BUMAN103A Business Law: Solving Partnership and Contract Problems

This assignment delves into several business law scenarios. The first question examines Kate's liability in a partnership with Michael concerning a debt to Australian Truffle Delicacies, applying partnership law to determine if Kate is personally liable. The second question identifies the contractual terms between Damien and Cassandra regarding a motorcycle purchase, focusing on whether certain statements constitute contractual terms and Damien’s rights. The third question advises Vincent Lee on whether Sarah can claim remedies for a breach of contract involving gluten-free flour, distinguishing between conditions and warranties to determine if Sarah is entitled to rescind the contract or claim damages. Desklib provides a platform for students to access similar solved assignments and study resources.

Business Law
Running Head: Business Law 0
BUMAN103A Business
Law
7 / 1 1 / 2 0 1 8
Student’s Name

Business Law 1
Contents
Question 1........................................................................................................................................2
Issue 2
Rules 2
Application 3
Conclusion 3
Question 2........................................................................................................................................4
Issue 4
Rules 4
Application 5
Conclusion 5
Question 3........................................................................................................................................5
Issue 5
Rules 6
Application 6
Conclusion 7
References........................................................................................................................................8

Business Law 2
Question 1
Issue
The issue involved in the case is to check that whether Kate is responsible towards the Australian
Truffle Delicacies and what are her personal liabilities.
Rules
In a partnership, two or more person come together to earn money with the help of mutual efforts
(Find Law, 2018). The partnership agreement is a document containing the rights; obligation and
duties of a partner and partners of the firm are bound with the requirements of the partnership
agreement. The relationship of agency exists between/among the partners of the firm mutually
and between a partner and a firm. As in agency a principal, remain liable towards the third party
for the act of an agent, similarly, in a partnership, the firm remains liable towards an outsider for
the act of a partner and visa versa. Section 5 of the Partnership Act 1892 No 12 says that a firm
is responsible for the act of its partners that they do in the regular course of firm’s business (New
South Wales Government, 2018). Section 6 of the act says that every partner of the firm is
bound by the act that has been done on behalf of the firm or in the name of the firm either by any
partner of the firm or someone else (Austlli 2018) .
Further, in cases of partnership, the liability of partners in respect of firm’s debt remain
unlimited. The reason behind the same is that a partnership firm is not a separate legal entity
similar to a company and hence the person who owes the right in respect to a firm can ask the

Business Law 3
performance of the same from partners. In such a scenario, a partner of the firm becomes
personally liable to pay off the liability of firm, if the firm is not able to do the same.
Application
According to the provisions of the partnership agreement Michael was required to look after the
food and other requirements of raw material related to the business of their restaurant. Michael
has ordered some Truffle from Australian truffle Delicacies without discussing the same with
Kate, the other partner of the firm.
Later on, Michael had to leave for his home cause of illness of his father. He informed Kate that
he will not be in contact due to the remoteness of his house. Now, Australian truffle Delicacies
is asking the payment of supply made by the same to the restaurant of Michael and Kate.
Applying the provision of the partnership law, being a partner Michael was acting as an agent of
his partnership firm while dealing with Australian truffle Delicacies. The firm was responsible
for the act of Michael. Michael has entered into the subjective contract with the name of the firm,
therefore applying the provisions of section 5 and 6 of the act; firms and all the partners will be
held responsible for the same. Moving towards the liability of Kate, this is to state that she will
be personally liable for Australian truffle Delicacies if the funds of the firm would not be
sufficient to make the payment to Australian truffle Delicacies.
Conclusion
In conclusion, this is to mention that firstly, the firm will be responsible to make the payment to
Australian truffle Delicacies and then after Kate can be held personally liable up to the decided
ratio to make the payment of claim raised by Australian truffle Delicacies if there are not
sufficient funds in the partnership.

Business Law 4
Question 2
Issue
What are the terms of contract developed between Damien and Cassandra and what rights
Damien has in against of Cassandra?
Rules
A contract is a set of promises that both the parties thereto made with each other. A contract
gives rise to certain responsibilities that parties have to fulfill in order to perform a contract.
Before the development of every contract, parties to the case discuss these responsibilities and
requirements with each other. These are the statements that are known as puffs and are
considered as mere statements rather than a term of the contract because of intention of the
parties to bind each other remain missing. According to the decision given in the case of In Birch
v Paramount Estates Ltd (1856) 16 EG 396, a statement will be treated as contractual term if one
of the party is very particular about the same and in case of absence of the factor stated in
statement, party would not be interested to enter into contract.
Heilbut, Symons & Co v Buckleton [1913] AC 30 is another important case to study. In the
decision of this case, the intention of the parties has been checked and it was given that intention
of the parties is also important to confirm the meeting of minds of both the parties to the case.
In case of breach of a contractual term, the innocent party can ask for the damage to the other
party who breach the terms. Further, it is also necessary to inform that breach of contractual term
lead an issue of non-fulfillment of contractual obligation.

