BLW17 Business Law Assignment: Case Study of Peking Duck Restaurant

This assignment is a detailed analysis of a business law case study involving the Peking Duck Restaurant. The student explores various legal aspects, including the formation of a partnership between the owner, Alan, and a lender, Bing, examining the application of the Partnership Act 1891 (SA), and the implications of their actions. The analysis delves into the concept of implied and apparent authority concerning Bing's actions on behalf of the restaurant, particularly the purchase of furniture. The assignment also addresses employment law, analyzing the legal status of an employee, Sarah, and her entitlement to workers' compensation following a workplace injury. Furthermore, the assignment discusses the breach of contract by an employee, Tully, who shared the restaurant's trade secrets, specifically its special recipes. The assignment concludes by examining the restaurant's rights to terminate Tully's contract and seek damages for the loss of income caused by her actions. Case laws like Smith v Anderson (1880), Re Griffin; Ex parte Board of Trade (1890), Ponce v DJT Staff Management Services Pty Ltd [2010], and Stephen v Avery [1988] are used to support the legal arguments.

SCHOOL OF LAW
BLW17 Business Law
ASSIGNMENT COVER SHEET
First Family Student ID
Student’s Name:
James Keays
ASSESSMENT - CASE 1 -
Word length required 1,500 words Actual word length
Due date: FRIDAY 6TH October 2017 12.00 NOON
`
I declare that the work contained in this assignment is my own, except where
acknowledgement of sources is made. I authorise the University to test any work
submitted by me, using text comparison software, for instances of plagiarism. I
understand this may involve the University or its contractor copying my work and
storing it on a database to be used in future to test work submitted by others. I
understand that I can obtain further information on this matter at:
http://www.unisanet.unisa.edu.au/learningconnection/student/studying/integrity.asp
Note: The attachment of this statement on any electronically submitted assignments will
be deemed to have the same authority as a signed statement
Signed: Date:

Type your answers here (Use minimum 11 point font and double line spacing)
Q1)
According to the partnership act 1891 (SA), ‘a partnership may be formed expressly
or impliedly’. What was the intention of the parties? Did they share profits and
losses? Have both parties had a voice in management? Is there continuity in trading
activities? In the case study Peking Duck Restaurant, the owner Alan and lender
Bing, have failed to communicate effectively and correctly to clearly outline the
terms, nature and authority of their deal. Although a deal has been struck, the
contract is extremely vague, creating issues regarding ownership. The contract
states that the lender, Bing, will receive a 40% share of profits and losses. This
means there was a relationship formed with a view for profit. This, as well as, already
having a private friendship shows a level of fiduciary.
The contract also states that ‘the lender has the right to any major decisions
regarding the business’. When Alan and Bing both agree that the way to improve
trade is to refurnish the restaurant, they are effectively showing they are making joint
decisions, to enhance profits and increase sales. According to the ‘partnership act
1891’, this means Bing has a voice in management, a key indicator to a partnership.
When Alan and Bing decide to purchase furniture with the money Bing has provided,
they now have common ownership of property according to the partnership act 1891.
A partnership indicator is a continuity and repetition of trade. With Bing spending
considerable time at the restaurant, suppliers have come to know him as a partner.
This means according to the ‘partnership act’ they have been dealing with him
continuously and repetitively. The sharing of profits and losses, having a voice in
management repetition of trading activities, common ownership and having a

common view to profit are all direct legal indicators that Alan and Bing are in a legally
binding partnership.
Using the doctrine of precedence
Smith v Anderson (1880) 15 Ch D 247 at 273
The conduct carried out between these parties, in both case studies, clearly show a
partnership has been formed. With Bing spending considerable time at the
restaurant and their agreement on refurnishing the restaurant, their conduct towards
each other is civil and professional. A partnership indicator.
Their failures here are not drawing up a clear contract, stating terms, authority,
duties and obligations and dispute resolutions.
Q2)
Agreeing to partnership means that each partner can be actively acting on behalf of
the other partner as well as their own. Bing purchasing the leather chairs is a case of
working on behalf of Alan while he is away on holiday. Alan has shown a level of
fiduciary towards Bing when he agreed to go into partnership together. As the chairs

are produced for the beneficiary of the restaurant that they co-own, using business
funds is appropriate and acceptable.
While Alan is away, Bing can act as an agent on Alans behalf and has implied
authority. This means Bing can buy and sell on behalf of the partnership. This allows
Bing to purchase the chairs without having to consult Alan beforehand.
A partnership allows all partners to have apparent authority to act on behalf of the
others. This means that ‘partners will be liable for the actions of another partner
relating to the partnership business- including debts occurred. Bing has used his
apparent authority to purchase the chairs as he has purchased them for restaurant.
He has not personally profited from his position, nor is it a conflict of interest. Bing
does have an obligation to notify Alan of any activities that affect the business which
he has failed to do so until Alan returned from holiday.
While there has been a communication break down while Alan has been on holiday,
Bings use of implied authority and apparent authority allows him to act as an agent
on Alans behalf and therefore Peking Duck Restaurant is liable for the expense of
the chairs.
Case law
Re Griffin; Ex parte Board of Trade (1890) 60 LJQB 235 at 237

