Australian Contract and Corporation Law Case Study

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Business and corporate law

Contents
Business and corporate law.............................................................................................................1
Introduction......................................................................................................................................3
Main body........................................................................................................................................4
Part A contract law......................................................................................................................4
Option 1...................................................................................................................................4
Part B Corporation law................................................................................................................7
Option 1...................................................................................................................................7
References......................................................................................................................................10

Introduction
The term contract law is considered to be one of the most important and most satisfying law in
the country that helps the individuals and the business enterprises to make the contract as per the
set standards by the government of the country. This law encompasses the law or regulation
which are directed towards the enforcing of certain promises. The corporation law in Australia is
deemed to be one of the most important and useful law that helps in regulating the affairs of the
company that are working in the continent (Allen, 2017). This law has borrowed various terms
heavenly from the company law of UK. Hence this is seen that it is considered to be one of the
most important law in country. This report aims at solving the issue that has been generated in
the cases which are given. This report would help in solving the issue that are related to the
corporate law and the company’s law. Various laws that are related to these case scenarios would
be applied so that the proper legal solution could be given to the parties in dispute.

Main body
Part A contract law
Option 1
Issue
In the given case where SOO burger has asked for the legal advice for the issue that they have
entered into. The case relates to the contract act where the company is in the business of
Hamburger restaurant in Australia and New Zealand. This is seen that the company has made the
promotion rules for the purpose of the increasing the sales of the company where they have
decided that they would provide the golden scratch if the customer has 50 tokens which can be
taken for the purpose of making it scratch and this can lead to make them achieve the brand new
Mazda CX-9. This was seen that Michael “Mikey” morrow was one of the customer of the
company where he decided to join the promotion and this was seen that he ate 50 SOO burger in
order to win the token (Allen & Kraakman, 2016). While this was seen that he got exhausted and
had to be hospitalised for the purpose of medical treatment. While on the other hand Brett
vulture scavenged through the bins of SOO burger the wrappers so that he can claim the token.
Hence he quickly collected 100 tokens. He got to scratch card and the scratched them so that he
got around two golden cars. Where he went to the office of the company and demanded for price
that he won. This was seen that receptionist told him to wait and afterward put the notice on the
announcement board for the mistake that they have done in the printing error. This was said that
the incorrect golden scratch tickets were included in the promotion. Hence this is seen that in
every one of the five tickets were winning tickets.
Afterwards this was seen that Mickey got to know about the something wrong has happened and
scratch the golden scratch card. Where this was seen that Mickey also got the car in the scratch
that he done and went to the head office of the company to claim his reward.
Hence the company wants to seek the legal advice for the issue that has been generated.
Rule
Australian contract law concerns the felony enforcement of guarantees that had been made as a
part of a good’s buy freely entered into, forming a felony relationship between the parties which
is referred to as a contract (Allen, Kraakman, & Subramanian, 2016). The common law in
Australia is based at the inherited English settlement law, with precise statutory changes of

concepts in a few areas and the development of the law through the choices of Australian courts
that have diverged somewhat from the English courts especially since Eighties. This is seen that
the contract law has defined that the invitation to offer is an action for inviting the other party to
form the contact. Hence sometimes these are considered to be the offer and it must be accepted
by the offeror at the defined terms and condition and no counter offer must be done for this
purpose. The rights and duties of parties to a settlement are determined through the phrases of
that contract. Those terms can be express or implied (Hamermesh & Strine, 2017). This is seen
that the terms can be decided as 'specific', despite the fact that no longer mentioned by the
parties. As an example, phrases can be integrated by means of the alternate of written phrases, be
aware-board shows and tickets. However, to be successfully integrated into a settlement these
phrases ought to exchanged or displayed before the conclusion of the contract and adequate
notice of the phrases must accept to the different party. If one party is aware of the false
impression or have to aware about the mistake, the contract might not be enforceable, despite the
fact that the other party did not make the reason to the mistake. The regulations books call this a
"unilateral mistake." This is seen that if the contract is entered then it is the duty of the party to
the contract to fulfil the terms of the contract.
Application
This is seen in this case that SOO burger has made the invitation to offer and decided to run a
competition where the price was set for a car for the winner. While this was seen that they
mistakenly made the wrong tickets and revoked the offer through the public announcement. The
company has the obligation where they have to pay to the customer for the grand price. This was
seen that the company does not have any obligation to pay to the Mickey and the Brett as this is
seen that the company has already paid to the person who was at the first instance came to the
company for the purpose of taking price (Bayern, 2016). Hence afterwards the company
provided the public notice outside the company and on the radio for the revocation of the offer
and for the purpose of specifying the mistake that has been done. This is seen that if the reward is
gained through the fraudulent manner than it would lead to discharge of the contract and the
contract would not accepted in the invitation to the offer. Hence this is seen that Brett would not
be paid for the price that he is asking as this is done in the fraudulent manner. While this is seen
that Mickey would also not be able to get the price as this was revoked before he scratch and
came to know about the reward hence this is seen that they are not liable to get the price. This is

also seen that as the mistake has been announced publically and he does not have the knowledge
about the offer that has been taken back. Hence he is not liable to get the prize that is decided as
the mistake was commenced and the offer has been rescinded before the performance (Murray,
2017).

