RMIT Business and Corporation Law Assignment: Legal Issues Analysis

This assignment delves into two key areas of business and corporation law: negligence and contract law. The first part analyzes a scenario where Sandy, providing investment advice, is assessed for potential negligence towards Susie. The analysis explores duty of care, breach of duty, causation, and remoteness of harm, referencing relevant case law such as Bourhill v Young and Rogers v Whitaker, and considering contributory negligence. The second part examines a contract law case between a couple and a motorhome company, Catapult. It assesses issues of misrepresentation, breach of contract, and the damages Joan and Henry are entitled to recover. The analysis focuses on whether statements made by a sales representative constituted contractual terms, applying cases like Dick Bentley Production v Harold Smith Motors and Baldry v Marshall, and exploring remedies under the Wrongs Act 1958. The assignment provides a comprehensive overview of the legal issues and potential outcomes in both scenarios.

RUNNING HEAD: BUSINESS AND CORPORATION LAW
Business and Corporation Law (1950)

BUSINESS AND CORPORATION LAW
Memorandum
To: Sandy Robinson
From: Bus Corpseter
Date: (######)
File: (######)
Subject: Advice relating to legal implication of negligence and possible defences that are
available to Sandy.
The main issue in the given instance is whether the whether Sandy owned duty of care
towards Susie.
In order to shown case under negligence plaintiff is required to establish that defendant
owned duty of care towards him and an individual provided its services.1 As in the case of
Bourhill v Young2, it was determined by the court that respondent had not owned duty of care
towards plaintiff as plaintiff failed to show the rule of proximity applied in this case. In cases
where the declaration taken was neither facts nor law, but only overall guidance or view, the
purpose and accessibility of information with the adviser determines his / her responsibility.
In the given case study, Susie asked for advice from Sandy regarding investment in Quantize
Comps Ltd whereas Sandy rendered his advice on Quick Corp Ltd. As applying, the rule of
relationship of proximity, Sandy and Susie was in relationship of proximity as she asked her
in friendly capacity. As applying the case of Bourhill v Young, Sandy owe duty of care
towards Susie, as there was relationship of propinquity between them.
Thus from the above it can be concluded that Sandy owed obligation of care towards Susie as
he give advice in friendly capacity and Susie relied on such advice.
1 Pamela Stewart and Anita Stuhmcke, Australian Principles of Tort Law (Federation Press, 2017) 722
2 (1943) AC 92
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The main problem in the given scenario is whether Sandy has breached the duty of care,
which he owned to Susie.
Once it is shown that defendant owned duty of care towards plaintiff the next thing that
required to be established is that the defendant breached his duty.3 If the defendant as
required by law fails to meet the standard of care, in negligence the breach of duty of care
may be found to exist.4 In the case of Rogers’s v Whitaker5, it was held by the court that every
patient should be told about every material risk intrinsic in the treatment. A material danger is
one to which a prudent person is probable to attach importance in the situation of the patient.
In the given scenario, Sandy breached his duty of care, which he owed against the Susie.
Sandy failed to meet the standard of care as Susie acted on such advice and invested her
money in the company. As applying the case of Rogers v Whitaker, Sandy could be held
liable under the negligence as he breached his duty of care by advising Susie as well as he
was under obligation to provide her the right information regarding the company.
Thus, it can be concluded that Sandy breached his duty of care.
The main problem in the given scenario is to identify did the breach of the duty by Sandy
caused Susie to suffer loss or damage.
In order to show causation under negligence, the injured person must prove that they
agonized by the loss that was due to careless act of the defendant.6 In the case of Howard
Marine v Ogden7 , it was held by the court that if a person cannot have right and precise
information about something, he/ she could think in the information that is accessible to him/
her.
In the given scenario, Susie relied on the advice given to her by Sandy. She invested in the
company and suffered loss. Susie can easily show that she suffered economic loss due to such
advice. As applying the case of Howard Marine v Ogden, Sandy had believed about a
different company and rendered his advice on such basis, in the given situation he had
3 Mark Lunney, A History of Australian Tort Law (Cambridge University Press, 2017) 308
4 Amanda Stickley. Australian Torts Law (LexisNexis Butterworths, 2013) 681
5 (1992) HCA 58
6 Kisrty Horsey and Erika Rackley, Tort Law (OUP Oxford, 2013) 618
7 (1978) QB 574
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BUSINESS AND CORPORATION LAW
knowledge in the same field, he would be aware about the circumstances and must have had
confirmed about the company in which Susie was going to invest.
Thus, it can be concluded that Susie incurred losses by relying on the advice given to her by
Sandy.
