Business Law: Exploring Separation of Powers and Contract Formation

This essay provides a comprehensive analysis of the doctrine of separation of powers in Australia, detailing the roles of the legislature, executive, and judiciary. It further explores contract law, defining contracts and their essential elements such as offer, acceptance, consideration, capacity, intention, and mutual consent. The essay applies these principles to a case study involving Events Management Ltd and Rigby Corporate Function Planners, arguing that the contract is void due to absence of consideration, referencing the case of Kleinwort Benson Ltd v Malaysian Mining Corporation. The assignment uses the ILAC (Issue, Law, Application, Conclusion) methodology to address a hypothetical problem, demonstrating a thorough understanding of relevant legal principles. Desklib provides students access to similar assignments and study tools.

Running Head: Business Laws
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Business Laws
Student Name:
1/19/2019

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Part A
The doctrine of Separation of Powers: It is a doctrine which ensures distribution of powers
rather than keeping power in the hands of few people. According to this doctrine, the
constitution of Australia has divided the powers between three institutions namely the
legislature, the executive and the judiciary. It can be observed that the doctrine has provided
powers to all the three institutions of the government which helps in prevailing the rule of law
in the country. In other words, such doctrine acts as the main and the basic basis in forming
the constitution of Australia.1 The constitution of Australia consists of the initial three things
named as the ‘The Parliament’, ‘The Executive’ and ‘The Judiciary’. It can be observed that
the doctrine of separation of powers has provided equal powers to all such institutions in
order to avoid powers in the hands of few people. Every such institution has separate powers
as well as separate individuals to manage the day to day affairs of such institutions.
The legislature of Australia is the Commonwealth Parliament of the Australia which is
further divided into two parts that are the House of Representatives and the Senates who
makes and amends the laws for the country. These members are the elected representatives of
the people whose role is to make or amend laws as per the agenda set by the government
during the elections of the country.2 The law in the country is made by presenting the bill in
the parliament, such action is usually done by the government of the country where the
discussion takes place between the opposition and the government regarding the laws and
provision of the bill, if any such changes are required that the bill is being sent to the drafting
committee which reviews the requirements and the changes are made as per the requirements
of the members which are beneficial for the country. After such changes in the bill, the bill
1 Julian Leeser, et al. "Upholding the Australian Constitution Volume Twenty-seven." (Oxford University Press,
2017).
2 John Harrison, Legislative power and judicial power. (Routledge 2016).

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gets presented back by the government of the country in the parliament of the country and
upon such approval by both the members if the House of Representatives and the Senate.
After such approval from the parliament the bill is presented to the President of the country
and upon the approval of the president, the bill gets applicable to every citizen of the
country.3
The executive consists of various government departments and the governor-general of the
country. The government departments and the governor general help in enforcing the laws
which are made by the legislative body of the country. It can also be noted that the executive
has the right to get the interpretation of laws from the judiciary. On the basis of the
interpretation of laws, the executive has the right to enforce such laws to the public. The
President is considered as the Head of the State, the role of the President to chair the
executive body of the country and such body ensures that the laws which are prepared by the
legislature are duly enforced to each and every citizen of the country. Another important role
of the executive is to prevent the powers to the hands of limited people. The members of the
executive are also responsible for managing the affairs of the parliament which helps in the
preparation of laws for the country. The executive also ensures that the laws are being
prepared in a constitutional manner.
The judiciary is another branch which helps in maintaining the rule of law in the country. The
role of the judiciary is also to interpret laws in the country. One of the basic and the most
important element of the judiciary is the court which helps in maintain law in the country.
The court ensures that the laws prepared by the legislature and enforced by the executive are
being implemented at the ground level of the country. The judiciary is being headed by the
3 Robert French, Book Review: Lisa Burton Crawford the Rule of Law and the Australian Constitution.
(Routledge, 2017)