Business Law 5
Application
In the given case, Damien has mentioned many of his requirements such as bike must be of black
color with one matching helmet and the same must be developed in Japan. He was looking for
the bike made in Japan only, as he also stated the same to Cassandra. When he looked at the
black CBR1000 model bike, he became ready to buy the same. As he wanted a bike in blue
color, he also became ready to wait for a week for that particular color. The subject matter of the
case was a bike. Applying the provisions of Birch v Paramount Estates Ltd, this can be stated
that Damien had an intention to bind Cassandra with the requirement of the country of origin and
color of the bike. Hence, these two requirements will be treated as contractual terms and not
merely statements.
One cannot treat providing helmet as a contractual term as the helmet was not the subject matter
of contract and Damien was not intendant to cancel the contract in case of not providing the
helmet. Hence, there were two contractual terms such as bike must be developed in Japan and the
same must be of black color. Providing helmet of the same color will be treated as a statement
made before contract and no doing the same will not attract any contractual obligation.
Conclusion
Damien can ask the damages from Cassandra for breach of two contractual terms.
Question 3
Issue

Business Law 6
To provide an advice to Vincent Lee that whether Sarah is entitled to claim any remedy or not.
Rules
In a contract, there are certain terms exist between the parties that need to be fulfilled by them in
order to perform the contract lawfully. There are majorly two types of terms exist under contract
law. One is the warranty and another one is a condition (Taylor and Taylor, 2015). A condition is
a term that is very significant for one of the parties of the contract and in the absence of the
same, the purpose of the contract remains no longer useful for such party. Whereas on the other
side the warranty is less crucial in nature in comparison to the condition of a contract.
As per the decision was given in the case of Poussard v Spiers & Pond (1876) 1 QBD 410, a
party can rescind the contract if another party breaches any condition of the contract. The party
can also asked for the damages. On the other side, in case of breach of warranty, the innocent
party can only sue the other party for damages.
Now, the issue is to check that whether a particular term is a warranty or a condition. In order to
answer the query, this is to mention that intention of the parties remain important in such
scenario (Chandler, 2017). If a term is very as important for a party that in the absence of the
same the party would not have entered into a contract, then it will be treated as a condition, not a
warranty. Some addition terms, those are important but are not related to primarily to the
contract will be termed as warranty.
Application
In the given case, the gluten-free flour was the lead requirement from the side of Sarah. The
intention behind choosing such specific kind of flour was to keep the consumers healthy. Her

Business Law 7
business was to provide gluten-free products and hence she was required gluten-free flour as a
raw material. She has found, Vincent Lee a supplier of gluten-free flour. Sarah has mentioned
her requirements to the supplier and also informed that she is very particular about the quality of
the product. In addition to this, she also informed Vincent Lee that many of the consumers of her
product have severe gluten intolerance.
Looking after the facts and decision of the case of Poussard v Spiers & Pondi, this is to state that
providing gluten-free flour was a condition and not the warranty of a contract. The purpose of
Sarah entering into a contract was to get specific kind of product with no error. Later on, it has
been noted that the provided flour contained traces of gluten. It was a breach of condition of the
contract.
Conclusion
Sarah has right to sue Vincent Lee for breach of condition of the contract. She can rescind the
contract and also can ask for the damage that occurred to her cause of non-preparation of the
final product.

Business Law 8
References
Austlli. (2018) PARTNERSHIP ACT 1892. [online] Available from:
http://www8.austlii.edu.au/cgi-bin/viewdb/au/legis/nsw/consol_act/pa1892154/ [Accessed on
14/10/18]
Birch v Paramount Estates Ltd (1856) 16 EG 396
Chandler A. (2017) Q & A Revision Guide Law of Contract 2013 and 2014. UK: OUP Oxford.
Find Law. (2018) Partnership Rules: FAQs. [online] Available from:
https://smallbusiness.findlaw.com/incorporation-and-legal-structures/partnership-rules-and-
faqs.html [Accessed on 14/10/18]
Heilbut, Symons & Co v Bucklet(on [1913] AC 30
New South Wales Government. (2018) Partnership Act 1892 No 12. [online] Available from:
https://www.legislation.nsw.gov.au/#/view/act/1892/12/historical2004-04-05/full [Accessed on
14/10/18]
Partnership Act 1892 No 12
Poussard v Spiers & Pond (1876) 1 QBD 410
Taylor, R., and Taylor, D. (2015) Contract Law Directions (5th ed.). UK: Oxford University
Press.