Business Law Assignment - Semester 1, 2019: Question 1 & 2

This assignment addresses two problem questions related to Australian Business Law. The first question examines a scenario involving David, a former sales representative of Nu Shampoo Pty Ltd, and the implications of a restraint of trade clause in his employment contract after he establishes a competing business, Hair Glow Limited. The analysis considers the validity and enforceability of the restraint of trade, including factors like time frame, geographic scope, and the protection of confidential information. The second question explores whether a medical clinic, Your Local Doctor, operates as a partnership, and whether Anne, Mary, Jane, and Sarah can take legal action against each other for alleged breaches of their partnership agreement. The analysis considers partnership law, the Corporations Act, the importance of a partnership agreement, and the application of medical ethics. Both questions are answered using the ILAC (Issue, Law, Application, Conclusion) format, providing a structured legal analysis of the given scenarios.

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 2.................................................................................................................4
Issue........................................................................................................................................4
Rule........................................................................................................................................4
Application.............................................................................................................................5
Conclusion..............................................................................................................................6
References..................................................................................................................................7

BUSINESS LAW 3
Answer to Question 1
Issue
Whether David is liable for the breach of the clause pertaining to restraint of trade and for the
repayment of the amount of one hundred thousand dollars with regard to loan instalment?
Rule
The law of contract would be applicable accordingly with regard to the capitulation upon the
clause pertaining to restraint of trade and the aspects pertaining to the amount of repayment
to be made as per the instalments as stipulated between Monica and Standard Bank Limited.
The relevant partnership act would also be applicable taking account of the territorial
jurisdiction along with the relevant provisions of the Corporations Act of 2001.
Application
The period pertaining to the restraint of trade must be taken into account as far as the clause
in the employment contract formed between Nu Shampoo Pty Limited and David
accordingly. If it is determined and identified accordingly that the period pertaining to the
restrained of trade has elapsed, then David is not liable for the breach of the employment
contract formed with Nu Shampoo Pty Limited. As a result, the clause pertaining to the
restraint of trade must be analysed and interpreted in a proper and appropriate manner as far
as the comprehensive solution to David is concerned (Bildfell, 2015). It would play a vital
role in the capitulation upon the defence of David in an effective and efficient manner
accordingly as far as the aspect pertaining to breach of contract is concerned. With reference
to the aspect pertaining to competing business, it is to be analyzed and accordingly detected
whether Nu Shampoo Pty Limited is in direct competition with Hair Glow Limited as far as
the common products and services offered by both of these services are concerned. In such
aspect, a market analysis may also be conducted accordingly by an expert whose opinions
would be testified accordingly (Bishara, Martin & Thomas, 2015). It is also to be seen
whether the restraint of trade clause implies non-solicitation of business or not. If the aspect
pertaining to non-solicitation of business is observed form the restraint of trade clause as per
the contract of employment formed between Nu Shampoo Pty Limited and David, then it is
implied that David is barred from the inducement of the employees and customers of Nu
Shampoo Pty Limited and David accordingly (Nicholls, 2015). If such a clause is
contravened, then David would be liable for breach of contract and the penalties would be
imposed accordingly. As a result, it is imperative that the clause pertaining to the restraint of
trade in the employment contract formed between David and Nu Shampoo Pty Limited would
play an extremely important role in the determination of the aspect pertaining to the breach of
contract on part of David with regard to the formation, registration and incorporation of the
company Hair Glow Limited after leaving Nu Shampoo Pty Limited accordingly (Sandeen &
Rowe, 2016). The aspect pertaining to confidentiality would also be taken into account if it is
expressly mentioned in the restraint of trade clause in the employment contract formed
between David and Nu Shampoo Pty Limited. It implies that the information with regard to
the affairs pertaining to the business activities of Nu Shampoo Pty Limited cannot be

