LAW6000 Business and Corporate Law: Comprehensive Case Study Analysis

This document presents a comprehensive case study analysis addressing various aspects of business and corporate law. The case study explores scenarios related to contract formation, including the enforceability of Heads of Agreement and the impact of confidentiality clauses. It also delves into consumer protection under the Australian Consumer Law, examining misleading conduct, unfair contract terms, and the application of standard contract terms. Furthermore, the analysis covers director's duties and responsibilities under the Corporations Act 2001, including the business judgment rule and the implications of unpaid debts. Agency law is examined, focusing on the scope of an agent's authority and the liabilities arising from exceeding that authority. Finally, the document touches upon intellectual property, specifically trademark and copyright protection, and the duration and infringement of copyright. The case study provides a detailed examination of relevant legal principles, applying them to specific factual scenarios to arrive at logical conclusions.

Running head: BUSINESS AND CORPORATE LAW
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BUSINESS AND CORPORATE LAW
Name of the student:
Name of the university:
Author’s note:

1BUSINESS AND CORPORATE LAW
Question 1
Part 1
Issue
Issue involved in this scenario whether Tina will be bound by law to purchase such
business of Jeff as a consequence of signing a Heads of Agreement.
Rules
It should be considered in this context that when the Heads of Agreement bind a party
legally to do in accordance with such agreement. This Heads of Agreement is one type of
document, which functions as a preliminary agreement for such basic terms of any business
transaction. The Heads of Agreement for any business transaction may be binding, as well as
non-binding by the law. In the case of Allen v Carbone 1975,1 it has decided that the binding of
Heads of Agreement will be depended on the language of such document. The intention of the
parties will be intended to make an agreement, which should be binding, and it is to be judged
accurately having concern to such dialectal contained in that Heads of Agreement. In a latest case
of Michael Lahodiuk v Vincent Pace and Prid Pty Ltd. 2013,2 it has decided that the parties to a
business transaction of Heads of the agreement will be bound if there is any provision relating to
the confidentiality of the business.
1 Allen v Carbone [1975] HCA 14
2 Michael Lahodiuk v Vincent Pace and Prid Pty Ltd [2013] NSWSC 512

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Application
In this given scenario, Jeff has made a Heads of Agreement with Tina to sell his business
to her. After preparing a formal contract, Tina has refused to buy his business. However, Jeff has
told her that she is bound to purchase his business as per such Heads of Agreement.
Applying the case Allen v Carbone 1975,3 in this scenario, the language of the Heads of
Agreement has intended to create a contract for the sale of the business of Jeff. There is a
provision in this Heads of agreement that the solicitor prepared an agreement for the further
contract. Therefore, there is a precise language of making a contract to buy such a business.
Applying Michael Lahodiuk v Vincent Pace and Prid Pty Ltd. 2013,4 in this scenario,
there is no confidentiality in that Heads of Agreement. Therefore, Tina can avoid such contract
by such a statement.
Conclusion
Therefore, it can be concluded in this scenario, as there is no confidentiality in that Heads
of Agreement, then Tina can avoid such contract.
Part B
The issue arises whether Tina will be binding or not if there is a term regarding suitable
finance, which is obtained by Tina. In this scenario, there is confidentiality for the financial
condition of Tina. In the case of Michael Lahodiuk v Vincent Pace and Prid Pty Ltd. 2013,5 it
has already decided that if there is confidentiality in any Heads of Agreement then those Heads
3 Allen v Carbone [1975] HCA 14
4 Michael Lahodiuk v Vincent Pace and Prid Pty Ltd [2013] NSWSC 512
5 Michael Lahodiuk v Vincent Pace and Prid Pty Ltd [2013] NSWSC 512

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will be binding to the parties to that agreement. Therefore, it can be concluded in this context
that There such Heads of Agreement will be binding as that agreement is confidential.
Question 2
Part A
Issue
The issue involved in this scenario, whether Dess can able to go for any legal proceeding
under the Australian Competition and Consumer Commission, and Australian Consumer Law
against the company.
Rules
Rules relating to the general protection of the consumers under the Australian Consumer
Law will apply here to decide whether any person can able to sue a company for some specific
reasons. Chapter 2 of the Competition and Consumer Act 2010,6 which is the Australian
Consumer Law, has dealt with the general protection of the consumers. Section 18 of the Act7
describes the misleading or unreliable conduct of the seller, which is punishable wrongdoing of
that person. The court of law will punish the seller of any product if he has made deceptive and
misleading conduct with any consumer. Section 23 of this Act8 has dealt with the unfair terms of
a contract. The contract with the consumer will be null and void if there is any unfair term of that
contract.
6 Competition and Consumer Act 2010
7 Competition and Consumer Act 2010 s 18
8 Competition and Consumer Act 2010 s 23