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attorney general of the country where the judges and magistrates are being appointed to run
the court and to ensure the rule of law prevails in the country. The judiciary system of
Australia is very sorted and successfully managed by the judicial authorities of the country as
the courts are being divided on the basis of cases that is civil cases and the criminal case.4
However, the courts are also divided on the basis of seniority where the decision of the higher
courts prevails over the decision of the lower courts. Such division of courts helps in an
effective and timely solution of cases which helps in maintaining the rule of law in the
country. It can also be noted that the judicial system of Australia is one of the most
independent judicial systems in the world where the judgement are made on the basis of laws
made by the legislative. The appointment of judges in the country is also done on the basis of
merit and performance where an independent judicial body appoints the judges who are done
in a constitutional manner.5
The Australian constitution not only applies the concept of the doctrine of separation powers
but the constitution of Australia has also adopted the function of ‘Responsible Government’
where the government of the country can be formed on the basis of coalition between the
various political parties and such coalition between the parties would help them in running a
responsible government. It can be said the doctrine of separation plays an important role in
forming the government and the doctrine has also played an important role in the distribution
of powers to the different constitutional authorities who helps in maintaining rule of law in
the country.
4 Peter Gerangelos, Separation of powers in the Australian constitution: Themes and reflections. (Routledge
2017).
5 Hobbs, Harry, ‘Judicial independence in Australia: Contemporary challenges, future directions [Book
Review].’ Alternative Law Journal 41(3) (2016) 217.

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Part B
Issue
Whether the contract between the companies exist or not?
Law
A contract can be defined as an agreement (which can be both oral and written in nature)
between the parties to contract where the amount of consideration is decided in exchange of a
certain amount of goods and services. The contract is legally binding and enforceable by the
court of law when the essential elements of the contract are included.6 The party who
breaches the contract may face certain legal threats, and such threats are in the form of fine or
in the form of imprisonment. The following are the basic and the essential elements of the
contract:
1. Offer: The first and the basic elements of the contract is an offer made by one party to
another party. It is an important element because without an offer a contract would never
prevail and it would never come to existence. Such an element is very useful and very
important in deciding the validity of the contract.7 It should be noted that the offer should be
duly communicated to all the parties to contract and the offer should be duly accepted by the
parties if the offer is amended or rejected then the original offer will not prevail to the parties
to contract.
2. Acceptance: It should be noted that the original offer should be communicated to all the
parties to contract. In case of any amendments in the offer, the original offer would stand
terminated. It should also be noted that such an offer should be duly accepted by the parties to
6 Richard Stone and James Devenney. The modern law of contract (Routledge, 2017).
7 Jill.Poole, Textbook on contract law. (Oxford University Press, 2016).

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contract.8 Such offer and acceptance should be made with an intention to create a legal
relationship.
3. Consideration: It is considered to be one of the basic elements of a contract, where the
parties to the contract except the consideration in exchange of certain goods and services
which are mentioned in the offer. Upon the payment of consideration by the parties to
contract, the contract becomes enforceable by the court of law where such contract is legally
binding to all the parties. It can be noted that any contract which violates any provision of law
becomes voidable by the court of justice.9
4. Capacity: It is one of the essential parts of the contract where the validity of the contract
depends on such an element. The capacity element of the contract helps in deciding whether
the party or parties to the contract are eligible for a contract or not? The following are the
parties which are not eligible to contract:
 A person of unsound mind.
 A person who is declared insolvent by the court of justice.
 A person who is prohibited by law.
 A person below the age of 18 years.
 A person who is having a contract under the influence of alcohol and drugs.
5. Intentions to create legal relations: Another important factor of the contract is that the
intention of the parties to contract must be in good faith. In other words, the intentions of the
parties to enter into a contract must be made with an intention to create a legal relationship. It
8 Klee Lukas, International construction contract law. (John Wiley & Sons, 2018).
9 McKendrick Ewan, and Liu Qiao. Contract Law: Australian Edition. (Macmillan International Higher
Education, 2015).

