Australian Commercial Law Assignment - LAWS20058, Term 2, 2018, Uni

This assignment on Australian Commercial Law covers various aspects of legal rules, case studies, and contract law. Part A focuses on Hart's analysis of legal rules and their role in protecting society. Part B examines different penalties in the Nepal and Australian legal systems. Part C analyzes a case related to a leasing contract, focusing on issues like breach of contract and remedies. Part D explores the Google Inc. v. ACCC case, addressing issues of fraudulent misrepresentation and deceptive conduct. The assignment provides a comprehensive overview of legal principles, case analysis, and application of relevant laws.

Running head: AUSTRALIAN COMMERCIAL LAW 1
Australian Commercial Law
Student’s Name
Institution Affiliate
Date

AUSTRALIAN COMMERCIAL LAW 2
Part A (5 marks- 300 words)
Based on Hart's analysis of legal rules, the key rules which help in protecting the
members of a tribe from the acts of violence which were developed typically fall under the
primary rules category. Such rules are known to impose obligations on individuals, and hence
they tend to place an obligation to conform to the behavior of the members of a particular
society. Additionally, the primary rules entail the prohibition of a variety of actions which
typically cause harm to the members of the tribe. Also, they are subject to crimes and the
imposition of hostile reaction from the members of the tribe. The key primary rules include rules
which need keeping promises and those which require honesty.1
The only way society could exist peacefully and without any form of violence would be
as a result of the establishment of the rules of obligation. Such rules would have a societal
control including the general attitude of a group of individuals towards its standard mode of
behavior and this in regards to the rules of obligation. He also argued that just a small fraction of
society knit by common belief, sentiment, and ties of kin would live peacefully with unofficial
rules. The primary rules had certain limitations, and this, therefore, led to the establishment of
the secondary rules to help in the application of such rules. Such limitations entailed, a static
character of the rules, uncertainty, and inefficiency of the rules. The secondary rules which were
developed were categorized into three that is the rule of recognition, change, and adjucation. The
rule of change encourages various individuals in the society to properly conduct themselves, and
this was considered as a tribal council. The rule of adjudication, on the other hand, helped to
create institutions that will make proper decisions on certain disputes relating to criminal acts
1 Anantaset, P. (2015). Liability for Advertiser and Internet Search Engine Service Provider: A
Case Study of Google AdWords. Thammasat Business Law Journal, 5.

AUSTRALIAN COMMERCIAL LAW 3
against another tribe. The above rules were developed to help maintain peace among the tribes
and hence prevent acts of violence in societies.2
Part B (5 marks- 300 words)
Based on the Nepal legal system, there are a variety of penalties which can be imposed
on the individuals found guilty of committing certain crimes and this is usually based on the type
of crime commited.The penalties entail, those relating to imprisonment and the options available
are minimum sentences, maximum sentences, and mandatory sentences. The maximum
sentences provide for the maximum sentences for all the crimes, and it helps in deciding on the
type of sentence to impose. The minimum sentences, on the other hand, give the least minimum
sentences. The other penalties imposed on an individual found guilty of a crime is fines. When
imposing the fines, the specific period for payment is issued. Another penalty is exclusion
orders, and curfews and the above penalties take the form of a conditional bail.
The Nepal legal system also uses the restriction on movement orders as a penalty on
those found guilty of crimes and this is usually imposed when such an individual is to be
imprisoned for three months or more. The Australian legal system, on the other hand, uses
various penalties on persons found guilty of different crimes. Such include, imprisonment, and
fines. Unlike in Nepal legal system which has a wide variety of penalties to select, the Australian
legal system has only two penalties which can be imposed on an individual found guilty of any
criminal offense. According to Hart's analysis, the type of penalty is based on tribal court rules
and the tribal constitutional provisions. He argues that the key penalties for an individual found
guilty of a crime would be the imposition of a fine on him and this is attributed to the fact that he
believed in the rules of recognition and change.
2 Andrews, N. (2015). Contract law. Cambridge University Press.

