Business and Corporate Law Tutorial Questions: Weeks 6-10 Analysis

This document provides a comprehensive analysis of business and corporate law tutorial questions spanning from weeks 6 to 10. The assignment delves into critical areas such as the duty of care, illustrated through a supermarket negligence case, and the application of Australian consumer law, specifically examining product liability. It also explores the concept of franchisees, outlining their advantages and disadvantages, and explains the corporate veil, including when it can be lifted. Furthermore, the assignment clarifies the roles of members and shareholders within a company, along with the conditions for membership and the maximum number of members permitted in Australian companies. The analysis integrates relevant case law, such as Salomon v A Salomon & Co Ltd, and relevant legislation to provide a thorough understanding of key legal principles.

Business and Corporate Law

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Week 6........................................................................................................................................3
Week 7........................................................................................................................................4
Week 8........................................................................................................................................5
Week 9........................................................................................................................................6
Week 10......................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business and Corporate Law tends to mainly focus on governing the legal aspects of
carrying day to day activities of the business. It is useful in regulating the legal obligations and
rights pertaining to the business activities. This study will highlight on the Australian legal
systems and legal framework associated with business.
MAIN BODY
Week 6
a.) Yes, Egeeay Supermarket tends to owe a significant duty of care towards Barbara. It is
referred to as the moral obligation which is useful in ensuring proper safety and well- being to
the person. As per the given case study, Barbara has slipped on grapes at pet food section in the
aisle 3. This has resulted in breaking of her ankle (Chen, 2019). It is the duty of the Egeeay
Supermarket to always enact in the best possible interest of the customers. The Egeeay
Supermarket must tot fail in a way which eventually leads to harm to the individual person. The
Egeeay Supermarket is under the obligation to obviate significant act of omission or act which
results in foreseen reason to harm or injure the other individual. The duty of care is useful in
effectively ensuring that, the store must act in a reasonable manner in order to provide the
comprehensive service to the customers. It is the responsibility of the store manager to keep the
floor clean and also comply with range of duty of care policies and standards to provide
reasonable services to the customers in Egeeay Supermarket. The duty of care ensures that, there
is no significant unreasonable injury is carried out by the customers because of the negligence of
the Egeeay Supermarket on the part of duty of care.
b.) In case of breach of the duty of care, legal liability is imposed against the tort feasor to
compensate the individual against any sustainable loss or injury (Harris, Hargovan, and Adams,
2018). In this case scenario, the Egeeay Supermarket has not acted in a reasonable manner
which leads to the prevention of injury to the Barbara. The Egeeay Supermarket was slipped and
broke her own ankle. The key policy of the store manager was to check the floor of the fruit
section every 15 minutes. There seems to be a breach of duty of care on the part of Egeeay
Supermarket. This has led to the reasonable degree of injury to the customer. The breach of duty
is occurred when there is foreseeable reason of action which results in injury or harm to the
person. The Egeeay Supermarket has failed to act reasonably and also comply with the duty of
care. Hence, in this specific case scenario, no preventive measure has been taken by the customer

to prevent the foreseeable injuries which has been occurred on the part of the Egeeay
Supermarket.
c.) No, the answer to the question would not change if the Barbara has slipped on the fruit
section. The duty of care has to be applied even if the Barbara has slipped on the fruit section. It
is the key policy of the store manager was to check the floor of the fruit section every 15 minutes
(O'Brien, Ramsay and Ali, 2018). However, the Egeeay Supermarket must effectively comply
with the duty of care across all the section of the market as it will help in preventing
unreasonable injury to the customer and also provide safety and care on the part of the Egeeay
Supermarket.
Week 7
The Australian consumer law focuses on providing consumers with the guarantee to
provide the quality goods and services to the customers. This law is useful in protecting the
rights of the customers by complying with the various set of consumer rights which in turn helps
in providing compensation to the customers against any loss or damages. The key rights of the
customers are the right to safety, right to knowledge, right to basic needs, right to healthy
environment, right to information, right to education to the customers , right to representation
and right to redress (Chen, Ramsay, and Welsh, 2016). The Australian consumer law tends to
make sure that, the business is conducted in fair manner and improve the quality of care to the
products and services. In this given case scenario, Brown has significantly purchased pair of
woollen pants from the Underwear Galore company. Brown has contracted Dermatitis because
the underpants tends to contain bi-sulphite of soda. It is considered to be as the legal right of the
customers which is useful in ensuring that the customer must be fully informed about the
products which are present inside underpants. Within the given case scenario, the defect has been
carried out at the end of the manufacturer. Mr. brown has to establish that no relevant
information was given to me regarding the presence of bisulphate soda within the underpants.
This has eventually resulted in the contraction of dermatitis. Inconvenience on the part of the
customers has eventually affected Mr. Brown adversely. Mr. Brown can significantly file a
lawsuit against the company (Efrat, 2016). The Underwear Galore company has not listed out
any materials which has been presented in the underwear packaging. It is crucial for the
manufacturer in displaying all the necessary information on the product. Proper labelling of the
key information on the product is useful in educating the buyer about the things which are

