HI6027 Business and Corporations Law Group Assignment Report

This document presents a comprehensive solution to a Business and Corporations Law assignment, addressing both contract law and corporations law principles. Part A focuses on a case study involving a company's liability for its sales manager's actions, applying the law of agency to determine the company's responsibility for the manager's advice and potential losses incurred by customers. It examines issues of authority, apparent authority, and the manager's breach of duties. Part B delves into partnership law, analyzing whether a partnership exists between individuals, the liability of partners, potential breaches of partnership duties, and procedures for identifying business members. It also covers the effect of a partner's death on the partnership, providing a detailed analysis of the legal issues presented in the assignment.

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Student Name:
Date:
Institution:

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Part A
Question 1
Answer:
Issue: In this case, it has to be seen if Swimmingpool Co Ltd can be held liable for the actions of
their sales manager Martin. In order to deal with this question, the principles concerning the law
of agency need to be applied.
Rule: The law provides that when the agent is acting within the scope of agency, it is considered
bad that principal is bound by agent's actions. It needs to be mentioned that in such a case, it has
to be seen if the agent has been authorized by the principal for a particular act or if it appears that
the agent was authorized for this purpose or if the agent has the authority that is the result of
agency relationship (Baxt, 1991). Hence, it is clearly provided by law of agency that the
principal can be held legally responsible for agent's actions if the actions fall under the scope of
authority provided the agent. Similarly, the responsibility of the principle arises regarding any
loss caused to the third party due to the actions of the agent (Fishman, 1987).
Application: In view of the legal position mentioned above, it can be stated in this case that
Martin had been acting as agents of the company. Authority has been provided to Martin
expressly for entering into contracts on behalf of the corporation. As a result, been Martin gave
advice to the customers regarding the location of the pools. It can be said that Martin was acting
under the scope of authority provided to him.
Conclusion: In view of this reason, it is clear that Swimmingpool Co Ltd is liable for the actions
of Martin. Moreover, it can also be said that the company is liable for the loss suffered by the
customers due to the actions of Martin.

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Question 2
Answer:
Issue: In this question, it has to be seen if the company may deny its liability for Martin's actions
as Martin failed to follow the instructions of the company.
Rule: According to the rules of the law of agency, it doesn't worry the generally the principle is
held liable for the acts of its agent. But in such cases it is required that either the act falls under
the scope of authority of the agent or the act should be ratified by the principal. At the same time,
the principal can be held liable for the actions of agent if under the circumstances, it is
reasonable to conclude that it may be believed by a third party that the agent enjoys the power to
act. In such cases the law does not allow the principle to deny its liability for the acts of the agent
if that acts fall under the apparent authority of the agent. Therefore, a principal can be considered
to be bound by a false representation of the agent even if principal is personally not guilty.
Application: Due to the agent's apparent authority, it is possible for a third party to reasonably
assume that the agent had the power to make representations that are generally made during the
negotiations regarding such contracts. In view of the legal position that has been discussed
above, it can be concluded that the company has appointed Martina as its agent.
Conclusion: As a result, Swimmingpool Co Ltd cannot be allowed to claim afterwards that it is
not liable for Martin's actions view that the reason that he did not follow the instructions of the
company.

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Question 3
Answer:
Issue: The issue that is present in this question is if Martin can be held liable for the loss suffered
by the company. Due to the wrong advice given by Martine, a number of swimming pools started
to sink. Several consumers also made the complaint that their swimming pools had not been
constructed in accordance with the contract.
Rule: According to common law, if the agent acts beyond its authority, the liability of the
principal is still present. However in such cases, it is possible to hold the agent liable for the loss
that has been suffered by the principal on account of the actions of the agent did these actions
were beyond the scope of authority or if the agent did not follow the instructions of the principal.
It is also worth mentioning that the common law as described certain duties for the agents. Under
these duties, it is necessary that the agents should act, keeping in view, the best interests of the
principal (Fridman, 1996).
Application: Therefore, when the agent has been given the responsibility to negotiate a contract,
it is necessary that the agent protects the interests of the principal. Martin had also collected
money from the customers of the company but he did not deposit all the money with the
company. In this regard, it is the duty of the agents that they should not make a secret profit.
Therefore in this case, it can be stated that Martin had breached his duties as the agent of the
company.
Conclusion: As a result, Martin can be held liable to the company for the laws that has been
suffered by the company due to the actions of Martin.
Question 4

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Answer:
Issue: In this question, it needs to be seen if any law will be breached by Martine if he sets his
own business that competes with the business of SwimmingPool Co Ltd. according to the law.
Rule: It is the responsibility of the agent, including Martin, to make sure that any business
established by the agent a setup only after informing the principal company. Similarly, Martin is
also required by the law to make sure that there is no conflict of interest between the new
business established by him and the business of the company.
Application: As an agent of the company, it is the obligation of Martin to avoid conflicts of
interest with the principal. For this purpose a restraint of trade clause can also be used by the
parties. The purpose of such laws is to prevent the agent from establishing a business that is in
competition with the business of the principal.
Conclusion: Therefore, if Martin decides to set up his own business, it will be considered as a
breach of his fiduciary duties as the agent of the company.

