HI6027 Business and Corporate Law: Case Studies Group Assignment

This assignment, a group project for the HI6027 Business and Corporate Law course at Holmes Institute, presents two case studies requiring students to analyze legal issues and apply relevant laws. The first case examines a contract dispute, focusing on the doctrine of frustration due to government intervention and its impact on contractual obligations. The second case delves into partnership law, exploring the formation of a partnership, partner responsibilities, liabilities, and the consequences of a partner's actions and death. The assignment requires students to identify the issues, apply relevant legal rules and case precedents, and provide reasoned conclusions, demonstrating an understanding of contract, partnership, and agency law principles in a business context. The solution addresses the issues of liability arising from a frustrated contract and the legal implications within a partnership, including partner duties and dissolution.

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

1BUSINESS AND CORPORATE LAW
Part A
Issue
The issue in this present situation is whether any liability has been incurred by Gary with
respect to the performance under the contract for the supply to the apartment developer.
Rule
A valid contract, which has been created effectively, forms the obligations of the parties to
the same to be legally enforceable and the parties are bound to carry out their part under the
contract. However, there are certain instances, under which the obligations with respect to a
contract might come to an end. This is known as the discharge or the termination of the
contract. The laws relating to contract delivers six methods in which a termination of the
responsibilities and rights under the contract can be effected. The six ways of discharging the
rights and responsibilities arising by virtue of the contract are:
 The rights and liabilities under the terms of the contract may be extinguished by
discharging the contract by way of performance of the terms created under the
contract. The parties under the contract may perform their part of the contract to
render the contract to be extinguished or terminated. However, for the purpose of
discharging a contract by performance of the same, the performance needs to be
unqualified and completed. Completion of a part of the performance would not
render a contract to be discharged. The same can be supported by the case of Sumpter
v Hedges [1898] l QB 673.
 The contract may also be brought to an end by virtue of any term that has been
contained in the contract the fulfilment of which will render the contract to be
discharged. The discharge can be effected by the fulfilment of any incident that has
been provided in the contract to have the effect of termination of the contract.

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 The creation of a contract always accompanies a formation of an agreement prior to
the formation of the binding contract. The parties involved in the contract may also
effect a termination of the same with the aid of an agreement in the same way as was
made during the formation of the same. However, such an agreement needs to be in
accordance with any term to that effect in the contract or as a mutual agreement
arrived at between the parties altering the contract.
 Any contravention or violation of any of the terms of the contract by the parties to the
contract may also result in the termination of the same. However, in case of such a
violation, the decision to render the contract to be discharged lies upon the person
aggrieved by such a breach. The aggrieved party may either enforce the performance
or may discharge the contract. The same can be illustrated with the case of Panchaud
Freres S.A. v. Etablissements General Grain Company [1969] 2 Lloyd's Rep. 109.
 Sometimes the imposition of sudden statutory prohibition may also render a contract
to be discharged. In this case, the performance of the contract becomes impossible to
be carried out owing to the statutory restrictions that has been brought later on. The
same can be illustrated with the case of Ankar Pty Ltd v National Westminster
Finance (Australia) Ltd (1987) 162 CLR 549.
 The principle of frustration is yet another way of bringing a contract to an end. A
contract can be discharged applying the doctrine in relation to frustration. This
doctrine can be illustrated with the case of F. A. Tamplin Steamship Company, Ltd v
Anglo-Mexican Petroleum Products Company, Ltd [1916] UKHL J0724-1. The
doctrine of frustration implies the discharge of the contract by the operation of the
law. Again, this doctrine is only available when the event owing to which the
contract has been discharged has not resulted from the acts of the parties. To apply
the doctrine, the first thing that needs to be satisfied is the happening of a

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supervening event. The doctrine is only available when the parties are not involved in
the happening of the event. The contract should not have any connection with such an
event. The same can be illustrated with the case of Bank Line Ltd v Arthur Capel &
Co [1919] AC 435.
Application
In the instant situation, Gary has been the owner of the business of running metal
fabrication. The factory of the same has been held on a long term lease. Gary has obtained a
tender, which for the purpose of supplying metal frames for the purpose of construction in
relation to a high rise apartment development. This tender has resulted in a contract for
supplying metal frames to commence within a period of six months. This contract has been
proposed to be continue for another eighteen months. However, prior to the commencement
of the work under the contract the government has made an acquisition of the property that
Gary has been holding on lease for the East-West Tunnel Link project. This would require a
new factory to be set for acting upon the contract that has been obtained under the tender,
which will require another six months. This comes under the purview of the doctrine of
frustration. This is because the acquisition of the property owing to the East-West Tunnel
Link project was a mandate of the government and the same was not under the control of the
parties. This however, has rendered the performance of the contract to be impossible and the
same has not been very predictable. Hence, the contract has been discharged by the doctrine
of frustration, and no liability has been incurred by Gary with respect to the performance
under the contract for the supply to the apartment developer.