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disclosed by David being in the capacity of a shareholder of Hair Glow Limited accordingly.
The stipulated timeframe pertaining to such kinds of aspects with regard to the restraint of
trade clause must also be taken into consideration accordingly as far as the formation of Hair
Glow Limited is concerned. Additionally, in order to be enforced and executed in a proper
and appropriate manner, the clause pertaining to the restraint of trade in the employment
contract must be reasonable in nature. It further implies that Nu Shampoo Pty Limited must
have a valid interest with regard to the clause pertaining to restraint of trade as far as the
employment contract formed between Nu Shampoo Pty Limited and David is concerned.
The aspect pertaining to the necessity of such kind of clause with reference to the restraint of
trade should be examined and analyzed in a proper and appropriate manner. The aspect
pertaining to the time frame and the location pertaining to the restraint of trade must also be
taken into account as far as reasonableness is concerned. As a result, with reference to the
facts of the case, it is to be seen whether the area where Hair Glow Limited has been floated
and established by David is barred by the restraint of trade clause in the employment contract
between David and Nu Shampoo Pty Limited or not. Such an aspect should be reasonable in
nature taking account of the facts and circumstances of the case. It would help in the
determination pertaining to the factors with regard to the enforceability of such a clause in a
proper and appropriate manner (van Zyl, 2017). In the case of Sothern Cross Computers
Limited v Palmer, the aspect pertaining to the dispute between the parties was the
reasonableness related to the restraint of trade clause as far as the time period of four years is
concerned. In this case, it was concluded by the Supreme Court of Victoria that a restraint of
four years was reasonable as far as barring of the professionals involved in the area of
Information Technology is concerned in a company which is in direct competition with the
former company of the IT professional. As a far as the aspect pertaining to repayment of loan
is concerned, it is to be seen whether David is liable for the acts committed by Monica as far
as being a guarantor is concerned. The aspect pertaining to the liabilities in partnership in the
limited form may also be taken into account in this aspect.
Conclusion
It can be concluded by stating that the aspect pertaining to restrain of trade has been justified
and appropriate as far as the providing of a comprehensive solution to David is concerned.
The aspect related to repayment of loan granted to Monica by Standard bank Limited has also
been taken into account and subsequently been discussed and demonstrated.
Answer to Question 2
Issue
Whether a medical clinic in under the ambit of a partnership firm as far as business is
concerned and if so, whether Anne and Mary are entitled to initiate proceedings against Jane
and Sarah with regard to acting in contravention of the contract pertaining to partnership.

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Rule
The law pertaining to partnership would be applicable accordingly as far as contract is
concerned amongst partners. Additionally, the rules pertaining to the aspect related to the
liabilities for action in contravention of the clauses of the contract would also be taken into
account as far as partnership is concerned.
Application
If the doctors or medical practitioners in question contemplate to work together in the interest
of ethics and mutual trust, then a medical clinic would be under the ambit of a partnership
firm. Major disagreements amongst the doctors or medical practitioners may lead to the
liquidation of the clinic as far as the aspect pertaining to the dissolution of a partnership firm
is concerned (Griggs, Cho, McLaren & Scheibner, 2018). As a result, the laws pertaining to
partnership are applicable to the clinic Your Local Doctor as it is formed on the basis of
partnership between Anne, Jane Mary and Sarah as far as the facts pertaining to mutual trust
amongst them is concerned. In order to imply the effectiveness and efficiency of Your Local
Doctor in the capacity of a partnership entity, it is to be seen whether there are common
interests amongst Anne, Jane Mary and Sarah with regard to the administration of healthcare
management pertaining to the modus operandi of Your Local Doctor and the caring of
patients in a proper and appropriate manner thereby leading to their diagnosis in a
comprehensive manner (Cartwright, 2016). As a result, it is imperative that Your Local
Doctor is a partnership formed by Anne, Jane Mary and Sarah accordingly. The law
pertaining to the respective state of territory of Australia would be applicable with reference
to partnership as far as the clinic Your Local Doctor is concerned with regard to the facts of
the case. Since the number of partners is less than twenty, Your Local Doctor is not required
to incorporate with regard to the formation of a corporation as far as Section 115 of the
Corporations Act of 2001 is concerned. The key aspect in this regard is the agreement of
partnership formed between Anne, Jane Mary and Sarah as far as the aspect pertaining to a
valid contract is concerned. The original aspect pertaining to the agreement of partnership
formed between Anne, Jane Mary and Sarah implies that the entering into agreements in
excess of ten thousand dollars by any partner would imply the approval the other partners.
The reasonableness has to be taken into account as far as the aspect pertaining to the
enforceability and execution of such a clause is concerned. If the entering into an agreement
in excess of ten thousand dollars by any partner is for the benefit of the clinic Your Local
Doctor, then such a clause is not reasonable since almost all legislations in Australia
applicable in the respective states and territories imply that the primary objective of a
partnership firm should be the generation of profits and revenues in a proper and appropriate
manner. However, medical ethics are also applicable since Your Local Doctor is not only a
partnership entity but also a medical clinic (Mitchell, O'Donnell, Marshall & Ramsay, 2016).
As a result, it is implies that the treatment of patients in a comprehensive manner should be of
utmost importance on part of Your Local Doctor as far as the laws pertaining to health care
are concerned along with the legislations pertaining to health and safety of both staff and
patients accordingly. In the case of Cox v Culson, two people organised a skit with reference
to the objective of gaining profits and revenues in the desired manner. The undertakings were
grossly shared by both the persons. However, one person was involved in the hiring of the

