Law 504: In-depth Report on Contract Law and Partnerships

This report analyzes two legal scenarios related to contract law and partnerships. The first scenario involves an agency relationship where an agent, Brad, disregards the principal's (Tina's) instructions, leading to a breach of contract with Caltex. The report explores the Contract Act, 1872, outlining remedies such as recession, damages, injunctions, and specific performance. The second scenario concerns a partnership where Simon enters into contracts exceeding the agreed-upon limit without consulting his partners (George, Sara, and Mary). The report examines the Partnership Act 1963, emphasizing partnership agreements, partner liabilities, and the consequences of breaching the agreement. The analysis covers issues, relevant laws, and applications, providing conclusions for each case, including case references like Balfour and Balfour and Carlill vs. Carbolic Smoke Ball Co, and how they relate to the scenarios.

Law 504

Table of Contents
QUESTION 1...................................................................................................................................1
QUESTION 2...................................................................................................................................2
REFERENCES................................................................................................................................6

QUESTION 1
Issues:
Tina has appointed Brad as a checkout operator in her garage but due to some medical
issues, she has to take leave from work and meanwhile appointed an individual named Brad to
act on her behalf where he was responsible to order petrol (Barker, 2006). Brad started ordering
fuel from Caltex every fortnight. When Tina returned from her illness, she instructed Brad that
from now onwards, he should not order petrol from here and these matters will be conducted as
before she took leaves for not being well. However, Brad ignores the instructions and continued
ordering fuel from the same place. As an agent, it was Brad's duty to follow Tina's instruction.
When Tina gets to knew this situation, she called Caltex and told them that there was no such
contract between them and Brad has breached the contract of agent and principal. In the present
case, it has been assessed that the main issue that raised over here was in relation to identify
effective solutions for Tina with proper instructions. These are required to be given to her as a
way of overcoming the issues in relation to the placed order that violated the agreed clauses
(Drobac and Page, 2006). Another issue raised over here was in regard to the violated norms of a
newly appointed salesman named Paul where he purchased a vehicle from Tina with falsified
reasons at low cost and sold to another person at high price. Therefore, Paul is liable for his
action as he has breached the contract and thus, Tina could sue him by together asking him for
penalty (Clarey, 2007). In the present case, issue has been faced within Tina and Paul as Tina
appoints Brad and identifies that during her work off, Brad perpetually ordered fuel from Caltex
every fortnight. However, Tina returns from her illness and told Brad not to order petrol from
Caltex any more as now she is well. The issue arise because Brad denies following Tina's
instructions and carry out contract with oil companies and hence it created issue for the
company. Later, Tina called Caltex and denies the contract between her and Caltex stating that
Brad was an acting party when the instruction were placed of petrol order.
Law:
Contract Act, 1872 governs the rights and obligations of both the principal and the agent.
Agent is a person who is appointed by the principal to act or represent on behalf of him. But
every person cannot be treated as agent unless and until he works for the principal. In case we
have to check whether person is an agent or not we can simply check by whether he acts for
himself or for behalf of principal (Glennon, 2006). In case if the person is personally liable for
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the contract he cannot be termed as agent. If there is a breach of contract between agent and
principal, the work performed by the third party will be taken into consideration if he was not
aware about the breach of contract.
Application:
Contract Act, 1872 provides remedies for breach of contract. They are
1. Recession of the contract: When any one of the party breaches the contract, then another
party can rescind the contract with suit for damages (Vestal and Rutledge, 2006).
2. Suit for damages: Aggrieved party can ask for monetary compensation in case of
breach of contract. But in this case aggrieved party has to prove actual loss or
damages to gain monetary compensation. Thus, at the time of breach of contract, the
loss for damages are occurred by the party who is liable for the acts. Therefore, they
need to undertake effective legislation so that Paul could be punished (Larkin, 2007).
3. Suit for Injunctions: When a court restrains a person from doing a particular act if he
breaches the conditions of contract.
4. Suit for Quantum Merit: In this injured party can claim compensation in accordance with
work performed or supplied to the party (Mallender and Rayson, 2005).
5. Suit for Specific Performance: This suit is regulated by the SPECIFIC RELIEF ACT, 1963
which governs party to perform the contract as it was agreed. This suit is granted when monetary
compensation is not adequate as a relief for breach of contract (Bi-hua, 2007).