Part B Corporation law
Option 1
Issue
The issue that has been discussed over here incudes the corporation law where the party includes
the Sparkling Pty Ltd which operates three children clothing shops in Tasmania. This was seen
that Sarah was appointed as the managing director of the company for the period of two years.
This was seen that after to year Sarah was not formally appointed as the managing director of the
company and she continued to be the MD of the company. At the time of appointment the term
included for the appointment of Sarah included that she would be restricted to enter into the
contract for borrowing transaction in excess of $20,000 and above this the approval of board
would be required. While she signed a log contract on behalf of the company for the amount of
$30,000 so as to establish the Eucalypt plantation. The board after getting to know the situation
rescinded for the contract and stopped all the repayments of the loan. Here the bank decided to
sue the company for the amount and asked for the price that is to be repaid to them.
Rule
According to the corporation act 2001, the companies that are working in the country has to
govern by the corporation act which specifies the rules and responsibilities of the directors and
the managers of the company. According to the companies act this is seen that a proprietary
business enterprise should have as a minimum one director. At least one director of a proprietary
company must in the main live in Australia (Stout, et. al., 2016). It is important to provide
private details of a director, which include their complete name, date and vicinity of birth and
usual residential address, should be notified to ASIC shortly after the director is appointed. This
is seen that the duty of directors are defined in the section 181 of the corporation act. The duty of
directors includes to act in good faith within the pleasant pursuits of the company; exercise their
powers for the purposes for which they were conferred; act with affordable care and diligence;
keep away from conflicts of interest; and not to improperly use agency records or their function
to gain an advantage for themselves or someone else or to motive detriment to the corporation.
This is seen that directors of the company must work as per the terms that are decided by the
company and they should not go above this. If the director breaches the duty then then they
would be liable in the different way which includes the criminal sanctions, civil sanctions,

disqualification and commercial consequences. This is seen that if the director of the company is
removed or is not again appointed after the tenure than the company has to provide the
information to the ASIC for the appointment of the new director otherwise penalty would be
imposed on the company for the same.
Application
(a) What do you think the outcome of this case will be?
As this is seen that the Sarah has entered into the contract which is of amount greater than of
what she is having power to do and hence for this amount the approval of board should have
been asked. While this is seen that the company has not appointed Sarah again as the MD of the
company hence she is not having the power to enter into the contract. As in this case as per the
companies’ law Sarah would be personally liable for the amount that has been taken by her for
the company (Strine Jr, 2015). This is seen that here in this case the company and the employee
would made liable. While Sarah would be personally liable for the loan repayment that has been
taken by her on her behalf and the company would only be liable for the penalty as decided by
the ASIC and the corporation act.
(b) What do you think the outcome of this case should be?
This is see that for the purpose of taking the decision of the output of this case. It is seen that
company should be made liable as this is seen that company has the obligation to tell the ASIC
about the appointment or the reappointment of the director and hence they haven’t made it.
Hence this is seen that for the purpose of analysing the issue this is considered that company
should be made liable at the first instance for the amount of the repayment of the loan that is
taken as the bank gave the loan on the name of sparkling ltd. And hence they are liable to pay
back the amount to the bank. This is also seen that they would be liable to pay penalty to the
ASIC for not providing information of appointment or reappointment of the director.
(c) Would the outcome of this case be different if:
(I) the loan was for refurbishment of two of Sparkling’ clothing shops;
No the outcome would not change in case if the loan was taken for the purpose of refurbishment
of the company.

(II) The bank’s loan officer knew Sarah had fallen out of favour with the Board and was
negotiating a new job?
Yes in this case the company would not be liable for the acts that are done by the bank officer as
he already knew about the condition of the director.

References
 Allen, W. T. (2017). Our schizophrenic conception of the business corporation.
In Corporate Governance (pp. 79-99). Gower.
 Allen, W. T., & Kraakman, R. (2016). Commentaries and cases on the law of business
organization. Wolters Kluwer law & business.
 Allen, W. T., Kraakman, R., & Subramanian, G. (2016). Commentaries and Cases on the
Law of Business Organizations: 2016-2017 Statutory Supplement. Wolters Kluwer Law
& Business.
 Bayern, S. (2016). The Implications of Modern Business–Entity Law for the Regulation
of Autonomous Systems. European Journal of Risk Regulation, 7(2), 297-309.
 Hamermesh, L. A., & Strine, L. E. (2017). Fiduciary Principles and Delaware
Corporation Law: Searching for the Optimal Balance by Understanding that the World is
not.
 Murray, J. (2017). Examining Tennessee's For-Profit Benefit Corporation
Law. Transactions: Tenn. J. Bus. L., 19, 325.
 Stout, L. A., Robé, J. P., Ireland, P., Deakin, S., Greenfield, K., Johnston, A., & Dine, J.
(2016). The modern corporation statement on company law.
 Strine Jr, L. E. (2015). The dangers of denial: The need for a clear-eyed understanding of
the power and accountability structure established by the Delaware general corporation
law. Wake Forest L. Rev., 50, 761.