AUSTRALIAN COMMERCIAL LAW 4
Part C (10 marks- 600 words)
Issue
The primary matter of the case was about a contract on leasing. Previously Transit
management Pty Ltd had leased some of its premises to the Duffy Bros Fruit market Pty Ltd for
fifteen years. The agreement was that the lessee was to pay a base rent of $245,343 per annum
and a monthly interest of 19.65 percent. Some of the critical legal issues in the case was for
instance whether the lessee had breached the clause 10.2 of the 1999 deed or not and this matter
was due to the notice of the cross-appeal by the lessee.3 Another issue was relating to the fact
that if the lessee had breached clause 3 of the lease agreement, it would be a breach of a
significant term of the lease which would result in termination of the contract. The lessor would,
therefore, be awarded for the loss of bargain damages.
The other issue was on whether the breach of clause 3 of the lease agreement would
entitle the appellant to recover for the losses which are for bargain damages as is stipulated in
section 117 of the Conveyancing Act. 4The broad areas of the contract law regarding the case
included that a particular party may terminate the contract due to the inability of one of the
parties to fulfill the obligation it owes. The intention to terminate the contract for repudiation can
be done through implied or express conduct. Also, during the formation of a contract, there are
3 Barnett, K., & Harder, S. (2014). Remedies in Australian private law. Cambridge
University Press.
4 Carter, J. W. (2017). Drafting termination clauses. Commercial Law Quarterly: The
Journal of the Commercial Law Association of Australia, 31(1), 22.

AUSTRALIAN COMMERCIAL LAW 5
certain essential requirements such as agreement, certainty, capacity and the intention of the
contract.5
Rule
The key principles used during the ruling for the case primarily included, the legal
capacity such that all the parties had the capacity to enter into the contract.
Another principle was on offer and acceptance where the Transit management Pty Ltd
offered their premises and in exchange accepted the annual lease payments and the monthly
interests by Duffy Bros Fruit Market Pty Ltd. The other principle was on the legal purpose of the
contract which was about the leasing of the premises by the Transit Management Pty Ltd. The
exchange of value was also another key principle of the law which was used in deciding the case.
Under the above principle, cash was used as the means of exchange of value rendered for the
services offered to Duffy Bros Fruit Market Pty Ltd.
Application
In deciding the case, the court of appeal made a decision that the agreement was
validly terminated and this had been due to the failure to pay for the minimum rental payments.
Such a failure resulted in a loss of bargain of damages and the rent arrears. It was also considered
that there was a breach of the 1999 deed and not an essential term in the lease. The non-payment
of the rental agreement was typically a violation of the contract which had been made in the
5 Cartwright, J. (2016). Contract law: An introduction to the English law of contract for
the civil lawyer. Bloomsbury Publishing.

AUSTRALIAN COMMERCIAL LAW 6
lease contract which is an essential term of the contract. The contract, therefore, had to be
terminated to get the award of loss of bargain damages.6
Conclusion and Remedies
In conclusion, in its application of the relevant rules, the court argued that Duffy Bros
Fruit Market Pty Ltd had in deed violated an essential agreement of the lease by failing to pay
monthly rentals. The court of appeal judged that Duffy Bros Fruit Market Pty Ltd was to pay for
all the damages it had caused to the Transit Management Pty Ltd by failing to comply with the
agreement. Therefore the remedy for the breach of contract was an award to Gumland for the
loss and damages resulting in the termination of leasing agreement.7
Part D (10 marks- 600 words)
Google Inc. v. ACCC case (2013)
Issue
The case relating to fraudulent misrepresentation by one party in Australia was that on
Google Inc. v. ACCC which was decided by the high court in Australia. In the case, Google was
accused of deceptive and misleading conduct which entailed the exhibition of an advertiser's web
address as a sponsored link8 . The link also contained the competitor’s name. Based on the case,
6 Catton, D. J. (2017). Should retail lease legislation in Australia be simplified? (Doctoral
dissertation, Queensland University of Technology).
7 Daly, A., & Scardamaglia, A. (2017). Profiling the Australian Google consumer:
implications of search engine practices for consumer law and policy. Journal of
Consumer Policy, 40(3), 299-320.
8 Eivazi, K. (2014). Google liability for misleading or deceptive conduct: Australian
perspective. Computer Law & Security Review, 30(5), 579-585.

AUSTRALIAN COMMERCIAL LAW 7
the key issues were deception and fraudulent misrepresentation by Google. The areas pertaining
to the case based on the contract law included contractual agreements, advertisements, and the
commercial negotiations. The above areas of business activities are covered by the Australian
Commercial Law (ACL).
Rule
The key principles which were used by the judge in deciding the case were based on the
fact that ACCC had information about the misleading information which Google had used as an
advertisement. He argued that such a representation in form of adverts had been made to induce
ACCC into entering into a contract with the Google Inc.
The other principle was on the legal purpose of the information which had been passed
by Google Inc. The information was typically used as an advertisement which was opposed by
ACCC. Another principle used in deciding the case was on the legal capacity of Google to enter
into a contract with ACCC.In the case, it was declared that the two parties had the legal capacity
to enter into a commercial contract. Further, there was the principle of exchange of value such
that the Google Company was to pass the information concerning ACCC in exchange for some
amount of cash.
Application
According to the Australian Commercial Law a fraudulent misrepresentation does not
have to be intentional but as long as it misleads the public, it is considered as a breach of contract
between two parties. In the case, Google had engaged in deceptive conduct which is against the
law by displaying paid advertisements on its search engine. In the application of the relevant law,
an individual or company should not commerce or be engaged in conduct which is misleading.
The judge, therefore, held that Google had committed a fraudulent misrepresentation act since it