present within the underpants. Mr. Brown can significantly file lawsuit against Underwear
Galore company on the grounds of not providing key relevant information to the customers. Mr.
Brown is going to be successful against the lawsuit filed in the name of the manufacturer. The
fault is considered to be on the part of the manufacturer. Mr. Brown will win the case in the
consumer law because this law tends to work in protecting the legal laws, rights and duties of the
customers. However, in compliance with the Australian consumer law, Mr. Brown stands correct
on his part as the manufacturer of the company has not informed the customer about the presence
of bisulphate soda (Hedges, Gilligan, G. and Ramsay, 2017). Hence, the company must focus on
taking necessary measure and compensate to Mr. Brown against the inconvenience caused to the
customer.
Week 8
Franchisee is an individual company which tends to hold a franchise for the sale of
services and goods of the particular company. This is the authorization which has been given by
the company to the group or an individual which helps in carrying out specific set of commercial
activities. Here, the franchisee acquires and also get access to the franchisor business process,
trademarks and knowledge (Ciro and Terzioglu, 2017). This way it helps in selling the products
and services under the specific business name.
Advantages of becoming a franchisee
Franchisee have access to the established business model and it is useful in patronizing
the brand which has good reputation and image in the eyes of customers within the market. The
franchisee has the advantage of gaining appropriate training and support in order to provide the
best possible success to the formula to the company (Baumfield, 2018). The franchisee also has
the key relevant advantage of the shouldering off the cost associated with the marketing because
it is the already established business in the eyes of customers. It provides Franchisee with
reduced risk of fail of the business and providing with the better exit plan in case of franchising
the company.
Disadvantages of becoming a franchisee
The franchisee has to pay initial fee, marketing fee and royalty to the franchisor. Another
key limitation associated with the business is that, no modification can be done on the part of
franchisee.

Hence, underlying reason behind this is that, the person should consider franchise
business than opening up the new own business (Advantages and Disadvantages of Being a
Franchisee, 2018). It helps in eliminating the procedure of starting the business from the scratch
and create reputation in the eyes of customers. It also helps franchisee with low initial cost
investment when compared with the opening up of the own new range of business. One of the
key significant reason for considering the franchise business is because it has established
goodwill and reputation within the market.
Week 9
Salomon v A Salomon & Co Ltd [1897] AC 22 states that, the organization is formed by
effectively adhering with the key regulation of the Corporation act. The House of Lord decision
states that, the company has separate legal entity where the right and key obligations are distinct
when compared with that of a shareholder and owner (Baumfield, 2018). Corporate veil is
specific idea of separating the personality of the corporation from that of the owner and
shareholder of the company. This way it helps in protecting the individual owner and the
shareholder to protect them from being personally liable for mitigating the debt and various other
obligation associated with the company. The lifting of the corporate veil is referred to as the
legal decision which helps in treating the right of the company as the legal right of the owner and
shareholders of the organization. Under the circumstance of fraud and improper conduct by the
key members, owners and shareholders the corporate veil can be lifted. In such a scenario, the
principle of Salmon is not applied in order to escape the liability of the person (Gray,
Harymawan and Nowland, 2016). The lifting of the corporate veil is considered to be as one of
the key legal decision which is useful in complying it with the legal laws and duties of the
company.
Week 10
Term member and shareholders
A member within the company is an individual who subscribes to the memorandum of
the company. On the contrary, a shareholder is considered to be a person who tends to own the
shares of the organization.
Who is eligible to become a member
 Subscribing to the Memorandum of the company is one of the key eligible way which
helps the individual to become the member of the organization.