The main concern in the instant situation is whether the damages suffered by the Susie was
reasonable foreseeable.
Remoteness of the harm refers to the necessity that the harm must be in a foreseeable nature.8
In the event of negligence allegations, once the applicant has developed that the respondent
gives them an obligation of care and is in violation of that obligation that triggered harm, they
must also show that the harm was not too remote.9 But in negligence the defendant in order to
establish his defence can show that plaintiff contributed in the negligence. The plaintiff was
did not take proper care in the circumstance for their own safety.10
In the given scenario, Susie suffered financial loss by investing in company on the advice of
Sandy. Sandy is responsible for losses that were a direct consequence of his breach of
obligation. The risk was foreseeable in the given case study.
Whereas the Sandy can show that Susie contributed in loss suffered by her by not stating the
name of the company and before investing she did not take proper care in the circumstance
that Sandy was recovering from serious injuries and was taking medication.
It can conclude that Sandy can be held liable under negligence. Whereas Susie can be held
liable for contributory negligence made due to not taking proper care before relying on advice
of Sandy.
Thus, it is advised to Sandy to pay $ 67683 to Susie in order to avoid litigation because a
possible case can be made against him under negligence.
8 Rosalie P. Balkin and J.L.R. Davis, Law of Torts (LexisNexis Butterworths, 2013) 886
9 Tim Paine, LexisNexis Questions and Answer: Torts (LexisNexis Butterworths, 2015)
10 Patty Kamvounias, Sally Varnham and Joan Squelch, Higher Education and the Law (Federation Press, 2015)
259
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(A)
The main problem in the given situation is whether Joan and Henry are entitled to cancel the
contract with Catapult.
Contract has a binding effect once it is established.11 Whoever does not fulfil its parts of
agreement; the other party is entitled to treat the agreement as infringed and may request
damages or specific performance. Declaration made during the contracts could amount to a
contractual term or representations. If the statement amounts to an unfulfilled, contract term,
the other party may sue on account of breach of contract. A misrepresentation action can be
taken by the innocent party if the statement is merely a false depiction. As in the case of Dick
Bentley Production v Harold Smith Motors12, it was determined by the court that the
claimant’s statement was a contractual term. They discovered that since the respondent had
more understanding on the subject matter of their expertise, as a four-wheeler dealer, the
applicant was relatively permitted to rely on their portrayal.
As in the case of Baldry v Marshall13, it was determined by the court that the suitability of the
car for travel reasons was situation as it was so vital that inability to fulfil defeated the very
purpose of purchasing the car. It was established that the complainant was entitled to return
the car and regain the costs incurred.
Once it is shown that there was a false depiction as to the terms of the contract one can elect
to end the contract or can treat it as discharge by breach of contract. One of the circumstances
in which an agreement can be discharged is repudiator breach of contract. In this type of
breach of contract, either the condition is breached (as opposed to warranty) or there is
adequately serious breach of transitional term. Only if the term is infringed qualifies as a
situation i.e. an essential term, the innocent party will be discharged from future performance
of the agreement. If the term is a condition, the aggrieved party will be allowed to terminate
the agreement, regardless of how the minor the implications of the breach may be.
11 Warren Swain and David Campbell, Reimagining Contract Law Pedagogy: A New Agenda for Teaching
(Routledge, 2019) 236
12 (1965) 1 WLR 623
13 (1925) 1 KB 260
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Apart from the common law, damages are also awarded under the Wrongs Act 1958. As per
this act, damages are awarded for past or future monetary loss.14
In the given scenario, there was valid contract between the couple and the Catapult, thus, it
has binding effect. The depiction made by the sales representative of Catapult named Mark,
during the agreement amounted to contractual terms of the agreement. The couple can sue the
Catapult for breach of contract on account of the unfulfilled contract term made by Mark. The
couple are entitled to sue the Catapult because the statement made by the Mark was merely a
false depiction. The couple wanted an off road motorhome with minimal fuel expenses.
Whereas Mark misleads the couple by stating that Grand Terrain was best value for money
motorhome that can be used on off road. Thus, Mark made false depiction in order to enter
into contract with the couple.
As applying the case of Dick Bentley Production v Harold Smith Motors, Mark’s statement
was a contractual term. He had more understanding on the subject matter of his expertise, as a
motorhome dealer, the couple relied on his portrayal an invested in motorhome which was in
fact the one of the most expensive motorhomes and was only suitable for limited unsealed
road usage and not the off road that resulted in loss to them.
Whereas while applying the case of Baldry v Marshall, the couple wanted a motorhome,
which was suitable for off road purposes and cost effective, this was an essential condition
and it was so vital that inability to fulfil defeated the very purpose of purchasing the
motorhome. Thus as applying the instant case, the couple is entitled to return the car and
regain the costs incurred.
