Legal Analysis: Australian Contract and Corporation Law Project (2024)

This project analyzes Australian contract and corporation law through two case studies. Part A focuses on contract law, specifically implied terms, examining a scenario where Belinda seeks legal advice regarding a misrepresented car purchase. The analysis covers contractual rights, including those related to fair trading, and the potential remedies available to Belinda. Part B delves into corporation law, specifically partnerships, using a case involving three friends (Lucy, Seamus, and Koo) who run a mowing service (LuSeKo). The case explores partnership formation, liabilities (such as the purchase of a ride-on mower), breaches of partnership duties, and the implications of a partner's death. It addresses questions about the partners' responsibilities, the discovery of involved parties in a legal action, and the impact of Seamus's death on the partnership. The project aims to apply legal principles to practical scenarios, providing a comprehensive understanding of both contract and corporation law within an Australian context.

PROJECT

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART-A- CONTRACT LAW................................................................................................1
1. Implied Terms....................................................................................................................1
Legal advice Belinda for her Contractual Rights...................................................................2
PART-B- CORPORATION LAW.........................................................................................3
2. Case Scenario on Partnership.............................................................................................4
(a) Are Lucy, Seamus and Koo carrying on a partnership?...................................................4
(b) Will Lucy and Koo are liable to contribute to the purchase of the ride-on mower?........4
(c) Is Lucy in breach of any partnership duties?....................................................................4
(d) If FastCut commence a legal action against LuSeko, how they will discover who are
involved behind the business name?......................................................................................5
(e) What effect will Seamus's death will have on the partnership?........................................5
(f) How Lucy and Koo determine what is partnership property? How it will be used to meet
LuSeKo's losses?....................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Laws are very important to perform every task in legal manner. Present report will study
about contract and corporation law in Australia. Contract laws are those which deals with the
legal aspects of a contract that has been made between two or more people. Australian contract
law is primarily governed by the common law. In Australian corporation law, it consists of a
single, national statute, the Corporations Act 2001. The statute is administered by a single
national regulatory authority, the Australian Securities and Investments Commission (“ASIC”).
Report is divided into two parts, i.e., Part A and B. In Part A, it will focus on contract law, in
which implied terms will be explained in details. In Part B, corporation law will be discussed in
which it will focus on Partnership.
MAIN BODY
PART-A- CONTRACT LAW
Australian contract law is the rights and obligations of parties to a contract which
determines terms of particular contract. It can be in a written form or can be done orally. There
are basically two different terms that are present in the Australian contract law, such as, express
and implied terms. The study is based on case which is focused on implied terms of contract law.
1. Implied Terms
As per the contract law, Australia, implied terms are those terms in which law is implied
into a contract without being discussed by the parties. It can be implied at common law or by
statue respectively. An implied contract is one in which some terms are not expressed in words
(Terms of a contract, 2017). There are various statements which has been made in implied terms
in contract law, which are explained below:
 Representation: It is a type of statement in which it is used to bring forth another person
to enter into a contract with another person. In this representation, there are chances that
the statement is incorrect. But this situation of incorrect statements in a contract can be
considered as a case of misrepresentation. This gives rise to no contractual obligation in
the contract law.
 Mere representation: These are those representations which are not included in the
contract law or its statements. Mere representation that not true or are incorrect is termed
as misrepresentation or mere misrepresentation (Express and implied contracts, 2012).
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 Puff: Puff is that situation in which one accepts the contract without any standard
conditions to be considered. In this case, if the statement is proven to be incorrect or
wrong than there will no action taken against that contact which is being made. There is
no solution of this situation if the contract is false or incorrect.
 Term: These are terms that have been implied into standardized relationships in a
contact. This is considered to be similar to the representation. Actual term in a contract
law is only known by the person who made the statement (McKendrick, 2014). Condition: This is that part in implied terms of contract law which determines different
conditions that has to be considered while making a contract or statements.
2. Case scenario
In the given case scenario, it is mentioned that Belinda wants to buy a second hand car
for herself. She went to an American car sale where a sales person Jaxson convinced her to buy a
new 1998 Ford Mustang. Few months later she realized that her care was in fact made in 1994
and she has paid about $5000 more than the actual market value of that care.
