Business Law: Contract Law and Company Law Analysis Report

This report addresses two key areas of business law: contract law and company law. The contract law section examines an exemption clause issue, focusing on whether a party is bound by a clause in a signed receipt, considering the principles of L'Estrange v Graucob and the impact of misrepresentation. The company law section explores directorial duties, specifically whether a director breached duties by acting on an improper motive, and whether a shareholder has grounds for legal action. The analysis references relevant cases, including ASIC v Hellicar and Howard Smith v Ampol, to assess the director's actions in relation to shareholder interests and the company's overall objectives. The report concludes with recommendations regarding the enforceability of the exemption clause and the shareholder's rights to take action against the director.

BUSINESS LAW
CONTRACT LAW
EXEMPTION
CLAUSE
COMPANY LAW
DIRECTORS DUTIES
MEMBERS ACTIONS

The Contract Law Issue
 Does Jenny will have to abide by the exemption clause that travel
services have included in the contract?

Exclusion Clause
 The is is a kind of contract term which is included to
limit liability
 The term is an express term and thus is contemplated
before being a part of the contract
 This term requires prior and special notice for
incorporation
 The term is interpreted against the individual adding it
if it is ambiguous

The Rules
 L'Estrange V Graucob [1934] 2 KB 394 states that an individual who
entered a contract via signature have to abide by all the terms
mentioned in the contract even that individual claims that the terms
mentioned in the document has not been read by him.
 Curtis V Chemical Cleaning Co [1951] 1 KB 805- the applicant would not
be bound to this clause even the receipt was signed by her because a
misinterpretation was made by the staff about the receipt from the
applicant.
 Oceanic Sun v Fay [1988] HCA 32 – No prior Notice. A notice must be
provided beforehand or the time while the contract is being formed.

Application
 A receipt was signed by Jenny on whom the clause was there. The
implementation of the case L'Estrange V Graucob, states that an
individual who has entered in a contract via signature have to abide by
all the terms mentioned in the contract even that individual claims that
the terms mentioned in the document has not been read by him. Jenny
has to abide by those clauses.
 Curtis V Chemical Cleaning Co can be implemented in Jenny's situation
 No such notice was served to Jenny. The cases Olley v Marlborough
Court Ltd and Parker v South Eastern Railway supports the argument
because the court had denied the incorporation of exclusion clause with
no notice being served to other contractual party.

Conclusion
 Jenny will not have to abide by the exemption clause that the bus
service had incorporated in contract even the document was signed by
her as no such notice was served to Jenny and her signature was taken
via misinterpretation.

Company Law
 Company law is made to ensure smooth
functioning of the corporation business
structure
 The law imposes duties which directors have to
abide by
 The law also provides rights and obligations to
minority shareholder
 The law sets out remedies in case of breach

The Company Law Issue
 Issue
 The problem that needs to be addressed here in this situation is whether
Jacinta is subjected to any specific rights regarding the company.

 Sub Issue
 Whether any directorial duties in the S 181 were breached by Bill or not
for acting on an improper motive.

 Whether if Jacinta is capable of making claims that would result in
actions been taken against the directors.

The Rules
 Directorial actions that fall against the proposition of benefiting a
company that is making a profit cannot be taken into consideration as
an act done in good faith or proper purpose, as stated in the ASIC v
Hellicar [2012] HCA 17
 Howard Smith v Ampol[1974] All ER 1126 can be taken as an example
where it was stated by the court that if a said transaction did have two
purposes then the legitimacy of the act is cleared by checking the
purpose that seems dominant
 Under the S 232, such shareholder can take legal actions by appealing
to the court and the court hence will pass laws according to the S 233 of
the CA. Orders can range from simply purchasing shares from the
person who is effected to other specific orders.

The Application
 Any share of profits in dividends is not well specified by the organization.
Either way, it is up to the behaviour of the director that decides whether
share of dividends can be given or not.
 In the case mentioned, Bill’s actions are solely for an agenda directing
towards profit making; agreed upon by every shareholder. v Arderne
Cinemas Ltd (No 2) [1951] Ch 286 solidifies that the sole interest of an
organization must be to safeguard the best interests of the owners or the
shareholders of the company as a whole and not just the stakeholders or the
employees, Bill hasn’t shown any such responsibility towards shareholders.
 Hence, in the case in hand, the sole reason that both Jacinta and Yvette
aren’t bestowed the right to hold shares in the company is the sheer factor
or the fear that Bill has of their marital situation threatening the company in
some way or the other when in the near future they might have a divorce.

Conclusion
 Such an adverse decision can only be made by a person who doesn’t
have a proper purpose, and has hence violated the rules and regulations
that are mentioned in the laws and sections mentioned and studied
above.
 Jacinta has the right to make any derivation actions or cases necessary
against Bill for he has clearly breached the laws stated in S 181.