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Application
In this given scenario, Dess has bought a membership card for $10 with a form fill up
from Savalot Shopping Centre Ltd (SSC), for which he has received a lucrative discount.
However, for some minor reasons, the company rejects to provide such a discount. Even if he
wants to cancel such membership, he has to pay $150, which is ten times than the actual price.
Applying Section 18 of the Act9 in this situation, the company has misled Dess as they
make some deceptive exertion with him regarding such discount. Therefore, he can go for legal
proceeding for such misleading or deceptive act of the company.
Applying Section 23 of this Act,10 there is an unfair term of the contract that the
cancellation fees of such membership are ten times than original. Thus, he can start legal
proceeding against the company.
Conclusion
Therefore, it can be concluded in this scenario that Dess can start legal proceeding
against “SSC”.
Part B
Issue
The issue involves whether Dess can start legal proceeding under ACCC if he purchases
food from that company.
Rule
In this scenario, section 27 of the Australian Consumer Law has discussed the Standards
terms of the contract.11 If there is a standard term of any contract, which is not unfair, then the
parties should fulfil such condition. Otherwise, there will be a breach of contract.
9 Competition and Consumer Act 2010 s 18
10 Competition and Consumer Act 2010 s 23
11 Australian Consumer Law s 27

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Application
In this scenario, the company “SSC” has given a discount on the various items without
any food products. Dess has bought food items from that company.
Applying section 27 of the Act,12 if Dess buys food item from that shop, then he will not
get any discount, as it has clearly described in the paper that there is no discount on food items.
Conclusion
Therefore, it can be concluded in this context that he can not be able to sue the company
under ACCC.
Question 3
Issue
The issues involved in this scenario, (a) whether Phil is individually liable for such
unpaid debt or not; (b) whether Robert will be personally liable for such debt, and (c) whether
such ‘business judgment rule’ will be relevant for Robert or Phil.
Rules
The rules relating to director’s duties and responsibilities of a company will be discussed
here for resolving such issues. Section 180 of the Corporations Act 200113 describes that the
directors of a company should exercise their duties with due carefulness and diligence. Section
181 of this Act14 describes that the directors should take any step with good faith for the benefit
12 Australian Consumer Law s 27
13 Corporations Act 2001 (Cth) s 180
14 Corporations Act 2001 (Cth) s 181

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of the company. Section 182 of this Act15 has concerned about such use of the position of a
director that they should not use their position improperly, which may grounds to the detriment
to that company. Section 588G of this Act16 has dealt with such duty of the directors to preclude
any bankrupt or insolvent trading of the company. Section 180 (2) of the Act17 deals with such
‘business judgment’ that a director who creates such business judgment should make this with
good faith or without any personal interest of such subject matter in that judgment.
Application
In this given scenario, Phil is a director of a LightsBright Pty Ltd and delivers materials
worth $75 000 to CheepCheep Pty Ltd. Robert is a director of CheepCheep Pty Ltd and he does
not pay such unpaid debt.
Applying section 180 of the Act,18 Phil and Robert have a duty to deliver or receive the
materials respectively, with due diligence and for the commercial benefit of their company.
Applying Section 181 of this Act,19 both the directors of both companies have done this
transaction with good faith and benefit for their companies.
Applying section 180 (2) of the Act20 regarding ‘business judgment rule’ in this context,
that they have a position to make any decision on their companies’ business. Therefore, this rule
will relevant in this scenario on both the directors.
Conclusion
Therefore, it can be concluded in this context:
15 Corporations Act 2001 (Cth) s 182
16 Corporations Act 2001 (Cth) s 588G
17 Corporations Act 2001 (Cth) s 180(2)
18 Corporations Act 2001 (Cth) s 180
19 Corporations Act 2001 (Cth) s 181
20 Corporations Act 2001 (Cth) s 180 (2)

