Business Law Assignment: Problem Questions and ILAC Method Solutions

This document presents solutions to two problem questions from a Business Law assignment, adhering to the ILAC (Issue, Law, Application, Conclusion) method. The first question examines a breach of contract involving a restraint of trade clause in an employment contract, considering the Corporations Act 2001 and relevant case law. It analyzes David's potential liability for breach of contract and the non-repayment of a loan, emphasizing the factor of reasonableness. The second question delves into a partnership dispute, evaluating whether a partnership agreement was breached by Jane and Sarah, potentially victimizing Anne and Mary. The solution considers partnership law, breach of contract, and medical ethics, referencing relevant case laws and the application of Australian partnership law. The analysis considers the objectives of the partnership, the potential for conflict of interest, and the implications of exceeding authority within the partnership. The document provides a detailed breakdown of the legal issues, rules, applications, and conclusions for each question, offering a comprehensive understanding of the legal principles involved.

Running head: BUSINESS LAW 1
Business Law

BUSINESS LAW 2
Table of Contents
Answer to Question 1.................................................................................................................3
Issue........................................................................................................................................3
Rule........................................................................................................................................3
Application.............................................................................................................................3
Conclusion..............................................................................................................................4
Answer to Question 1.................................................................................................................4
Issue........................................................................................................................................4
Rule........................................................................................................................................4
Application.............................................................................................................................5
Conclusion..............................................................................................................................6
References..................................................................................................................................7

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Answer to Question 1
Issue
The main issues pertaining to the facts of the case imply whether David is liable for
the breach of contract and the non-repayment of loan granted to Martha by Standard bank
Limited.
Rule
The rules pertaining to breach of contract would apply along with the relevant
provisions of the Corporations Act of 2001 accordingly wherever relevant. With regard to
breach of contract as inferred and observed form the facts of the case, the aspect pertaining to
the restraint of trade clause would be applicable accordingly as far as non-solicitation of
business for a certain period of time is concerned.
Application
The time frame in relation to the clause pertaining to the restraint of trade must be
taken in to consideration. It would help in the determination of the aspect pertaining to the
breach of the work contract formed between David and Nu Shampoo Pty Limited thereby
setting out the terms and conditions of employment for David accordingly. No action is to be
undertaken by Nu Shampoo Pty Limited against David if it is observed form the work
contract formed between David and Nu Shampoo Pty Limited that the time has already
elapsed with regard to the restrained of trade clause. As a result, it would help David to
prepare his defence accordingly (Brendel Mathews, 2018). However, if it is identified and
determined that David had floated Hair Glow Limited prior to the end of the period stipulated
in the clause relating to the restraint of trade in the work contract formed between David and
Nu Shampoo Pty Limited, he would be liable for breach of contract thereby resulting in the
stringent action to be undertaken by Nu Shampoo Pty Limited against David accordingly as
per the work contract (Argenbright Rioux, 2016). It is to be seen whether Nu Shampoo Pty
Limited is in direct competition with Hair Glow Limited as far as the aspects pertaining to
competing business and non-solicitation are concerned accordingly with regard to the
restraint of trade clause in the work contract formed between David and Nu Shampoo Pty
Limited taking account of the factor pertaining to time. If it is detected and found that both
Nu Shampoo Pty Limited and Hair Glow Limited are in fierce competition with each other
and the time period has not elapsed, then the proceedings pertaining to blatant breach of
contract may be initiated against David by Nu Shampoo Pty Limited. The aspect pertaining to
reasonableness must be taken into account in order to validate the clause relating to restraint
of trade (Nicandri, 2010). If it is observed that there is no rationale behind the clause
pertaining to restraint of trade imposed upon David by Nu Shampoo Pty Limited with regard
to the work contract, then such a clause would not be executed and enforced and be declared
as invalid in the interest of equality and fairness as far as the aspects pertaining to natural
justice is concerned with regard to the providing of a comprehensive solution to David
accordingly. Additionally, it is also to be seen whether the clause relating to the restraint of
trade contains the aspect of confidentiality as far as the disclosure of information about

