Corporations and Business Law Case Study: Agency and Partnership Law

This case study delves into two distinct scenarios within corporations and business law, focusing on agency and partnership. Part A examines the liability of a swimming pool company (Swimming Co) for the actions of its manager, Martin, exploring issues such as vicarious liability, breach of duty, and the implications of Martin's actions, including setting up a competing business. Part B analyzes a partnership (LuSeKo) involving Koo, Lucy, and Seamus, addressing issues like partnership formation, liability for business debts, breaches of partnership duties (Lucy's weekend work), the impact of a partner's death, and the determination of partnership property. The case study applies relevant legal principles, including those from the Partnership Act 1963, to provide comprehensive conclusions on each issue, supported by case law and statutory provisions. The study also examines the responsibilities of partners, the rights of third parties, and the consequences of actions that deviate from the established partnership agreements.

CORPORATIONS AND
BUSINESS LAW
CASE STUDY ASSIGNMENT

Part A

Issues:
Whether the Swimming Co is responsible
for the acts of Martin?
Whether it can be claimed by the company
that they are not liable for Martin’s act as
he acted without instructions?
Whether Martin is liable for any of his
actions to his employer?
Whether Martin has caused the breach of
any law if he has planned to establish his
own business.

Rules:
The law of agency deals with relations that
includes a person known as the agent who
has been authorised to act on behalf of
another known as the principal to make
transactions with an outsider known as the
third party.
An agent acting within the authority
conferred to him by the principal binds the
principal and makes him liable for the act
done by the agent as observed in the
famous Panorama Developments
(Guildford) v Fidelis Furnishing Fabrics Ltd.

Rules (Contd.)
Any illegal or misconduct committed by
the agent will make his principal liable to
the 3rd party who can claim damages
under the law of tort if the agent has
performed such act within the authority
he has been entrusted with as observed in
the case of Deatons Pty Ltd v Flew.
The principal can deny his liability for any
wrongful act committed by the agent
when the agent has acted beyond his
authority or without any authority

Rules (Contd.):
The agent also has a fiduciary duty
towards his principal such that he acts n
good faith to ensure best interest for his
principal and to act in accordance to the
directions of his principal as entrenched in
the case of Caltex Oil (Australia) Pty Ltd v
The Dredge Willemstad.
The agent is prohibited to incur any
personal advantages in course of his
transactions as an agent.
The agent is barred to set up a business in
competition to that of the principal.

Application:
Swimmingpool Co employed Martin as a
manager of Tasmanian sale division to
quote to the potential customers of
installation cost of different varieties of
pools offered by the company.
He had to ensure that a deposit is to be
paid by those customers which is be
transferred to the company’s bank account.
The Company offered him fixed salary but
allowed to get bonus provided the annual
target was achieved by him. These can be
regarded as a relation of agency between
the Martin and the company.

Application (Contd.)
Martin had contracted with 20 customers and
half of their work had tarted. But one month
after this, the company got many complaints
that the construction work of the pool was quite
different from what the customers are
contracted for. These arises out of the
employment of the agent in the company, thus
the company is vicariously liable for this.
Martin did not deposit in the bank account the
profits collected by him. This can be regarded
as the act of disobedience by the agent as he
did not follow the instructions given to him by
the company.

Application (Contd.):
Martin attempted to set up a similar type of
business to compete with the company. This
accounts for a breach of his duty as an agent.

Conclusion:
Swimming Co is responsible for the acts of
Martin when he acted within his authority of
agency.
The company can claim definitely that they are
not liable for Martin’s act as he acted without
instructions.
Martin is liable for his act towards employer
Company.
Martin had breached the non compete law as
he had planned to establish a similar business
like the Company.

Part B

Issues:
a) whether Koo, Lucy and Seamus are carrying on
partnership,
b) Whether Koo and Lucy can be made liable to
contribute for purchase of the ride on mower,
c) Whether Lucy has breached his duties of partnership
for carrying out her weekend work,
d) whether the FastCut can discover the individuals
present behind the business name LuSeKo in a legal
action,
e) Whether Seamus’s death can affect the partnership
in any way,
f) Whether Lucy and Koo can determine the partnership
property and whether the partnership property can be
used to compensate the losses made to LuSeKo.