HI6027: Business and Corporate Law Tutorial Questions, Semester 2

This assignment provides solutions to tutorial questions covering key concepts in Business and Corporate Law. The document begins with an analysis of negligence, including duty of care, breach of duty, causation, and harm, using a supermarket case study to illustrate these principles. It then explores Australian Consumer Law, focusing on consumer rights, seller responsibilities, and remedies for defective products, with a case study on product liability. The assignment also delves into franchising, outlining its advantages and disadvantages, and discussing its relevance for new businesses. Furthermore, it examines the landmark case of Salomon v A Salomon & Co Ltd, explaining the concept of corporate veil and its implications. Finally, it clarifies the roles of members and shareholders in a company, including how one becomes a member and the circumstances under which membership ceases, providing a comprehensive overview of corporate structure and governance.

Business and
corporate law

INTRODUCTION
Business and Corporation laws deals with all of the commercial activity through which an
entity can perform better within the market. Any of the organisation can perform better only in
that respective circumstances were different laws as well as policies are considered at the time of
making decision. In context of the file, six main heading are there on a weekly basis which is to
be answered on different question which is related with commercial sector.
WEEK 6
a)
Law of Negligence can be defined as the law where another person has to suffer from
different types of problem just because of the negligence done by one party. It is the position
where defaulter has to compensate the innocent party for the default he or she has performed.
The four essential elements of negligence are duty, breach, cause and harm. All of this factor
must be proved in it.
Duty of Care can be defined as the part of Negligence which simply explains that any of
the person who performs their part of work should be able to understand that in any of the
situation they will not conduct any of those work due to which other person has to suffer from
any of the problem. It is simply a legal obligation for anyone who is perform any sort of work.
By analysing the given case study, it was mandatory for Eggeeay Supermarket to check each of
the think in fruit section but they didn’t do that which was one of the reason that accident took
place in that respective section (Orts, 2017). In short, the duty of care in this respective case was
of Eggeeay Supermarket.
b)
It can be easily determined that company hold the duty of care in this respective situation
and it is necessary for them to perform their part without showing any of the negligence. But,
supermarket didn’t perform their part of work due to which accident took place which means that
breach of duty of care can be seen within this respective situation. It is necessary to understand
for any of the organisation that whenever they perform any of the business activity they must
ensure that all of the guidelines are being followed so that customers will not have to face any
sort of problem in any of the situation. In this respective case, it was found that although,

supermarket holds the duty to check the floor of fruit section but still they were needed to ensure
that all of the section within the supermarket is clean and it will not create any of the problem for
customers who will visit the supermarket.
c)
No, the answer will not be different if Barbara has slipped on some graphs in the fruit
section of the store because according to their plans and polices management have the
responsibility to check fruit section in every 15 minutes where they failed. In this respective
situation company will be held liable for their carelessness because as per their Article of
Association they have the responsibility to check floor in every 15 minutes where they fail to do
so. In addition, it is essential to ensure that while performing any of the business activity they
will not create any of those situation due to which customers has to suffer because it does have a
negative impact and even slight negligence has created huge problem for the customer who
visited the store.
WEEK 7
Australian Consumer Law can be defined as the law and regulation which simply
explains about the relation that any of the organisation and its customers has to maintain. As per
the consumer law, it is the responsibility of seller as well as of organisation to disclose every
information about the product which they are selling to the customer and if in any of the
circumstances organisation fails to do so then buyer has the right to take legal against the seller.
It is among one of those laws and regulation which plays crucial role for maintain the relation
between seller and consumers. There are certain rights which are given to the customers which
includes the right to repair means if any of the product which has been sold to customers are not
working properly then in that respective situation it is the responsibility of seller to repair the
product and return back to consumer. Secondly, it is essential for customer to understand that
they hold the right in which they can ask seller for refund as well as compensation for the
product which are not as per the description. In addition, also, buyer holds the right to sue seller
if they have to suffer from serious nature of issue just because of the product which has been sold
to them for seeking the compensation amount.
As per the given case scenario, it was found that Brown had contracted dermatitis just
because of the underpants which he purchased from Underwear Galore in Adelaide. Even,

