Law of Business Obligations Assignment: ACTY5320, Semester 2, 2019

This document presents a solution to a Law of Business Obligations assignment, specifically for ACTY5320 in Semester 2, 2019. The assignment addresses two key questions involving legal scenarios. Question 4 examines a negligence claim by International Resources Ltd (IRL) against Cautious Accounting, analyzing the elements of negligence and applying relevant case law like Sherwin Chan & Walshe Limited (In Liquidation) & Another v/s Sir Robert Jones & Another [2012]. Question 5 explores two issues: Amelia's potential action against James and Betty's potential action against James, concerning breach of contract and fraud, using the case Bird v Bicknell [1987] and the Contractual Remedies Act 1979 to determine the validity of an exclusion clause and the potential for court-ordered remedies. The solution provides issue identification, relevant law, application of the law to the facts, and a conclusion for each question, supported by proper referencing.

Running head: LAW OF BUSINESS OBLIGATIONS
LAW OF BUSINESS OBLIGATIONS
Name of Student
Name of University
Author Note

1LAW OF BUSINESS OBLIGATIONS
Table of Contents
Question 4........................................................................................................................................2
Issue.............................................................................................................................................2
Law..............................................................................................................................................2
Application..................................................................................................................................2
Conclusion...................................................................................................................................2
Question 5........................................................................................................................................3
Issue.............................................................................................................................................3
Law..............................................................................................................................................3
Application..................................................................................................................................3
Conclusion...................................................................................................................................4
Reference.........................................................................................................................................5

2LAW OF BUSINESS OBLIGATIONS
Question 4
Issue
The main issue in this case is whether IRL would succeed in a negligence claim against
Cautious Accounting.
Law
The elements for a successful negligence claim were seen to be discussed in Sherwin
Chan & Walshe Limited (In Liquidation) & Another v/s Sir Robert Jones & Another [2012]
where the defendant was held liable for the breach of professional duty in negligence by giving
wrongful advice to the client and was given a penalty for the payment of the damages incurred.
Application
Applying the judgment of the case Sherwin Chan & Walshe Limited (In Liquidation) &
Another v/s Sir Robert Jones & Another [2012] in the current scenario it can be seen that a
similar situation had been faced by International Resources Ltd (IRL) when Cautious Accounting
gave them wrongful opinion even after getting all the necessary documents. Taking initiative by
relying on the opinion of Cautious Accounting, IRL was seen to be suffering from major trouble.
IRL can claim for the compensation of damages incurred by them because of the breach of duty
of care by Cautious Accounting.

3LAW OF BUSINESS OBLIGATIONS
Conclusion
Thus it can be concluded that IRL would succeed in a negligence claim against Cautious
Accounting.
Question 5
Issue
The first issue in the case is whether Amelia would be successful in an action against
James.
The second issue is whether James’ mother Betty would be successful in an action
against James.
Law
In the case Bird v Bicknell [1987] it was held by the court that fraud can be held as an
important factor in the determination of the validity of an exclusion clause.
As per section 9 of the Contractual Remedies Act 1979 the court has the power for
granting relief when any party cancels a contract by an order for directing the party for
transferring, assigning or delivering to the other party the possession of any real or personal
property subjected to the contract. This was seen in the judgment of the case Newman Tours Ltd
v Ranier Investments Ltd [1992].

4LAW OF BUSINESS OBLIGATIONS
Application
Applying the judgment of Bird v Bicknell [1987] in the current case it can be seen that
although there was an exclusion clause put on the agreement document on James’ demands, yet
him not paying Amelia for her services towards his bakery even when he promised to pay her
can be construed to be a fraud. Hence here the exclusion clause would not be valid and Amelia
would be eligible to claim for damages for breach of contract.
Applying the provisions of section 9 of the Contractual Remedies Act 1979 and the
common law judgment of Newman Tours Ltd v Ranier Investments Ltd [1992] it can be seen that
James had signed a loan agreement with his mother which he repudiated. Under the provisions of
the section 9 and the common law the court can make an order against James for the payment of
the loan amount and any such penalty it deems fit.
Conclusion
Thus it can be concluded that both Amelia and Betty would be successful in action
against James.

5LAW OF BUSINESS OBLIGATIONS
Reference
Bird v Bicknell [1987] 2 NZLR 542 (HC)
Contractual Remedies Act 1979
Newman Tours Ltd v Ranier Investments Ltd [1992]
Sherwin Chan & Walshe Limited (In Liquidation) & Another v/s Sir Robert Jones & Another
[2012] NZCA 474