it gave a promise of $33000 which is not asked
by the owner.
Conclusion
A- As the facts given above Allan cannot enforce the contract upon Francis as Francis
does not ask him for the products and as Rick is not consider to be her agent as it
already breach the agent duties so Allan cannot enforce Francis to perform the agreed
contract.
B- No, Francis is not bound to pay for the contract related to Status Quo album as it was
not asked by it to Rick, Rick personally took decision of the purchase of Status Quo
album so if Francis does not buy, and Rick had to buy the same from Allan as it is one
who promised the same.
Part-B
Rick had breach his common law duties as an agent as it told the secret of purchase with its
friend which was not asked by Francis as it told him not to disclose the fact but even he
disclosed it.
Question No 4
Issue
In the case of Prue and RuPeter, it is found that Prue order a gown from Gladrags, but the
gown which is got was not up to the mark and no proper caring was given and due to this she

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had to face health problems and even she lost her modelling career and as a result of it she
asked compensation from RuPeter (Svantesson 2016).
Rules
As per “Breach of Contract due to Negligence”, if any professional does an negligence in
providing services to its customers than the customer can ask for money compensation and
the seller have to provide it (Dolin 2018). As the seller must check all the process before
giving the final delivery to the customers.
Rules as per the facts
As per the rules prescribed above it is clear that RuPeter does not perform its duties properly
as they should have checked the product before giving to Prue. As they didn’t checked the
product and due to this negligence she had to suffer a lot (Poole 2014).
Conclusion
A- Prue can sue RuPeter for Breach of contract with Negligence as RuPeter does not a
good quality product as a result she have to lost her job so she can sue them for the
compensation. As it is there fault because of them she had to suffer so she can sue
them for remedies and can ask compensation in return.
B- If she is successful in getting the case than she can ask for monetary compensation
from the boutique and the compensation amount will be as per the court ruling and the
court will decide the amount which is suitable for Prue as a compensation amount.

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References
Andrews, N., 2015. Contract law. Cambridge University Press.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the
civil lawyer. Bloomsbury Publishing.
Cooter, R. and Ulen, T., 2016. Law and economics. Addison-Wesley.
Dolin, K. ed., 2018. Law and literature. Cambridge University Press.
Klee, L., 2015. International construction contract law (No. s 1). Wiley-Blackwell.
McKendrick, E. and Liu, Q., 2015. Contract Law: Australian Edition. Macmillan
International Higher Education.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press
(UK).
Poole, J., 2014. Casebook on contract law. Oxford University Press, USA.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Svantesson, D.J.B., 2016. Private international law and the internet. Wolters Kluwer Law &
Business.

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