AUSTRALIAN COMMERCIAL LAW 8
had accepted to provide misleading information about ACCC9. The court also applied the
relevant laws by looking at the different circumstances of the case such that it determined
whether the conduct was intentional or not. For instance, it looked at whether Google Inc. had
provided misleading information on the Australian Competition and Consumer Commission.
The trial court in their judgment argued that Google had fraudulently provided a
misleading information in their advertisement. However, this was overturned by the high court..
Conclusion and Remedies
Based on the above case, the high court concluded that Google Inc. had not violated the
breach of the commercial law. The high court therefore unanimously upheld the appeal case. The
argument was that Google had not in deed engaged in the misleading conduct ACCC claimed
that it had shown on behalf of its advertisers. Also, according to the justice Heydon, Google
never created the message which was found in the advertisement, and therefore there was no
basis that Google had indeed used the advertisement10. According to section 236 of the law. The
remedy for this case was rescission and this led to the termination of the contract between the
two parties. The other remedy was compensation for the damages which had been caused to
ACCC by the Google Company11
9 Hart, H. L. A. (2017). Positivism and the Separation of Law and Morals. In Law and
Morality (pp. 63-99). Routledge.
10 Klineberg, D. (2017). Can you see the mountain?: A legal journey with a few diversions
[Book Review]. Bar News: The Journal of the NSW Bar Association, (Summer 2017), 67.
11 MacQueen, H., & Thomson, J. (2016). Contract law in Scotland. Bloomsbury
Publishing.

AUSTRALIAN COMMERCIAL LAW 9
Part E (10 marks 600 words)
Issue
The key legal issue in the case entails the violation of the contract agreement which was
entered between Pedro and Lisa. In the contract, the two had agreed that Pedro would not be
allowed to sell the French jewellery in Australia for two years, but after one year Pedro opened
retail businesses to sell imported French jewellery12. The broad areas of a contract of law
relevant in the case include the terms of the contract which had been agreed upon by the two
individuals. The term of the contract was that selling of the imported jewellery in Australia was
not allowed for Pedro even though he had breached the agreement. Lisa, therefore, has an option
of taking legal action against Pedro based on the law of contract13.
Rule
In deciding on the relevant action which should be taken against Pedro, the fundamental
principles which should be taken into account include, the offer in simple terms which was that
Pedro was not sell imported French jewellery in Australia14. The other principle is on a
12 Marsoof, A. (2015). Serving the goals of trademark owners through the Australian
Consumer Law: A reflection on Google v ACCC.
13 Nonet, P., Selznick, P., & Kagan, R. A. (2017). Law and society in transition: Toward
responsive law. Routledge.
14 Collins, T. L. (2016). The doctrine of frustration, commercial leases, and the Canterbury
earthquakes.

AUSTRALIAN COMMERCIAL LAW 10
contractual capacity of both Lisa and Pedro such that their capacity to enter a particular
contractual agreement has been obtained15. Another principle would be on the agreement made
between the two parties. Lisa had offered to enter into an agreement with Lisa who had also
accepted the terms of the contract but later breached the agreement.
Application
According to the relevant laws of contract, when entering into an agreement, the terms
applicable to such a contract has to be complied with. An individual who fails to adhere to such
terms is considered to have breached the contract and can, therefore, be sued by another party. In
the case of Pedro v. Lisa, the agreement was that Pedro would not sell any of the imported
French jewellery in Australia for two years16. However, after a year, Pedro opened up a retail
business which was selling the imported French jewellery. From the case, it is clear that Pedro
had seriously violated the agreement made between them and would, therefore, be sued for gross
violation17. In deciding the case, Pedro is guilty of breaching the contract and should, therefore,
pay for the damages and losses caused to Lisa. The other relevant rule to help in deciding the
case would be on the agreement of the contract made between the two parties. Under the rule, it
15 Poole, J. (2016). Textbook on contract law. Oxford University Press.
16 Prasad, U. S. (2015). Nepal’s excise systems and the legal frameworks: agendas for
reform. World Customs Journal, 9(2), 51-69.
17 Roth, L. (2014). Mandatory sentencing laws. Sydney: NSW Parliamentary Research
Service.
Subasinghe, W.(2014). Sociological Analysis on Death Penalty in Sri Lanka.