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must be noted that in absence of such intentions the contract would become voidable by the
court of law.10
6. Mutual Consent: Under this element of the contract, the contract between the parties
should be done based on the mutual consent and mutual understanding between the parties.
Such a contract should not be made under the influence of any other party. In absence of such
element, the contract can be proved voidable in the court of law.11
7. Written or verbal: A contract is an agreement between the parties which can be made
verbal and written. It can be noted that not all contracts are verbal in nature, some of the
contracts have to be performed in a written manner for example contracts made between the
parties for the purchase and sale of properties. 12
10 H.Edwards Alexander, ‘Leading cases in contract law [Book Review]. Bar News: The Journal of the NSW
Bar Association’ 61 (2017).
11 Cartwright John, Contract law: An introduction to the English law of contract for the civil lawyer.
(Bloomsbury Publishing, 2016).
12 Smith Joshua, ‘Contract law in Australia [Book Review] Ethos: Official Publication of the Law Society of the
Australian Capital Territory.' 60 (2018) 248.

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Case Laws
Kleinwort Benson Ltd v Malaysian Mining Corporation, [1989] 1 WLR 379
It was held by the court of law that the basic element of contract that is consideration was
missing hence it was held by the court of justice that such contract is void and inadmissible in
nature. Hence the MMC is not liable to pay such amount to the bank as the company went
into liquidation and the contract made between the company and the bank has made voidable
in the court of law.

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Application
After analysing the above case study it can be observed that the contract made between the
Events Management Ltd and Rigby Corporate Function Planners is void as there was the
absence of consideration, hence the contract between the parties is voidable in the court of
law. From the case law of Kleinwort Benson Ltd v Malaysian Mining Corporation, it can be
observed that there was no consideration between the parties and hence the court of justice
declared such contract void and the party is not liable to pay for any such amount. However,
in this case, scenario, it can be noted that both the parties agreed to enter into a contract and
both the parties have made relevant preparations to enter into the contract but the Rigby
Corporate Function Planners opted out of the contract. Hence it can be noted that there was
an absence of mutual consent between the parties, therefore, the contract cannot be legally
binding to both the parties. It can also be noted that there was an absence of consideration
between the parties; hence such a contract cannot be performed in absence of consideration
between the parties to contract. Therefore, it can be recommended to Samantha that the basic
elements of the contract were absent hence the contract cannot be performed and the contract
cannot be legally enforceable by the court of justice.

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Conclusion
From the above case study, it can be concluded that the contract made between the two
companies cannot be enforced by law as the contract lacked the basic elements that are a
consideration and mutual consent which has led to the cancellation of a contract which was
made between the parties. Hence, Samantha is recommended that she has no grounds to sue
the company regarding the breach of contract, but she has the right to claim for damages for
wastage of her time and efforts made by her company.

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Bibliography
Articles/Books/Reports
Alexander H.Edwards, ‘Leading cases in contract law [Book Review]. Bar News: The Journal
of the NSW Bar Association 61 (2017) 48.
Ewan McKendrick, and Qiao Liu. Contract Law: Australian Edition. (Macmillan International
Higher Education, 2015).
French Robert, Book Review: Lisa Burton Crawford the Rule of Law and the Australian
Constitution. (Routledge, 2017)
Gerangelos Peter, Separation of powers in the Australian constitution: Themes and reflections.
(Routledge 2017).
Harrison John, Legislative power and judicial power. (Routledge 2016).
Harry Hobbs, ‘Judicial independence in Australia: Contemporary challenges, future directions
[Book Review].’ Alternative Law Journal 41(3) (2016) 217.
John Cartwright, Contract law: An introduction to the English law of contract for the civil
lawyer. (Bloomsbury Publishing, 2016).
Joshua Smith, ‘Contract law in Australia [Book Review] Ethos: Official Publication of the
Law Society of the Australian Capital Territory.' 60 (2018) 248.
Kleinwort Benson Ltd V Malaysia Mining Corporation Bhd, [1989] 1 WLR 379
Leeser Julian, et al. "Upholding the Australian Constitution Volume Twenty-seven." (Oxford
University Press, 2017).
Lukas Klee, International construction contract law. (John Wiley & Sons, 2018).

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Poole, Jill. Textbook on contract law. (Oxford University Press, 2016).
Richard Stone and James Devenney. The modern law of contract (Routledge, 2017).
Cases
Kleinwort Benson Ltd v Malaysian Mining Corporation, [1989] 1 WLR 379