 The person who is 18 years and above and a person of a sound mind is eligible to become
the member of the company (Hargovan, 2017).
 They must not have any unlawful or any activity which in turn has been carried out. No
past criminal record. Transmission of shares and director agreeing up to qualify for the shares is one of the key
significant factor which helps in becoming the member of the company.
Evaluating the number of members a company is permitted to have.
In Australia, the maximum number of members for the proprietary company is 50. On the
other hand, a public company tends to have a clear structure of more than 50 members within the
organization (Dixon and Hill,, 2018).
Examining how person ceases to be a member of the organization.
 The person cease to be a member of the organization, if the member transfers the share of
the company to another person and the transfer has been registered within the
organization. Then the name of the member is removed.
 When the shares of the member has been forfeited validly, surrendered and sold to the
company to impose the lien for unpaid calls. Hence, this results in ceasing of the
membership within the company (Harris, Hargovan, and Adams, 2018).
 In case the member of the company dies, this eventually leads to cessation of the
membership within organization.
 By transferring of the membership to the other person results ion the cease of the former
member within the company.
CONCLUSION
It has been summarised that, The duty of care ensures that company carry out business in
a reasonable manner without harming the customers. The Australian consumer law protect the
rights of the customers. Corporate veil is specific idea of separating the personality of the
corporation from that of the owner and shareholder of the company. In Australia, the maximum
number of members for the proprietary company is 50.

REFERENCES
Books and Journals
Baumfield, V.S., 2018. How Change Happens: The Benefit Corporation in the United States and
Considerations for Australia.
Chen, V., 2019. Enforcement of directors’ duties in Malaysia and Australia: the implications of
context. Oxford University Commonwealth Law Journal, 19(1), pp.91-117.
Chen, V., Ramsay, I. and Welsh, M.A., 2016. Corporate law reform in Australia: An analysis of
the influence of ownership structures and corporate failure. Australian Business Law
Review, 44(1), pp.18-34.
Efrat, Z., 2016. Piecemeal corporate law reforms adding to complexity. Governance
Directions, 68(6), p.326.
Ciro, A. and Terzioglu, B., 2017. Corporate philanthropy in Australia: Evidence from Australia's
top 100 listed firms. Australian Journal of Corporate Law, 32(1), p.27.
Dixon, O. and Hill, J.G., 2018. The Protection of Investors and the Compensation for their
Losses: Australia. European Corporate Governance Institute (ECGI)-Law Working Paper,
(421).
Gray, S., Harymawan, I. and Nowland, J., 2016. Political and government connections on
corporate boards in Australia: Good for business?. Australian Journal of Management, 41(1),
pp.3-26.
Hargovan, A., 2017. Corporate law: Foreign directors of Australian companies put on notice: No
leniency for ignorance of duties. Governance Directions, 69(1), p.37.
Harris, J., Hargovan, A. and Adams, M., 2018. Australian corporate law. LexisNexis
Buttwerworths.
Hedges, J., Gilligan, G. and Ramsay, I., 2017. Banning orders: an empirical analysis of the
dominant mode of corporate law enforcement in Australia. Sydney L. Rev., 39, p.501.
O'Brien, L., Ramsay, I. and Ali, P., 2018. The hidden dimension of business bankruptcy in
Australia. Australian Business Law Review, 46(5), pp.291-306.
Online

Advantages and Disadvantages of Being a Franchisee. 2018. [ONLINE]. Available
through:<https://www.detailxpertsfranchise.com/blog/2016/04/13/advantages-disadvantages-
franchisee-infographic/>