AUSTRALIAN COMMERCIAL LAW 11
will be prudent to take into account the relevant agreement which was made by both Pedro and
Lisa to decide on whether Pedro had in deed contravened the contract.
Conclusion and Remedies
In conclusion, Pedro is considered to have breached the contract between her and Lisa
which had prohibited her from selling imported French jewellery. The remedies for violation of
the contract would include, a specific performance which will force Pedro to stop selling the
imported French jewellery for a specified period which was two years. Such a remedy will be
used since the money damage remedy will not be adequate to compensate Lisa or the breach he
had committed18.The other remedy would be on rescission which will entail the cancellation of
the contract, and both Lia and Pedro will leave the performance of such a contract which they
had agreed to execute before one of the parties had breached the agreement19. Lastly, the remedy
for the breach of the above contract would be a reformation of the agreement such that all the
parties are given an opportunity to reflect on that which they had intended to do based on the
terms of the contract. The above remedies will be used as the value of the damage caused to
Pedro in terms of money cannot be accounted for20.
18 Tolhurst, G. J. (2016). The assignment of contractual rights. Bloomsbury Publishing.
19 Nonet, P., Selznick, P., & Kagan, R. A. (2017). Law and society in transition: Toward
responsive law. Routledge.
20 Song, S., & Stewart, M. (2016, June). Online trade mark infringement and keyword
advertising. In Intellectual Property Forum: journal of the Intellectual and Industrial
Property Society of Australia and New Zealand (No. 105, p. 65). Intellectual and
Industrial Property Society of Australia and New Zealand Inc.

AUSTRALIAN COMMERCIAL LAW 12
References
. Song, S., & Stewart, M. (2016, June). Online trade mark infringement and keyword advertising.
In Intellectual Property Forum: journal of the Intellectual and Industrial Property
Society of Australia and New Zealand (No. 105, p. 65). Intellectual and Industrial
Property Society of Australia and New Zealand Inc.
Anantaset, P. (2015). Liability for Advertiser and Internet Search Engine Service Provider: A
Case Study of Google AdWords. Thammasat Business Law Journal, 5.
Andrews, N. (2015). Contract law. Cambridge University Press.
Barnett, K., & Harder, S. (2014). Remedies in Australian private law. Cambridge University
Press.
Carter, J. W. (2017). Drafting termination clauses. Commercial Law Quarterly: The Journal of
the Commercial Law Association of Australia, 31(1), 22.

AUSTRALIAN COMMERCIAL LAW 13
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Catton, D. J. (2017). Should retail lease legislation in Australia be simplified? (Doctoral
dissertation, Queensland University of Technology).
Collins, T. L. (2016). The doctrine of frustration, commercial leases, and the Canterbury
earthquakes.
Daly, A., & Scardamaglia, A. (2017). Profiling the Australian Google consumer: implications of
search engine practices for consumer law and policy. Journal of Consumer Policy, 40(3),
299-320.
Eivazi, K. (2014). Google liability for misleading or deceptive conduct: Australian
perspective. Computer Law & Security Review, 30(5), 579-585.
Hart, H. L. A. (2017). Positivism and the Separation of Law and Morals. In Law and
Morality (pp. 63-99). Routledge.
Klineberg, D. (2017). Can you see the mountain?: A legal journey with a few diversions [Book
Review]. Bar News: The Journal of the NSW Bar Association, (Summer 2017), 67.
Marsoof, A. (2015). Serving the goals of trademark owners through the Australian Consumer
Law: A reflection on Google v ACCC.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Nonet, P., Selznick, P., & Kagan, R. A. (2017). Law and society in transition: Toward
responsive law. Routledge.
Poole, J. (2016). Textbook on contract law. Oxford University Press.
Prasad, U. S. (2015). Nepal’s excise systems and the legal frameworks: agendas for
reform. World Customs Journal, 9(2), 51-69.

AUSTRALIAN COMMERCIAL LAW 14
Roth, L. (2014). Mandatory sentencing laws. Sydney: NSW Parliamentary Research Service.
Subasinghe, W.(2014). Sociological Analysis on Death Penalty in Sri Lanka.
Tolhurst, G. J. (2016). The assignment of contractual rights. Bloomsbury Publishing.