Legal advice Belinda for her Contractual Rights
According to contract law and Consumer Act, Contractual rights are those principles with
the aid of which a set of rights are given to people who are entering into a valid contract with
another person. These type of rights usually includes elements like, business related issues or
problems, etc. They are clearly stated in the contract to avoid any future disputes, and all the
parties involved are liable to abide them (What Are Contractual Rights, 2014). There are various
types of contractual rights which include:
 Rights to the person against purchase of any particular product or service,
 Give rights to sell any product or service,
 Rights to be the only seller or buyer,
 It gives rights to get the delivery and timely payment,
 It also provides rights to refunds or repairs if required,
 Various rights according to the specific intentions of each party is also given to the
person (Edwards, 2017).
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There are Implied Contract Rights as well other than the contact right according to Fair
Trading Act 2012, which helps an individual in various ways:
 Good Faith and dealing: This can have a huge impact in contract law. Each party that is
involved in the contract is expected to operate according to good faith and fair dealing.
This will help in minimizing the chances of getting legal issues or problems. They should
provide all the information which is very essential before making any contract (What Are
Contractual Rights, 2014).
 Right to be free from any contract fraud: This helps in protecting individual from
misrepresentation or mere representation of information in a contract. A contract that is
formed under force (i.e., forcing one party to sign the papers of contract) is termed as an
invalid contract (Smith, 2018).
Based on the above information given, in this case, Belinda can claim on the company
American car sales to return their money which she has paid extra for her 1994 ford Mustang or
either she can claim to exchange their car with the actual 1998 Ford Mustang car. In the
Australian Consumer law, it offers protection against unfair contract terms and it is important for
the consumer to always read contracts carefully before signing any contract. This will help them
in getting cheated.
With the help of Australian contract law, Belinda has legal rights to get her amount back
which she has paid extra to the car company and can also hire a case against the sales person
Jaxson who has misrepresented her about the car and also provided her the wrong information
about the car. Also, it is clear from the case that she has paid some $5000 amount extra for the
car which has to give back to her. She also has a right to give the car back to the American car
sales and get all his money back.
PART-B- CORPORATION LAW
According to Corporations Act 2001, Corporation laws are very important for any
organization to run their business successfully. It includes various laws and acts which comes
under this law, such as, it consists of a single, national statute, the Corporations Act 2001, etc. It
is also known as business law as well. It has various forms of law, such as, corporation, limited
liability partnership, sole proprietorship, partnership, etc. This study will focus on Partnership
(Corporations Act 2001 - Federal Register of Legislatio,. 2015).
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2. Case Scenario on Partnership
According to the given case, Lucy, Seamus and Koo are three friends who wants to run a
business to earn some income for their studies. They have started a business named LuSeKo
mowing Services and had also registered their business name in the list. Within a short span of
time their business got regular clients as well. After sometimes, Seamus thought that they should
buy an industrial ride-on mower and he ordered one from FirstCut Mower on behalf of LuSeKo
and not even told Lucy and Koo about this purchasing. Meanwhile, Lucy has started her own
business relationship with the clients of LuSeKo without informing other two and depositing the
amount in her personal account. They got the delivery of the machine but are unable to pay the
amount as they don't have enough balance in account. Meanwhile, while operating the mower,
Seamus hits the stump and got flung in the rotating blades of the machine and died.
(a) Are Lucy, Seamus and Koo carrying on a partnership?
From the above case, it’s clear that they are operating their business in a partnership as all
three has contributed something in the business, such as, Seamus cuts the grass, Lucy removes
the clippings from her truck and Koo operates the accounts of their business LuSeKo
respectively. They have also registered it with this name in the partnership business list. Also,
they are depositing the earned amount in the joint account which they have in the name of
LuSeKo. As in partnership business all the members that are involved in the business are liable
for all the happening that is being performed.
(b) Will Lucy and Koo are liable to contribute to the purchase of the ride-on mower?
As they all three are operating their business, so according to the partnership act of
corporate law, Lucy and Koo are not liable to pay for the ride-on mower as they were not prior
informed about this purchasing of new machine for their business. Being in a partnership
business, Seamus is responsible to inform all the partners about this before taking any action
related to their business as they have to make combine payment from the account of LuSeKo.