Conclusion:
Given that Brad and Tina had an agent and principal relationship which was known by
Caltex, he performed in accordance to it with Brad. But when Tina restrained him from
performing duty, he still continued to perform same duty without following Tina instructions.
Caltex was not informed about Brad been restrained from performing such duty. So he continued
his work with Brad. So Tina is liable for the contract. It can be concluded that both Brad and
Tina possess the relational of principal and agent and therefore they are under the obligation to
carry out the duty and responsibilities as per their relation (Slack, 2007). Here, Paul breaches the
contract as he sells the vehicle to Fred for $25000 on high amount and thus it affects the contract
act.
There together exists some factual case scenarios to be studied to clearly interpret the
factual existence of Contract Act, 1872. These are Balfour and Balfour where it has precisely
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illustrated a domestic agreement. It has depicted the relationship among a husband and his wife
who went England to spend holiday's. However, only the husband returned to their native place
by asking his wife to remain in England due to her health related issues and committed to send
her a monthly allowance of $930 as her maintenance expense. Later, certain differences among
them resulted into their separation by duly converting the allowances into arrears and the wife's
case for retrieval was duly rejected by court due to the existence of a non intended contract.
Another factual representation has been made in the case of Carlill vs. Carbolic Smoke
Ball Co where it raised out of a general offer made by the company by openly advertising it in
the newspaper. It was a healthful medicine proposed for the treatment of influenza with a
guaranteed outlook of getting rid of the disease and in case of failure, the company promised to
pay a compensation of $1000. One of reader successfully met all the given instructions of using
the medication and claimed the company for recompense as she was not cured as per their terms.
However, the company denied to pay and whose basis, the customer sued them and was declared
to be entitled for the compensation by the court.
QUESTION 2
Issues
It can be evaluated from the case that Simon, George, Sara and Mary were all employed
by different IT companies and thus they felt to start their own business to do better. In regard to
this, they pooled their available cash, and other resources in order to start partnership business
with each other. Hence, for this they carried out a partnership agreement that stated that each
partner possess the authority to enter into the transactions on behalf of IT company named
Computer Solutions (Winickoff, 2007). Company carries out the operations of storing data for
customers. Here, as per the agreement the partners possess the authority to enter into contracts of
up to $ 10000 but any contract above that requires to be approved unanimously by all the
partners. Here, the issue arised because Simon enters into agreement without referring back to
the partners firstly for a 500 TB storage drive on behalf of Computer Solutions from Sunstar
Computer Hardware Ltd which costs $12000. While, another agreement entered was for a
second hand ute costing $9000 that was bought from You Beaut Ute Ltd. However, the issue
arise because of purchasing such product without any information to other partners and thus they
reject the acceptance of the product (Hixson, 2009). However, as per the partnership agreement
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the contract of $9000 need to be accepted because it is mentioned in the agreement that contract
above $10000 will require approval from all the partners.
Law
Here, Partnership Act 1963 has been applied that results in identifying the encompassing
of different criteria and determine the presence of partnership. It involves a valid agreement
between the parties and carry on a business so that transaction could be carried out effectively in
the form of joint venture (Minkler and et. al., 2008). Partnership in common assesses that there
must be some mutuality of rights, agency, interests and obligations. Also, partnership is
considered from the view point of profit and thus it helps in developing effective structure so that
they could share profits, liabilities etc. and thus treat different individuals accordingly. Each and
every partner possess certain liability so that they could hold out to be a partner in regard to carry
out effective agreement and thus results in providing appropriate work and thus they could be
held responsible in both ways i.e. legally and financially for the actions of the other partners.
Another law that is being carried out is limited partnership and thus indicates that the liability of
limited partner is limited but here all the partners are equally responsible and liable for their
actions as they mutually agreed to enter into the contract (Barker, 2006). However, if any of the
partners does not carry out his/her operations effectively than dissolution of partnership occurs
and thus identify the change in the relationship of the partners as a result of partner ceasing to be
linked of part of carrying out business. Here, Partnership Act has been adopted that results in
identifying the legal actions which need to be created among parties before creating legal
agreements and thus it is significant for them to undertake effective practices so that it does not
impact upon them.