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Conclusion
Hence, it can be stated that any liability has been incurred by Gary with respect to the
performance under the contract for the supply to the apartment developer.
Part B
Issue
Whether there is a partnership between Seamus, Koo and Lucy.
Whether Lucy and Koo are required to make payment for the ride-on mower.
Whether any of the duties of a partner has been contravened by Lucy as a result of her
weekend work.
Whether FastCut can spot the individuals who has been conducting the business under the
name of Luseko.
Whether any consequences will follow the death of Seamus with respect to the
partnership.
Rule
The law relating to partnership prevailing in Australia is been governed by the Partnership
Act 1963. The word partnership has been defined in the Act under section 6. Partnership
involves two or more than two persons who has been carrying out a business, which is
common with respect to all the participants with the perspective of making profit. This
definition of partnership includes the limited liability partnership, which is incorporated. The
definition of this concept can be best illustrated with the case of Wang v Rong [2015]
NSWSC 1419.
Section 9 under the Act contains provision with respect to the powers that the partners
have with respect to creation of transaction under the name of the firm, which would be

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rendered to be binding upon the firm. There exists a relationship as that of an agency between
the partners and the firm. Any acts that has been undertaken by the any of the partners will be
considered to be binding upon the other partners and the firm. To hold the frim or any of the
partners liable, the acts are required to be carried out under the name of the firm. In cases,
partners may aslo fail to make the firm incur any liability for their acts. When the partners act
outside their scope of authority in furtherance of the agency relationship, the partnership will
not be bound to recognise the transactions so entered upon to be binding. However, such an
excess use of the power by the agent will be considered to be not binding upon the
partnership firm and other partners if the third party in a transaction with whom transaction
has been made has the knowledge of such absence of authority.
An obligation would be incurred by the partners to make disclosure of true and proper
records and account that has the effect over the firm or other partners as provided under
section 33 of this Act. There is an obligation incurred by every partner for the purpose of
disclosing any private profit that might have accumulated to him beyond the authorisation
extended by firm or in the absence of knowledge that the other partners have making use of
the property pertaining to the business of the firm or the firm itself or the firm name under the
Act, section 34.
A partner is restrained from undertaking a business, which is similar to that of the firm and
offering competition to the firm under the Act in section 35. The profit incidental to or
accruing from such a business is required to be transferred to the firm under the firm name.
The result that might follow with respect to the partnership in case of the death of a partner
has been contained under the Act, section 38. The death of the partner has the effect of
dissolving the firm unless there are any prior agreement between the partners which demands
anything contrary. The property of the firm can be identified to be any property whose

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ownership is jointly held by the partners and construes to be the property belonging to the
firm.
Application
In the instant situation, the firm namely LuSeKo has been registered under the same
business name and has been owned and formed by the individuals Lucy, Seamus and Koo.
They promoted their business by making flyers of the same and distributed such flyers in
their neighbourhood. Regular clients has been incurred by the business. The work with
respect to the firm has been distributed among the partners. The task of cutting the grass has
been conferred upon Seamus. Lucy has been performing the task of removing clippers with
the help of her truck. The task of making maintenance of the account has been entrusted with
Koo. This can be construed to be a partnership as all the partners are participating in the
business of the firm and they have been doing the same jointly using the joint property of the
firm.
The contract for making the purchase of the ride-on mower has been entered upon by
Seamus with the view to utilise the same in the business of the firm. Hence, it needs to
construed to be a contract undertaken in the name of the firm. This would imply that the
contract would be binding upon the firm and upon other partners.
Lucy on the other hand has been engaged in a business of similar nature during the
weekends using the clients of the firm. Moreover, the profits that has been accrued from the
same towards Lucy has been shifted to a separate account and not in the account belonging to
the firm. This makes Lucy liable for the contravention of the duties that she has for the
purpose of being a partner. She will be required to remit the profit she has been earning from
that business to the firm.

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FastCut needs to contact ASIC for discovering the individuals who are operating the
business under the firm name LuSeKo for the purpose of taking legal actions against the firm.
ASIC is conferred with the power to regulate all the businesses operating in Australia.
There has been no contract evident between the partners as to the consequences of the
death of the partners. Hence, the death of Seamus will result in the dissolution of the firm.
Conclusion
There is a partnership between Seamus, Koo and Lucy.
Lucy and Koo are required to make payment for the ride-on mower.
The duties of a partner has been contravened by Lucy as a result of her weekend work.
FastCut can spot the individuals who has been conducting the business under the name of
Luseko by contacting ASIC.
The death of Seamus will result in the dissolution of the firm.
The identification of the property pertaining to the firm can be made by assessing whether
the property is hold under the joint name of the firm and used for the purpose of running the
business of the firm. The property belonging to LuSeKo can be utilised for appropriating the
losses.

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Reference
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549
Bank Line Ltd v Arthur Capel & Co [1919] AC 435
Panchaud Freres S.A. v. Etablissements General Grain Company [1969] 2 Lloyd's Rep. 109
Sumpter v Hedges [1898] l QB 673
Tamplin Steamship Company, Ltd v Anglo-Mexican Petroleum Products Company, Ltd
[1916] UKHL J0724-1
The Partnership Act 1963
Wang v Rong [2015] NSWSC 1419