Once it is shown by the couple that there was false depiction by Mark as to the conditions of
the contract they can elect to end the contract or can treat it as breach of contract. In the given
scenario, there is a repudiator breach of contract as the essential condition was breached by
the Catapult as well as breach of transitional term. Such depiction of the Mark entitles the
couple to end the contract.
Apart from this, the plaintiff can claim damages under the Wrong Acts for the economic loss.
14 Wrongs Act 1958 s 28F
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Thus, it can be concluded from the above that false statement made by Mark gave right to the
couple to treat the contract as breached or to terminate the contract. The couple can file a suit
for false misrepresentation and for the loss caused to them by such misrepresentation.
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(B)
The main problem in the given situation is what damages Joan and Henry are entitled to
recover from Catapult.
Once it is shown that there was breach of contract the another party has right to claim for
damages. The available remedy for breach of contract is compensations in common law.15 It
is an award in cash in order to compensate the aggrieved party.16 The major aim of the
damages under common law is to put the aggrieved party in the position in which the contract
would have been executed. In contract law, there are distinct heads of harm under which a
sum may be asserted to represent distinct kinds of failure. These include contract loss, loss of
dependence, pain or frustration, inconvenience, potential opportunities diminishing,
speculative damage and liquidated damage. In the case of Angila Television v Reed17, it was
held by the court that while damages usually try to place the parties in the situation in which
they would have been if the agreement had been executed, the parties might opt to assert loss
of dependence and recover costs earned in an abortive transaction. Thus, Anglia was prepared
to retrieve the defendant's costs.
In the case of Jarvis v Swan Tours18, it was determined by the court that where an agreement
is entered into for the purpose of providing enjoyment or leisure, damages may be granted for
the disappointment, anguish, upset and frustration induced by a breach of agreement in the
absence of enjoyment or entertainment.
In the case of Baltic Shipping v Dillion19, it was held by the court that damages to frustration
and distress could only be restored if it results from physical trouble induced by the breach or
if the purpose of the agreement is to deliver pleasure or relief or to discourage molestation.
Furthermore, the court stated that damage induced by the disappointed and distress cannot be
recovered unless it is due to physical problem caused by the violation or unless the agreement
is intended to provide enjoyment, relaxation, or liberty from molestation.
15 Gregory J. Tolhurst, The Assignment of Contractual Rights (Bloomsbury Publishing, 2016) 544
16 Wim Decock, Theologians and Contract Law: The Moral Transformation of the Ius Commune (Martinus
Nijhoff Publishers, 2013) 724
17 (1971) 3 All ER 690
18 (1972) 3 WLR 945
19 (1993) 176 CLR 344
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BUSINESS AND CORPORATION LAW
In the given scenario, there was a breach of contract by the Catapult that gave right to claim
for damages. In the given scenario, the available remedy for breach of contract is damages,
which can be claimed by the aggrieved party. In the given case study, Joan and Henry
suffered loss and incurred expenses as well as the couple were stuck in a rut while off road.
As applying the case of Angila Television v Reed, the couple can opt to assert loss of
dependence and recover the costs earned in an abortive transaction. Thus, the couple is
entitled to claim for damages from the Catapult.
As applying the case of Jarvis v Swan tours, there was an agreement between the couple and
the Catapult to enter into for the purpose of providing enjoyment and cost effective
motorhome, damages may be granted to them for the disappointment, anguish, ridicule
induced by the breach of agreement in the absence of enjoyment or cost incurred for the
repairing and staying at the local motel.
Whereas while applying the case of Baltic Shipping v Dillion, the damages can be obtained
because it resulted into, physical inconvenience induced by such breach and the purpose of
the couple was to purchase a motorhome with off road capabilities and low fuel
consumption.in the given scenario the damages can easily be claimed because disappointment
and distress was caused due to physical inconvenience due to breach.
From the above it can be concluded that the very purpose of the couple of purchasing
motorhome was not fulfilled rather than it resulted in distress and disappointment, which give
rise to breach of the essential term of the contract. Thus, the couple is entitled to recover
repudiated damages from the Catapult.
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(C)
The main problem in the given situation is whether the couple is able to recover the $ 5700
deposit paid to the Catapult for the trailer.
The conditions of the agreement are those conditions, which the law indicates in the
agreement, nevertheless the reality that they have not been deliberated by the parties or
referred to it in the agreement.20 They may be meant by contract law or by legislation. Under
contract law conditions, it is usually implied that the intention of the parties must be given
complete impact.21 In some instances, judges will ask if the parties would have explicitly
approved to the conditions if they had regarded the problem when they entered into their
agreement (ad hoc implied conditions). In some instances, the courts will imply ordinary
terms without having to investigate the parties actual intent (standard terms implied).