Lucy and Koo can say no to pay the amount for that machine as they were not known or
informed about the purchasing of this machine by Seamus. It is the responsibility of the Saemus
to pay the whole payment to the FastCut Mowers company.
(c) Is Lucy in breach of any partnership duties?
In a partnership business, it is very important to stay loyal in the business as it can affect
their company a lot. In this case, Lucy was cheating with the other two members, i.e., Seamus
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and Koo respectively. Lucy was operating its own private business by making relationship with
the clients of their own business LuSeKo. All these clients pay cash to Lucy which she deposits
in her personal bank account. In a partnership business, it is illegal to start their own with
informing other members about that. Lucy was secretly operating her business in weekends only
when both Seamus and Koo were engaged in their studies, so that they do not get any hint about
this.
(d) If FastCut commence a legal action against LuSeko, how they will discover who are
involved behind the business name?
According to the case, LuSeko were unable to pay the whole amount to the FastCut
mower as they don't have enough money in their account. So, if FastCut claims a legal action
against their company, FastCust Mower can get all the information from memorandum of
association which will have all the policies mentioned in it and from article of association they
can get all the details of LuSeKo and about its members, which can be very helpful for FastCut
to identify all the names that are involved in the business so that they can get their due amount
for the ride-on mower machine (Chen, Ramsay and Welsh, 2016). As they have registered their
name in the list to get it registered legally. In this way FastCut Mower can recover the purchase
price of that machine as all three partners are equally liable for every business concerns.
(e) What effect will Seamus's death will have on the partnership?
In partnership if any business dies it can have a huge impact on the company. This can
also create huge disturbance in their business activity as all the transition poses a serious issue
for business if they are haven't prepared for it. Seamus death was a shock for both Lucy and Koo
as they all three were close friends. There is chance that their business can get closed. From The
Partnership Act, 1892 under a contract between the partners the firm is not dissolved by the
death of a partner. (Partnership Act 1892, 2015). From the death of Seamus, business can have a
huge impact, such as, their partnership ratio will get affected. And all the investment that has
been made in the business will also be get disturbed.
(f) How Lucy and Koo determine what is partnership property? How it will be used to meet
LuSeKo's losses?
Partnership property is a type of property which can be used by any member of the
partnership business for partnership purposes unless there is an agreement to the contrary. In
partnership, they can have their personal property or they can own a property and each partner
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has an equal right on that which (Partnership, 2018). Lucy and Koo can determine from the fact
that they are using the whole property for their business that is why they are in a partnership
property. This partnership property has a huge impact on their business so it is very essential for
them to maintain it properly.
CONCLUSION
From the above report it can be concluded that it is very important for any person to
follow all the legal laws and regulation which are necessary to address business operations
effectively. This report has explained about the contract law and its impact on the person. It has
also focused on the corporation law in which it explained about partnership and its impact on
business with the example of a case scenarios based on partnership.
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REFERENCES
Books and Journals
Chen, V., Ramsay, I. and Welsh, M., 2016. Corporate law reform in Australia: An analysis of
the influence of ownership structures and corporate failure.
Edwards, A.H., 2017. Leading cases in contract law [Book Review]. Bar News: The Journal of
the NSW Bar Association, (Summer 2017). p.61.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Smith, J., 2018. Contract law in Australia [Book Review]. Ethos: Official Publication of the Law
Society of the Australian Capital Territory. (248). p.60.
Online
Corporations Act 2001 - Federal Register of Legislation. 2015. [Online]. Available through:
<https://www.legislation.gov.au/Details/C2017C00328>
Express and implied contracts. 2012. [Online]. Available through:
<https://lawexams.com/implied-contracts>
Partnership Act 1892, 2015. [Online]. Available through:
<https://classic.austlii.edu.au/au/legis/nsw/consol_act/pa1892154/s9.html>
Partnership. 2018. [Online]. Available through: <https://legalvision.com.au/what-happens-to-
the-partnership-if-my-partner-dies/>
Terms of a contract. 2017. [Online]. Available through:
<https://www.australiancontractlaw.com/law/scope-terms.html#implied>
What Are Contractual Rights. 2014. [Online]. Available through:
<https://www.legalmatch.com/law-library/article/what-are-contractual-rights.html>
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