BUSINESS LAW 4
employees and customers of Nu Shampoo Pty Limited is concerned. In this aspect also, the
factor concerning time would be taken into account. As far as the aspect pertaining to
reasonableness is concerned, the employer has to imply that there is an interest in such a
restraint of trade accordingly. As a result, Nu Shampoo Pty Limited must have a proper
interest with regard to the restraint of trade clause in the contract between David and Nu
Shampoo Pty Limited (Piper & Ruda, 2018). In the case of Just Group Pty Limited v Nicole
Peck, Just Group Pty Limited imposed a restriction over its Chief Financial officer with
regard to working for Cotton On Group Services Pty Limited, one of the rival companies of
Just Group Pty Limited. In this case, it was held by the Supreme Court of Victoria that such a
clause pertaining to restraint of trade was unreasonable in nature since the aspect of the
clause in relation to restraint of trade was in excess of the legitimate interests of Just Group
Pty Limited. As a result, it is extremely essential to determine whether the legitimate
interests of Nu Shampoo Pty Limited are in compliance with the restraint of trade clause in
the contract between Nu Shampoo Pty Limited and David as far as the aspect pertaining to
reasonability is concerned. If it is identified and determined that the interests of Nu Shampoo
Pty Limited are in excess, then it is to be made sure that the clause pertaining to the restraint
of trade must be declared invalid accordingly as far as the providing of a comprehensive
solution to David is concerned taking account of the facts of the case. As far as the repayment
of loan is concerned, Monica would be solely responsible as she was the one who took a loan
from Standard Bank Ltd. If it is detected and identified accordingly that David is the
guarantor with regard to the repayment of loan, he would be responsible for the same failing
which Standard Bank Ltd would initiate proceedings accordingly with regard to the offences
pertaining to default in the repayment of loan since there is no security attached to the loan.
Conclusion
It is observed form the facts of the case in the light of the cited case law that the
aspect related to reasonableness has to be taken into consideration with regard to the breach
of the work contract by David in terms of the formation and incorporation of Hair Glow
Limited after leaving Nu Shampoo Pty Limited. The aspect related to liabilities imposed by
Standard Bank Ltd on grounds of non-repayment of loan has to be taken into consideration as
far as David is concerned since the loan is granted to her sister Monica.
Answer to Question 1
Issue
The main legal issue pertaining to the facts of the case implies that whether there has
been a breach of the partnership on part of Jane and Sarah as far as the partnership agreement
pertaining to the modus operandi of the clinic Your Local Doctor is concerned thereby Anne
and Mary being victimized accordingly.
Rule
The law of partnership would be taken into account along with the aspect related to
breach of contract in addition to the medical ethics with regard to the modus operandi of a