Q3
What is the legal determination of what constitutes an employee? An employee is
defined as a person who is hired by an employer to perform a service. Although

Sarah is a uni student and only works when she is available (casual) and she is hired
to complete a service for Peking Duck Restaurant. Sarah has been receiving a wage
of 150$ a day. If this is paid directly to Sarah without her having to invoice Peking
Duck Restaurant seeking debts owed for services, then this is a clear legal indication
that she is an employee, not a contractor. When an employee, or a contractor, is
conducting services in a workplace, it is the workplaces responsibility to provide a
safe place of work. This would involve placing controls into the work area to protect
employees from harm and risk. Controls such as documentation, stating safe work
practices, hazard analysis and permits should be in place to assist employees in
understanding what safety measures and work practises are required. The injury
Sarah received during work hours and while being an employee, entitles her to
workers compensation. Workers compensation legislation states that compensation
and rehabilitation will be provided to an employee who has suffered a work-related
injury. Sarah’s broken arm was suffered at work, whilst working and in work hours.
As an employee, who receives wages from Peking Duck Restaurant, she should
receive compensation and rehabilitation. Peking Duck Restaurant must have
workers compensation insurance that covers their employees, according to the
workers compensation and rehabilitation act 1986. The restaurant was negligent in
providing a safe work place by not cleaning up the spill or putting up signage
regarding the wet floor to notify people of the hazard. Therefore, the restaurant will
be required to pay for Sarah’s loss of wages and medical bills until she is fit to return
to work.
(INSERT SIMILAR CASE)
Ponce v DJT Staff Management Services Pty Ltd [2010] FWA 2078

Q4
Tully is a Peking Duck Restaurant employee on a regular employment contract. As
an employee of the restaurant, Tully has a legal obligation to ‘faithfully and
obediently carry out tasks assigned to them. She must not disclose the employers
trade secrets and other information. Tully sharing the restaurants special recipes is a
clear breach of her contract and against the law. She must not help her employers’
competitors nor take advantage of information for personal benefit. Considering
there is evidence to show there has been a decline in customers since this has
happened, then Peking Duck Restaurant have every right to terminate her contract.
This is on the grounds of a breach of confidence. They may terminate her contract,
without notice, due to this breach of contract. Peking Ducks special recipe is a trade
secret and requires the strictest confidence to be kept. The restaurants evidence of
disloyalty, must be clear and concise about the specific special recipe and not
general and vague. There must be evidence that the special recipe is now being
used by its competitors for their advantage and clear evidence that that recipe was
provided by Tully from Peking Duck. If this is in direct correlation with a change in
customer number then Peking Duck Restaurant can terminate Tully’s employment
immediately and sue her for loss of income and damages. Tully will then be required
to pay these damages to Peking Duck to the amount of the losses acquired during
that period. She may also receive a fine.
Case law
Stephen v Avery [1988] Ch 449

List your references here
http://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1332&context=blr
A SUBMISSION TO THE AUSTRALIAN PARLIAMENT TROJAN HORSE CLAUSES: INVESTOR-STATE
DISPUTE SETTLEMENT DR MATTHEW RIMMER AUSTRALIAN RESEARCH COUNCIL FUTURE FELLOW
ASSOCIATE PROFESSOR THE AUSTRALIAN NATIONAL UNIVERSITY COLLEGE OF LAW The Australian
National University College of Law, Canberra, ACT, 0200
https://www.worksafe.qld.gov.au/forms-and-resources/case-studies
Kiel, G, Kolsen, HT & Smith, C . (2000). Investigating the Economic Cost of Injury in the
Workplace: A Case Study Approach. The Economic and Labour Relations Review, 11 (1), 108-
135.

Assessment feedback
School of Law
BUSINESS LAW (BLW 17)
The Course Objectives and Graduate Qualities being assessed by this assignment are:
GQ1. GQ2. GQ3. GQ4. GQ5. GQ6
Name:
Key components of this assignment Comments

1. Content
 Have the topics been addressed critically and with sufficient
depth?
 Are all of the key issues addressed?
2. Structure
 Is the body of the answer well-structured with key points
presented in a logical sequence?
 Is the conclusion justified?
3. Language and presentation
 Has it been written well?
 Has it been spell checked?
4. Referencing
 Are the references (where needed) adequate?
 Are quotations (where needed) referenced appropriately?
Grades
Q1
Q2
Q3
Q4
Final grade:
Comments generally (in addition to comments within) Marker’s signature