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(a) Phil as a director of such LightsBright Pty Ltd will not be held individually
responsible for such unpaid debt;
(b) Robert as a director of such CheepCheep Pty Ltd will not be held personally
responsible for such unpaid obligation; and
(c) Such ‘business judgment rule’ will be significant or relevant to both the directors in
this circumstance.
Question 4
Part A
Issue
Issues involved in this scenario whether (a) Allan is able to legally enforce a contract
with Francis for those particular items and (b) Francis is responsible to purchase such Status Quo
albums from the shopkeeper, Allan and such consequence for Rick.
Rules
The rules of the contract of the agency will apply here to resolve such issues. In
commercial law, the law of agency has helped to deal with any contractual, fiduciary relationship
or any quasi-contractual relationship, which has involved an agent. He has been authorized for an
act on behalf of a principal to create a legal connection with the third party. In the case of
Rosenbaum vs Belson 1900, it has decided that the agent of the principal should act within the
boundary of the act, which has been instructed by the principal.21 They should not do more than
21 Rosenbaum v Belson [1900] 2 Ch. 267

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that. In the case of Watteau vs Fenwick 1893,22 it has held that the agent may be held personally
liable if he has done any act outside the authority, which has provided by the principal.
Application
In this given scenario, Rick has made a contract with Allan for $32,000, which has been
already limited to $25,000 by his principal Francis.
Applying the case of Rosenbaum vs Belson 190023 in this scenario, Rick has made the
contract with Allan, which is not instructed by his principal Francis. Therefore, there will not be
any binding contract between the shopkeeper Allan and Francis.
Applying the case of Watteau vs Fenwick 189324 in this context, the agent Rick should
not buy any instrument on behalf of Francis without prior permission of her.
Conclusion
Therefore, it can be concluded in this context:
(a) Allan can not implement the contract with Francis as Rick has made such contract
going outside such authority.
(b) Francis is not bound to contract to buy the albums of Status Quo from Allan, as well
as Rick will not be held responsible to Francis as he has done so by going outside his
authority.
22 Watteau v Fenwick [1893] 1 QB 346
23 Rosenbaum v Belson [1900] 2 Ch. 267
24 Watteau v Fenwick [1893] 1 QB 346

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Part B
The agent will be responsible or liable under the common law of Australia if the principal
suffers any loss for any negligent act or such a breach of contract of the agent. In the case of
Peterson vs Moloney 1951,25 it has demonstrated that the agent should fulfil his duties on behalf
of his principal. Rick, in this scenario, has made the contract with Allan in the name of Francis,
which is outside the authority of his authority. He has breached his common-law duties as an
agent. Therefore, he has to pay compensation or damages for such breaches to his principal,
Francis.
Question 5
a) In this given scenario, Jenny can obtain two types of intellectual property protection
for such items. She can get the ‘trademark’ protection for such logo or brand and the
‘copyright’ protection for such software, as well as an electronic dog collar. She
should register such a logo or brand to obtain such ‘trademark’ protection.26 There are
no such rules to register her ‘copyright’ on such software; it comes automatically
under the Copyright Act 1968(Cth).27
25 Peterson v Moloney (1951) 84 CLR 91
26 Davison, Mark, Ann Monotti, and Leanne Wiseman. Australian intellectual property law. (Cambridge
University Press, 2015).
27 Copyright Act 1968(Cth)

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b) There are several periods for such duration of copyright. However, in the Copyright
Act 1968(Cth)28, such copyright can be held for a lifetime plus 70 years after the
lifetime of the actual owner.
c) The infringement of such copyright can be made by theft, piracy, as well as by such
freebooting. The more appropriate of copyright infringement if freebooting than other
activities. Such term freebooting means an infringement of such copyright by using
the internet, or copying it to online media and many other ways.
d) There are two types of remedies for infringement or contravention of copyright, such
as civil remedies and criminal remedies. Under the Copyright Act 1968 (Cth)29, the
aggrieved party can sue the defendant, and the court has the power to seize such a
copyrighted document. The aggrieved can get statutory damages, as well as additional
damages. Under section 115 (4) of the Act,30 the court has a discretionary power to
provide an award of additional compensations for such infringement of copyright.
Bibliography
Journal & book
Davison, Mark, Ann Monotti, and Leanne Wiseman. Australian intellectual property law.
(Cambridge University Press, 2015).
Legislation
Australian Consumer Law
28 Copyright Act 1968(Cth)
29 Copyright Act 1968(Cth)
30 Copyright Act 1968(Cth) s 115(2)

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Competition and Consumer Act 2010
Copyright Act 1968(Cth)
Corporations Act 2001 (Cth)
Cases
Allen v Carbone [1975] HCA 14
Michael Lahodiuk v Vincent Pace and Prid Pty Ltd [2013] NSWSC 512
Peterson v Moloney (1951) 84 CLR 91
Rosenbaum v Belson [1900] 2 Ch. 267
Watteau v Fenwick [1893] 1 QB 346