HI6027 Business and Corporate Law Case Study Analysis

This case study analyzes two scenarios related to business and corporate law. The first case explores the legal principles of contract law, focusing on offer, acceptance, and revocation, using the cases of Carlill v Carbolic Smoke Ball Co, Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd, and Harvey V Facey to support the analysis. It examines whether a consumer, Michael, can claim a prize from a restaurant chain and whether another consumer, Brett, can claim a prize. The second case investigates the duties of company directors, particularly focusing on diligence, care, and the proper exercise of power. It assesses the potential liabilities of a director, Sarah, under the Corporations Act 2001, including the consequences of breaching her duties. The analysis considers Sarah's actions in relation to a loan transaction and the implications of her exceeding her authorized transaction limit. The assignment highlights the importance of understanding legal principles in business operations and the responsibilities of corporate directors.

Corporation Act
Name of the student
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(i)
Rule:
 The contractual terms rely on the agreement that provides the terms and conditions that
is required to be fulfilled by the parties of the contract.
 A agreement is developed when an offer is provided to any of the parties involved in a
contract.
 There should be presence of intention to enter the contract.
 While acceptance of an offer is observed to be done with the absence of the situation by
the parties involved in a contract to the parties of the opposite side where the agreement
is developed it aids in developing a valid contract.
 Similarly the difference between proposal and invitation to proposal. Invitation to a
proposal can be said as a type of offer that is made for receiving a public response where
negotiation is involved.
 This statement can be supported by the case study of Carlill vs
Carbolic Smoke Ball Co.

 Revocation of produced offer is said to be considering when it will be taken back by
the parties of the contract giving the proposal.
 This situation takes place when the parties cancel the made offer.
 A legal revocation takes place when few conditions are fulfilled, firstly the made offer
must be withdrawn back before the offer acceptance takes place and the offeree must
be informed about the revocation
 it is not essential for the offeree to obtain the information that will be communicated.
 There is a presence of different types of offer, among which one type of proposal can
be stated as when the proposal or an offer is being accepted the way of performing a
task is stated as unilateral contract.
 This type of agreement or contract is generally observed when an offeror receives any
open request in term of payment from the offeror if the said act is observed to be
performed.
 The case study of Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205 FCA
can be consulted for supporting the following statement. Mobil Oil Australia Ltd v
Lyndel Nominees Pty Ltd (1998) 205 FCA

Application:
 The given case portrays the scene of SOO Burgers; the restaurant chain started a
competition of sale in order to accelerate their industry.
 In this situation they started the competition with a token attached to the packaging
of their item of burger.
 The condition and the terms of the chain of restaurant were that if any individual can
accumulate fifty tokens will be able to gain a scratch pass which can reveal a Mazda
car.
 The vehicle will be awarded to the winner that will be given by the SOO Burger’s
head office.
 A consumer named as Michael was interested in order to win the Mazda car.
 In relation to that he willingly bought 50m burgers and consumed all of them at once.
 As a result of consuming the SOO burgers at once he was admitted to a medical
clinic as he was exhausted.
 All of sudden when he was going to pass out he scratched all the fifty tokens for
getting the scratch card.

 The organization of the restaurant invented that there was a mistake in printing that has
resulted in the offer revocation and the organization broadcasted the offer to be void.
 The pronouncement was not made about the Mazda car directly, but he overheard it as
the nurses in the clinic was discussing the revocation of the offer.
 Post-hearing of the discussion Mickey got a scratch pass where he won a car.
 As a result of the consequences the news of the offer revocation took place where he
heard about the announcement before accepting the offer.
 Therefore due to the consequences Mickey cannot claim the car.
 Another case study of Harvey V Facey [1893] can be taken into consideration for
supporting the statements of the given case.
Conclusion
 The above stated provisions made it clear, that the facts explained about the given case is
that Mickey cannot claim the Mazda car form the from the organization of SOO burgers.

(ii)
Application:
 In the given case it is seen that the unit of the chain of restaurant of the SOO Burgers
enhanced the transaction of every unit by the way of promotion.
 In which a burger along with a token attached will be given to the consumers, where
the burger wrapper was attached with fifty tokens.
 The terms and condition were broadcasted as the consumers who will collect fifty
tokens will be given a scratch card which on scratching get win the Mazda car.
 It was stated that the winning Mazda car would be distributed from the head office of
the company.
 In the given scenario, Brett has scratched every token accumulated from the waste bins
the restaurant of SOO Burgers without purchasing any stuff from the chain of a
restaurant.
 The resultant of his act helped him to collect hundred tokens.

 Post scratching every token he won two cars.
 This method of winning is not lawful because of the approval of the produced offer as
he did not comply with every expressions and condition of the offer said.
 As a result no contract was developed between Brett and SOO Burgers.
 Therefore he will not be allowed for claiming the Mazda car.
Conclusion:
 The above stated statements make it clear that Brett cannot claim the Mazda car from
the organization of SOO Burgers.

Case 2:
Rule:
 Directors should utilize their power and control and should carry out to perform their
duties and responsibilities with the best interest and good faith of the whole
organization.
 The actual target of the duty of the director is to carry out their task along with an
honest manner for company’s well being according to the belief of the directors.
 The important behavior that is required to conduct a duty depends on the company’s
circumstances and with the responsibility and position of the director.
 Directors should utilize their control and power, and they should also carry out their
performance, role, and responsibilities with sufficient diligence and care.
 Similarly they should carry out their performance as the director of a particular
organization occupying the similar company.

 The main target of the board or the panel is to reward and appoint the company’s CEO
and also to formulate and approve the plan and strategies that will enhance the
company’s goal for running the business successfully.
 The annual budget is being planned by the directors of the company as they decide for
running the company in a most honest manner.
 They also judge the performance of the management and looks after the outcome of the
specific business.
Application:
 The outcome of this provided case depicts a suggestion that Sarah’s performance in the
position of the director is not lawful. Sarah has not performed any duties and
responsibilities with enough diligence and care.
 She can be held liable under section 180 and section 181 of the CA 2001.
 She can be punished up to $200,000 and can be held in prison for five long years. She
can also be debarred from managing any organization in the future.
 She has paid all the debts of the organization as her personal liability.

 The outcome of the given case can be suggested as Sarah has not been provided with
borrowing limit beyond the limit of the transaction provided by the company in her
contractual terms amounting to $30,000.
 As the director of the particular company she has been found in breaching the duty by
doing a transaction above the limit without consulting the panel or board of the
organization.
 The outcome would be same as the company has set the transaction limit of $30,000 for
the transacting as a director for the organization even if the loan amount would have
been given to the other two units of the clothing shop of Sparkling.
 The outcome of the given case would not stand same even if the loan department officer
would be careful about the expired appointment of Sarah and also about the limit of
transaction given to Sarah provided by the company.
 The officer of the loan department was not careful about the expired appointment of
Sarah as she was looking for a new job because of her expiration from the director’s
position.
 The Bank of Costello would not provide $30,000 to Sarah if they noted about the
transaction limit provided to Sarah in the contract as the company’s director.

Conclusion:
 The mentioned facts clearly stated above; it is clear that Sarah was not lawfully carried
out her task of the director.
 She has neglected to perform as a director with sufficient diligence and care along with
duties and liabilities.
 It can never be said that Sarah was good and decent director of the company.

Reference:
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205 FCA
Harvey V Facey [1893] A.C 552