BUSINESS LAW 6
theatre thereby making all the related payments and the other person involved in the hiring of
the actors thereby making all the related payments accordingly. Such payments were incurred
by them by the virtue of the respective shares held by them as far as the undertakings are
concerned. In this case, it was held by the King’s Bench that there was no basis of partnership
since there was a lack of a joint enterprise amongst the two people since each of the person
carried out its own set of tasks and activities accordingly. Any kind of agreement which
involves the aspect of Joint Venture is to be treated as a partnership agreement provided that
the entrepreneurial aspect of the people owning the business should be on a joint basis. As a
result, it is imperative that Joint Venture agreements and partnership agreements are
equivalent to each other. In the case of Canny Gabriel Advertising v Volume Sales (Finance)
Pty Ltd, it was held by the High Court of Australia that any relation amongst the partners in a
business which implies Joint Venture states that such kind of a business should be treated as a
partnership. If the holding of the shares amongst Anne, Jane Mary and Sarah is on a joint
basis with regard to the ownership of Your Local Doctor, then the partnership agreement
signed by them is valid. As a result, it is implied that there is a partnership amongst Anne,
Jane Mary and Sarah as far as the modus operandi of Your Local Doctor on a joint basis is
concerned.
Conclusion
As observed form the facts of the scenario provided along with the relevant legislations and
case laws it can be concluded by stating that Anne and Mary as partners of Your Local
Doctor can claim the damages pertaining to the breach of the partnership agreement on part
of the other partners Jane and Sarah. As a result, the law pertaining to partnership is justified
and appropriate accordingly.

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References
Bildfell, C. (2015). The Case for Broadening the Ambit of Restraint of Trade and for
Focusing on Reasonableness. Alta. L. Rev., 53, 681.
Bishara, N. D., Martin, K. J., & Thomas, R. S. (2015). An empirical analysis of
noncompetition clauses and other restrictive postemployment covenants. Vand. L.
Rev., 68, 1.
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the
civil lawyer. Bloomsbury Publishing.
Griggs, L., Cho, G., McLaren, J., & Scheibner, J. (2018). Commercial and Economic Law in
Australia. Kluwer Law International BV.
Mitchell, R., O'Donnell, A., Marshall, S., & Ramsay, I. (2016). Law, corporate governance
and partnerships at work: a study of Australian regulatory style and business
practice. Routledge.
Nicholls, R. (2015). Restraints of trade: Tips and traps for enforceability. Proctor, The, 35(8),
14.
Sandeen, S. K., & Rowe, E. A. (2016). Debating Employee Non-Competes and Trade
Secrets. Santa Clara Computer & High Tech. LJ, 33, 438.
van Zyl, B. (2017). Conditions under which a Restraint of Trade agreement is reasonable. HR
Future, 2017(Mar 2017), 40-45.