BUSINESS LAW 5
clinic on a partnership basis accordingly as far as the laws pertaining to health care are
concerned. It may imply medical jurisprudence accordingly.
Application
Since it is imperative form the facts of the case that Anne, Mary Jane and Sarah have
the common objective of providing comprehensive solution to the patients as far as
healthcare in an effective and efficient manner is concerned, such an agreement formed on
the basis of partnership is valid (Berry, 2019). If they disagree with each other on various
aspects, the concept pertaining to the dissolution of a firm formed on the basis of partnership
would be applicable accordingly as far as the liquidation of the clinic Your Local Doctor is
concerned. Since different states and territories of Australia have their own laws pertaining to
partnership, the law of the respective state or territory would be applicable accordingly as far
as the partnership agreement in relation to the proper and appropriate functioning of the clinic
Your Local Doctor. With reference to Section 115 of the Corporations Act of 2001, the clinic
Your Local Doctor is not under any kind of obligation as far as incorporating itself is
concerned since the number of partners is less than twenty. Additionally, one of the main
objectives of an organisation formed on the basis of partnership is to generate profits and
revenues in the desired manner as far as the welfare and up gradation of the partnership firm
is concerned (Allen & Kraakman, 2016). As a result, if it is identified and determined that
the acts of Jane and Sarah pertaining to the entering into contracts in excess of ten thousand
dollars would benefit the clinic Your Local Doctor to a considerable extent, then they are not
in breach of the partnership agreement and as a result, should not be held liable provided that
the ethics pertaining to the profession of medicine and health care are complied with
accordingly as far as the treatment of patients in a proper and appropriate manner is
concerned thereby catering to their needs in an effective and efficient manner. Any agreement
formed on the basis of Joint Venture should be treated as a partnership agreement thereby
implying that all Joint Venture agreements are partnership agreements as far as the activities
of the business are concerned with regard to the join entrepreneurialism of the partners
involved in the modus operandi of the business. As a result, it is inferred form the facts of the
case that the clinic Your Local Doctor has the characteristics in relation to a Joint Venture as
far as the activities of the partners Anne, Mary Jane and Sarah are concerned. The health and
safety of the patients and the staff would also play the key role in the determination of the
beneficial aspects pertaining to the modus operandi of the clinic Your Local Doctor in the
desired manner as far as its possibilities pertaining to growth and progress is concerned in
accordance with the respective applicable legislation of partnership. In the case of Christie v
Harcourt, the aspect pertaining to the concept of partnership was the conflict of interests amongst
the partners as far as the modus operandi of the agency is concerned. In this case, it was held by
the High Court of New Zealand that there should be no conflict of interest amongst the partners
as it would eventually lead to the detrimental effect over the organization formed on the basis of
partnership. Such an aspect is also implied by the principles of common law of England and
Wales as far as the law of agency pertaining to a contract is concerned. The facts of the case
imply that there are conflicts of interest amongst the partners as far as the clinic Your Local
Doctor are concerned (Koh, P., & Bull, 2016). As a result, the common law of agency would
be taken into account along with the decision made by the High Court of New Zealand in the

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case of Christie v Harcourt as aforesaid. In the case of Bentley v Craven, it was held by the Civil
Division of the Court of Appeal of England and Wales that the profits must not be made by a
partner in a secret manner as far as personal benefits and interests are concerned. Similar kind of
approach was undertaken by the High Court of Australia in the case of Birtchnell v Equity
Trustee, Executors & Agency Co. As a result, if it is imperative that Jane and Sarah made profits
out of the modus operandi of the clinic Your Local Doctor they would be in gross
contravention of the principles pertaining to the common law of agency as far as partnership
is concerned.
Conclusion
In the light of the facts of the case pertaining to the issues along with the case laws cited and
the relevant provisions of the respective legislations taken into account, it is imperative that
the partnership agreement has been breached by Jane and Sarah thereby resulting in the
victimization of Anne and Mary accordingly. As a result, it is imperative that proceedings
must be initiated accordingly against Jane and Sarah as far as the claiming of compensation
by Anne and Mary in the form of damages are concerned with regard to the acting in
contravention of a contract.

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References
Allen, W. T., & Kraakman, R. (2016). Commentaries and cases on the law of business
organization. Wolters Kluwer law & business.
Argenbright Rioux, R. (2017). The Necessity for Employer Liability in Unenforceable Non-
Compete Agreements. UMKC L. Rev., 86, 995.
Berry, E. (2019). Limited partnership law and private equity: an instance of legislative
capture?. Journal of Corporate Law Studies, 19(1), 105-135.
Brendel Mathews, E. (2018). Forbidden Friending: A Framework for Assessing the
Reasonableness of Nonsolicitation Agreements and Determining What Constitutes a
Breach on Social Media. Fordham L. Rev., 87, 1217.
Koh, P., & Bull, S. (2016). Agency and partnership law. SAL Ann. Rev., 76.
Nicandri, A. S. (2010). The growing disfavor of non-compete agreements in the new
economy and alternative approaches for protecting employers' proprietary information
and trade secrets. U. Pa. J. Bus. L., 13, 1003.
Piper, J. M., & Ruda, E. (2018). Employee" No-Poaching" Clauses in Franchise Agreements:
An Assessment in Light of Recent Developments. Franchise Law Journal, 38(2),
185-205.