Application
It is essential for creating partnership agreement and setting up the proper business
structure and thus it results in developing appropriate partnership process. Therefore, in order to
implement all such step it helps in providing proper partnership designing and thus carry out
effective agreement so that it does not impact upon the parties. As mentioned in the partnership
agreement, all the parties are required to enter with mutual consent at the time of purchasing any
product within firm (Drobac and Page, 2006). Therefore, it does not impact upon the operations
of firm as well as it maintains effective partnership with each other. However, partner roles in
signing and authorizations results in providing authority to all the partners so that they could
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carry out the operations on behalf of firm. Also, each and every partner possess effective duty
and responsibility in relation to implement the actions and thus every partner determines their
roles and duties so that their expectations could not be affected. Also, it is significant for partners
to carry out effective regulation so that unanimous decision and thus tool the decision all
together (Clarey, 2007). Therefore, it is essential for partners to carry out the agreement with the
provision of each other and thus do not affect their partnership agreement. However, the George,
Sara and Mary could file a case against Simon to breach the partnership agreement through
entering into the contract with Sunstar and You Beaut Ute Ltd for making the contract of more
than the stated amount as per the agreement. All the parties who are involved within the
agreement requires identifying the partnership agreement and then identify the terms and
conditions so that work could be carried out upon partnership engagement. However, if it is not
being carried upon the stated act than it might impact upon the performance of business.
Conclusion
It can be concluded from the study that George, Sara and Mary needs to be protected
against the case filed by Sunstar Computer Hardware and You Beaut Ute Ltd so that they could
not get affected due the action of Simon. It is because they have clearly mentioned in the
partnership agreement that when purchasing any product or entering into any contract that is of
high amount $10000 or above (Glennon, 2006). Thus, it has been clearly stated within the
agreement that contract of above $10000 need to be unanimously approved by all the partners.
But Simon enters into the contract without any knowledge of other partners. Therefore, George,
Sara and Mary could refuse to accept the delivery of both the storage decide and take appropriate
action as the partnership has been sued by Sunstar Computer Hardware Ltd and You Beaut Ute
Ltd. Thus, as per the partnership agreement, George, Sara and Mary are advised that they are
liable to refuse the delivery of the storage drives as they are not informed about accepting any of
such product and also they are not liable to be sued by the suppliers as they are not known about
any such delivery of storage drives (Vestal and Rutledge, 2006). Thus, it is essential for
partnership business to carry out effective structure of limited liability company (LLC) and thus
realize that through identifying the unique situations it results in carrying out effective
partnership agreement so that action of one individual could not affect the agreement (Larkin,
2007).
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REFERENCES
Books and Journals
Barker, N., 2006. Sex and the civil partnership act: the future of (non) conjugality?. Feminist
legal studies. 14(2). pp.241-259.
Bi-hua, Y.U.A.N., 2007. Legislative Defects and Improvements on the System of Limited
Partnership in the New Partnership Act [J]. International Economics and Trade Research.
6. pp.017.
Clarey, E., 2007. New Jersey Domestic Partnership Act in the Aftermath of Lewis v. Harris:
Should New Jersey Expand the Act to Include All Unmarried Cohabitants. Rutgers L. Rev.,
60. pp.519.
Drobac, J.A. and Page, A., 2006. A Uniform Domestic Partnership Act: Marrying Business
Partnership and Family Law. Ga. L. Rev., 41. pp.349.
Glennon, L., 2006. Strategizing for the future through the civil partnership act. Journal of Law
and Society. 33(2). pp.244-276.
Hixson, T.A., 2009. Revised Uniform Partnership Act. W. New Eng. L. Rev. 31. pp.797.
Larkin, E., 2007. What's in a Word-The Effect on Partners' Duties after Removal of the Term
Fiduciary in the Texas Revised Partnership Act. Baylor L. Rev. 59. pp.895.
Mallender, P. and Rayson, J., 2005. The Civil Partnership Act 2004: A Practical Guide.
Cambridge University Press.
Minkler, M. and et. al., 2008. Promoting environmental justice through community-based
participatory research: the role of community and partnership capacity. Health Education
& Behavior. 35(1). pp.119-137.
Slack, S., 2007. Church autonomy and the Civil Partnership Act: a rejoinder. Ecclesiastical Law
Journal. 9(2). pp.206.
Vestal, A.W. and Rutledge, T.E., 2006. Modern Partnership Law Comes to Kentucky:
Comparing the Kentucky Revised Uniform Partnership Act and the Uniform Act From
Which it was Derived. Ky. LJ. 95. pp.715.
Winickoff, D.E., 2007. Partnership in UK Biobank: a third way for genomic property?.
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