retailer had not provided any of the information to Brown regarding bisulphite of soda which
was the main reason due to which Brown has to suffer from underpants. In this respective
situation, remedy is available for Brown where he can file the case against retailer (Pollman,
2016). In my opinion, he will become successful in this respective situation because he had
checked the underpants at the time of buying but it was the responsibility of seller to inform each
and every thing about the product. So, Brown will be compensated for this respective case. Also,
retail will be liable to pay all of the medical expenses as well. Even underpants will be refunded
because clear description about the product has been not provided by the seller to consumers.
WEEK 8
It is needed to understand for any of the person who is going to take any of the franchisee
that what are its benefits and drawbacks so that business activity can be performed smoothly.
Below some of the advantage and disadvantage of franchisee has been mentioned:
Advantage
 There are high chances of business to take growth in very short time period which is
important for accomplishing the goals (Gelter and Helleringer, 2018).
 High level of motivation can be obtained because of experienced time which is
conducting same form of business since long time.
Disadvantages
 Huge amount of capital is required for business entity whenever they plan to take
franchisee.
 This types of business get limited opportunity to cover the market because of the other
franchisee available in the market.
In present scenario, there is huge competition within the market due to which it is necessary
for person to ensure that how they are willing to perform business activity. But, in context of any
of the person is entering into the market for first time then they must go for franchisee because it
will certainly allow them to take competitive advantage in the market (Klausner, 2018).
Customers in this types of business can be connected easily through which goals can be
accomplished easily in a very short time period. Addition, it can be said that opting the option of
franchisee will have required less burden upon the person as compared to business entity.

WEEK 9
Salomon v A Salomon & Co Ltd [1897] AC 22, is one of the most popular case of
present scenario which simply discusses that any of the person is different from business
organisation. Company and its member, director and shareholder are different from each other.
The significance of this case was just to ensure that person working within the company will
never be liable for the debt of company and it is necessary for entity to pay off the debt money
because of the concept introduced in company law that Organisation is a separate legal entity.
Corporate Veil can be defined as the concept in which simply separate the personality of a
corporation form the personalities of its shareholder as well as protects them from being
personally liable for all of the debts of a company. The main purpose of introduction of this
concept was simply to ensure that shareholders will not be liable for the debt of company
(Burton and Bainbridge, 2019). This respective concept can be lifted in that respective situation
where it is found that any of the member of a company has taken those decisions which are
against the law or which is not permissible. Once, corporate veil is lifted then, defaulter is held
personally liable for all of the debt of the company.
WEEK 10
Members: It is explained as the process in which person subscribes the memorandum of
the company which means that how organisation will have to perform their business activity.
Shareholders: This are the person who simply holds the share within in the organisation
for having a share capital. Shareholders holds the right where they can enter and exit from the
organisation at any time period.
The different ways in which a person can become the member of a company is possible
in that respective situation where person agrees in writing and get his or her name registered in
with the register of members of a company. Even person can become member of a company by
subscribing to MOA.
Any of the person, association, firm can become the member of organisation if they have
subscribed to the memorandum of an entity. Even in written should be there were other member

must be agreed to accept the person a member of a company. Also, whose name is registered
within the register can become the member of company (Bowley, 2019). All of this member are
eligible to become the member of an organisation. Also, unsound mind and minor age person is
not eligible to become the member of a company.
There are some of the situation where person cease to be the member of an organisation and
those condition are mentioned below:
 When all of the share are sold to another person where transfer is registered within the
company.
 Those condition where share has been forfeited through legal process.
CONCLUSION
From the above discussion, it can be concluded that any of the business entity needs to
understand that they must follow business and corporate law for attaining their targets on time.
Any the business decision must be taken by organisation after analysing each of the factor so that
favourable decision can be obtained.

REFERENCES
Book & Journals
Orts, E. W., 2017. Corporate Law and Business Theory. Wash. & Lee L. Rev., 74, p.1089.
Pollman, E., 2016. Constitutionalizing Corporate Law. Vand. L. Rev., 69, p.639.
Gelter, M. and Helleringer, G., 2018. Opportunity makes a thief: corporate opportunities as legal
transplant and convergence in corporate law. Berkeley Bus. LJ, 15, p.92.
Klausner, M., 2018. Empirical studies of corporate law and governance. In The Oxford
Handbook of Corporate Law and Governance.
Burton, N. and Bainbridge, J., 2019. Spiritual Discernment, the Incorporated Organization, and
Corporate Law: The Case of Quaker Business Method. Religions, 10(1), p.35.
Bowley, R., 2019. Enabling law students to understand business concepts: reflections on
developing a business case study for corporate law. The Law Teacher, pp.1-25.