Contract law may indicate conditions depending on the parties’ actual or presumed intent.
Such conditions may be vital for the efficiency of an agreement, may lead from a course of
company or may result from custom or commercial use.22
An oral or implied contract has a binding effect like written contract.23 Once the valid
contract is formed, both the parties become bound by the conditions of an agreement. Both
the parties to contract are under obligation to perform their part of promises and if any one of
them fails to do so the other party has right to treat it as breach of contract. In the case of
Associated Newspaper Ltd v Bancks24, it was determined by the court that whether a phrase in
an agreement was a condition entitling the non-infringing party to terminate in case of
infringement.
In the given scenario, a valid contract was made between the couple and the Catapult as the
couple asked for the trailer from Mark. Mark mentioned the price for the trailer which was
agreed by the couple, thus there was a valid offer and acceptance followed by the
consideration paid by the couple. There was a valid verbal agreement between the couple and
the Catapult. The conditions relating to the delivery was discussed with the couple as well as
the couple expressly agreed to the term of the agreement. The contract formed among the
parties has a binding effect thus both the parties are bound by the terms of the contract. As
20 John W. Carter, Cases and Materials on Contract Law in Australia (LexisNexis Butterworths, 2011) 1065
21 Samantha Hepburn, Principles of Equity & Trusts (Aus) 2/e (Routledge, 2013) 478
22 Elizabeth Ellis, Principles and Practice of Australian Law (Thomson Reuters, 2012) 305
23 John W. Carter, Carter’s Guide to Australian Contract Law (LexisNexis Butterworths, 2011) 634
24 (1951) 83 CLR 322
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BUSINESS AND CORPORATION LAW
applying the case of Associated Newspaper Ltd v Bancks, as there was valid agreement
between the couple and Catapult, therefore couple cannot terminate the contract based on the
previous bad experience.
Thus from the above it can be concluded that since there was a valid agreement between the
parties one cannot terminate the contract and ask for return due to previous bad experience as
it was not essential condition mentioned in the contract. Therefore, the couple is not entitled
to recover the $5700 deposit paid to the Catapult for the trailer.
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Bibliography
A- Books/Article/Journals
Balkin, Rosalie P. and J.L.R. Davis, Law of Torts (LexisNexis Butterworths, 2013) 886
Carter, John W., Cases and Materials on Contract Law in Australia (LexisNexis
Butterworths, 2011) 1065
Decock, Wim, Theologians and Contract Law: The Moral Transformation of the Ius
Commune (Martinus Nijhoff Publishers, 2013) 724
Ellis, Elizabeth, Principles and Practice of Australian Law (Thomson Reuters, 2012) 305
Hepburn, Samantha Principles of Equity & Trusts (Aus) 2/e (Routledge, 2013) 478
Horsey, Kisrty and Erika Rackley, Tort Law (OUP Oxford, 2013) 618
John W. Carter, Carter’s Guide to Australian Contract Law (LexisNexis Butterworths, 2011)
634
Lunney, Mark, A History of Australian Tort Law (Cambridge University Press, 2017) 308
Paine, Tim, LexisNexis Questions and Answer: Torts (LexisNexis Butterworths, 2015)
Patty Kamvounias, Sally Varnham and Joan Squelch, Higher Education and the Law
(Federation Press, 2015) 259
Stewart, Pamela and Anita Stuhmcke, Australian Principles of Tort Law (Federation Press,
2017) 722
Stickley, Amanda, Australian Torts Law (LexisNexis Butterworths, 2013) 681
Swain, Warren and David Campbell, Reimagining Contract Law Pedagogy: A New Agenda
for Teaching (Routledge, 2019) 236
Tolhurst, Gregory J. The Assignment of Contractual Rights (Bloomsbury Publishing, 2016)
544
B- Legislations
Wrongs Act 1958 s 28F
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C- Cases
Angila Television v Reed(1971) 3 All ER 690
Associated Newspaper Ltd v Bancks (1951) 83 CLR 322
Baldry v Marshall (1925) 1 KB 260
Baltic Shipping v Dillion(1993) 176 CLR 344
Bourhill v Young (1943) AC 92
Dick Bentley Production v Harold Smith Motors(1965) 1 WLR 623
Howard Marine v Ogden(1978) QB 574
Jarvis v Swan Tours (1972) 3 WLR 945
Rogers v Whitaker(1992) HCA 58
12