Holmes HI6027 Business Law: Agency & Partnership Case Study T1 2019

This document presents a comprehensive case study solution for a Business and Corporate Law assignment. Part A addresses issues related to agency law, specifically focusing on the responsibilities and liabilities of a company (Swimmingpool Co) for the actions of its sales manager (Martin), including breach of duty and setting up a competing business. Part B analyzes a partnership scenario involving three students (Lucy, Koo, and Seamus) and their grass-cutting business (LuSeKo), examining partnership duties, liabilities, and the implications of a partner's death. The analysis references relevant sections of the Partnership Act 1963 and various case laws to support its conclusions. Desklib provides access to this and similar solved assignments for students' reference.

CASE STUDY ASSIGNMENT
CORPORATIONS AND BUSINESS
LAW

Part A

Issues:
Whether the Swimmingpool Co can be said to
be responsible for the acts done by Martin,
Whether the said company will be able to
claim that they are not liable for the acts of
Martin,
Whether Martin will be held liable to his
employer for any of the acts done by him and
on what basis,
Whether Martin has done breach of any law
when he planned to set up a similar type of
business.

Relevant Rule of Laws:
Agency law is a type of commercial law where a
person called an agent is being authorised to act
or perform according to the directions given by
another person or on behalf of such person
called the principal in order to make dealings
with outsiders called the third parties. It is
observed in the decision given by Pirie Street
Stage 1 P/L v Trotman & Anor And Stewart
& Ors.
The agent is authorised by the principal either in
an express way or in an implied manner to act
under his control but on his behalf as observed
in Hely Hutchinson v Brayhead Ltd .

Relevant Rule of Laws
(Contd.)
When the agent acts according to the
directions of the principal within the authority
conferred to him, his acts will be binding on
the principal who can be held responsible for
such as observed in the case of Lyford v
Media Portfolio Ltd.
 If the principal has allowed the agent
expressly to act beyond his authority, then
later on he cannot deny his liability for any
act done by such agent as observed in
Panorama Developments (Guildford) v
Fidelis Furnishing Fabrics Ltd.

Relevant Rule of Laws (Contd.):
Any type of illegal act or misconduct by the
agent will bind the principal provided such act is
done within the authority entrusted to the agent
and during the course of agency between them.
The principal has the right to deny his
responsibility for any wrongful act when the
agent has gone beyond the responsibility given
to him or has acted without any authority as
given in the case of Shaddock and Associates
Pty Ltd v Parramatta City Council (No 1).
An agent has a duty to act in good faith to incur
the best interest for the principal as given in
Caltex Oil (Australia) Pty Ltd v The Dredge
Willemstad.

Relevant Rule of Laws
(Contd.):
The agent is prohibited to set up a business
in competition to the business of business.
In the case of Regal (Hastings) Ltd v
Gulliver [1942] UKHL1, that the agent is
barred from incurring any personal gain
while acting as an agent.

Application:
Swimmingpool Co Ltd has appointed Martin as
the sales manager. He was assigned with the
duty to give quotations to the customers about
the cost of installing variety of swimming pools
in the company.
He is also authorised to ensure that a deposit is
to be paid by those customers and such deposit
is to be deposited in the accounts of the
company.
Martin was given a fixed salary but the
agreement of his employment gave him option
to incur bonus if he can successfully exceed his
target. Thus a relation of agency can be said to
exist between Martin and Swimmingpool Co.

Application (Contd.)
Martin had contracted with 20 customers and half
of their work had tarted. But one month after this,
the company got many complaints that the
construction work of the pool was quite different
from what the customers are contracted for. These
arises out of the employment of the agent in the
company, thus the company is vicariously liable for
this.
Martin did not deposit in the bank account the
profits collected by him. This can be regarded as
the act of disobedience by the agent as he did not
follow the instructions given to him by the
company.

Application (Contd.):
Martin attempted to set up a business individually
in competition with the business of Swimmingpool
Co. This also shows that he breached his duty as an
agent.

Conclusion:
The Swimmingpool Co is responsible for the acts
done by Martin when he acted within his authority,
The said company will be able to claim that they
are not liable for the acts of Martin that done
without his authority,
Martin will be held liable to his employer Company
for any of the acts done by him. Martin has done
breach of agency law when he planned to set up a
similar type of business.

Part B