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Part B
(a)
Issue: Are Lucy, Seamus and Koo carrying on a partnership?
Rule: In order to decide if they're legitimately the parties can be described as a partnership, it has
been provided by Partnership Act that there are three elements that need to be satisfied for the
purpose of establishing the presence of a partnership between the parties. These ailments can be
described as follows:
 The carrying on of a business;
 In common;
 With a view to profit.
It has been stated in Smith v Anderson (1880) that it is implied by the expression 'carrying on'
that there should be a repetition of work. Similarly, the association that has been formed merely
for doing one act that was not going to be repetitive has to be excluded. It is the series of actions,
which amount to a business.
Application: Therefore the association should be formed for the purpose of carrying on a series
of acts. In order to form to a partnership, the business should be carried on by on our behalf of all
the partners. However, it is not necessary that all partnership also take an active part (Re
Ruddock, 1879). For example, in Lang v James (1912), action was initiated by an English
corporation against the defendants. The company alleged that the three defendants are carrying

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on business in Melbourne as partners. The high court stated that as distinct bank accounts were
maintained, it was apparent that there was no partnership.
Conclusion: However in the present case, it is clear that the parties are performing business in
common and for making profit, it can be concluded that there is a partnership between Lucy,
Seamus and Koo.
Issue: Assuming that Lucy, Seamus and Koo are in partnership, would Lucy and Koo be liable to
contribute to the purchase of the ride on mower?
Rule: According to section 9 of the Partnership Act, it has been mentioned that each partner of
the form is considered as being jointly liable regarding firm’s debts and obligations that has been
incurred at a time when such person was a partner, and after his death, the estate of such partner
is also severally liable for such debts and obligations.
Application: In this way, the meaning of joint liability of the partners is that even if the liability
has been incurred by two or more persons, there is only one right of action against such persons.
Therefore if judgment has been obtained against a partner or partners, it is possible to bring
further legal action only against the partners, who could have been jointly liable if they would
have been a part of the action.
Conclusion: In view of the legal position mentioned above, it can be stated that in the present
case also, Lucy and Koo will be bound to pay for the purchase of ride-on mower.

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Issue: Is Lucy, in breach of any partnership duties as a result of carrying out the weekend work?
Rule: According to the partnership law, the partners stand in a fiduciary relationship. In
Birtchnell v Equity Trustees (1929) the court stated that indeed the relationships that exist
between the partners is fiduciary (Cameron v Murdoch, 1986). It is presumed by the law that a
partnership is based on mutual trust between the partners and also on the confidence that the
partners have in the integrity of each other.
Application: The fiduciary duties that are imposed on the partners towards each other are as
follows (Fraser v AGT (Qld) 1988):
 To act honestly and in good faith (Cameron v Murdoch, 1986);
 To provide full accounts of all information and assets in the possession and control of the
partner;
 To avoid any conflicts of interest;
 To account for benefits that have been received from the partnership; and
 To avoid making a personal profit from the opportunities and information available to the
partner business.
Conclusion: In this case, Lucy has breached the duty imposed by the partnership.
Issue: If FactCut wishes to commence a legal action against LuSeKo to recover the purchase
price of the ride-on mower, how could fastCut discover who the individuals are behind that
business name?

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Rule: The names and details of the members can easily tell a person regarding the individuals
who are behind the business. However, member information cannot be obtained in case of a
public company. The reason is that these companies are not under an obligation to give
information regarding the members.
Application: On the other hand, a registered business name is a trading name under which a
person or persons are carrying on business or trade.
Conclusion: Therefore it in the present case, FastCut wants to start legal action against LuSeKo
for the purpose of determining the purchase price of the ride-on mower, it is possible for FAst
Cut to know regarding the individuals who are behind the business name.
Issue: What effect will Seamus's death have on the partnership?
Rule: The law provides that in the event of the death of a partner, the general partnership
automatically comes to an end, unless there is an agreement between the parties to the contrary.
As a result, unless the partners have made an agreement according to which the partnership is
going to continue even after the death of a partner, the general partnership will be dissolved in
the event of the death of a partner.
Application: On the other end, if the remaining partners are willing to carry on the partnership
business after its dissolution, or the partners should agree (Everingham v Everingham, 1911).
The resulting partnership business will be considered by the law as a new partnership.
Conclusion: Therefore, in case of Seamus’ death, the partnership will come to an end if there is
no agreement to the contrary.

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Issue: How could Lucy and Koo determine what is partnership property? How would the
partnership's property be used to meet the LuSeko's losses?
Rule: Generally, all the assets that have been brought into the partnership or that have been
required afterwards on account of the partnership are considered as partnership property.
Application: Therefore the property that has been brought into partnership stock or acquired,
whether by purchase or otherwise, on account of the firm and the course of partnership business,
needs to be treated as partnership property (Cameron v Murdoch, 1986).
Conclusion: Such property should be applied by the partners only for the purposes of partnership
and according to the partnership agreement (Kelly v Kelly, 1990).

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References
Baxt R, (1991) ‘Ultra Vires – Has it Been Revived?’ 1 Company and Securities Law Journal 101
Fishman, S. (1987) "Inherent Agency Power - Should Enterprise Liability Apply to Agents'
Unauthorized Contracts?" Rutgers Law Journal 19
Fitzpatrick J, Symes C, Veljanovski A & Parker D, (2017) Business and Corporations Law 3 rd
ed., LexisNexis Butterworths Australia
Fridman, G H L., 1996, The Law of Agency Butterworths, 7th ed., 304
Case Law
Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384
Cameron v Murdoch (1986) 63 ALR 575
Cameron v Murdoch (1986) 63 ALR 575
Everingham v Everingham (1911) 12 SR (NSW) 5
Fraser Edmiston Pty Ltd v AGT (Qld) Pty Ltd [1988] 2 Qd R 1
Kelly v Kelly (1990) 92 ALR 74
Lang v James Morrison & Co Ltd (1912) 13 CLR 1
Re Ruddock (1879) 5 VLR (IP & M) 51
Smith v Anderson (1880) 15 Ch D 247