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The Law of Contract - Answer 1

A contract is termed to be illegal when a party, who generally for enforcing an agreement had to go through the legality for backing an agreement, but cannot because the contract is illegal. What makes a contract illegal is- the illegality at its formation which means that the intention of the parties while making the contract were illegal while its formation and the parties were known of it or the parties were trying to perform something illegal from the face of it; if there is some illegal purpose or illegal object involved which means one or both of the parties were aware of the illegal purpose of their contract; if there is some illegality while the performance of the contract which means that if a contract is a valid contract and it is supposed to work in a legal way, but while its performance if somebody does an illegal thing, that constitutes the contract to be illegal. It can happen by illegal conduct of both of the parties regardless of the fact either of the parties was aware of it or not.[1]

Some countries to have illegal contracts act but in the UK and Australia, it is not such. The law of illegality is based upon common law. It recognizes certain ground rules to state any contract to be an illegal contract-there must be some term or terms in the contract which can prove the illegality of it if it is given in any statute or any common law, the final decision has to be of the Court to decide on such illegality. It could be that authorities like Competition and Markets Authority or Competition Appeals Tribunals make a contract as illegal and levy fine, but the final decision has to be of the court.[2]

The Law of Contract - Answer 2

As a sole proprietor, one shall be solely responsible for taking all kinds of decision himself like employing people, taxations, payments of the bill, etc.

The taxation requirements of a sole trader are the same that of an individual. He needs to use his individual tax file number. All of the income has to be recorded under individual tax return showing the business income and expenses. One should apply for ABN and use it always. For this one needs to get himself register at for Goods and Services Tax (GST) if annually the turnover of the business is more than $75,000. The payment of taxes must be in accordance with the individual tax percentage which shall lead to a small business tax offset. The trader shall be advised to pay pay-as-you-go instalments (PAYG). This means the tax that is paid at the end of the financial year, it is paid quarterly. Also, there is a provision of Personal Services Income (PSI). This is the income which a person gets from the skills and efforts he applies as an individual. This is given by the government and hence one can claim a rebate from the incurred income as such.[3]

The Law of Contract - Answer 3

Legislations, industrial instruments and common law are the main sources of employment law. Under the Australian jurisdiction, The Fair Works Act 2009 (Cth) governs the employment laws of the country. Contradictory to that there are respective state, federal and territory legislative schemes based on work, health, safety and non-discrimination. Industrial instruments like modern awards and enterprise agreements are governed bu the Cth act. For the minimum pay rates, awards and employment conditions are set in the act for giving the employees the best of all of the experience and that they are good at whatever level they are. Each year the FWC does an annual wage review and fixes the national minimum age. In the year 2019, the national minimum wage was fixed at $74.80 per week which means $19.49 per hour. An employment contract and principles of common law are very important for the employees who are not sheltered by any award or enterprise agreement.

As per the National Employment Standards (NES), there are 10 areas for the employees who are not protected by award or agreement based- they are maximum weekly hours, requests for flexible working arrangements, parental leave and entitlements, annual leaves, personal carer’s leave and compassionate leave, community service leaves, a notice of termination and redundancy pay and Fair work information statement.[4]

As per section 17 of the Model Act, the employers have a duty to as much as it is reasonably practicable, he must ensure health and safety of its employees by eliminating or minimizing all the possible risks. As per section 18 of the Act, ‘reasonable practicable’ means in all of the ‘relevant matters’ the employer must ensure health and safety as much as possible. That act entails what all can be considered to be ‘relevant matter’-[5]

  1. Any presumption of the likelihood of any harm or possible risk
  2. The extent of the harm that could occur
  3. What the employer knows or ought to know what all can be constituted to be risk or hazard and try to eliminate it
  4. The employer must check the availability and suitability of the ways to cure it.

 According to Safe Work Australia, employers should have someplace to take care of the risks to health and safety. This comes in when there is so much of depletion the air quality index. Amongst this, the measures that employers could take are[6]-

  1. Encourage employees to work indoors, wherever possible
  2. Until the conditions get improved, reschedule all of the outdoor works
  3. Make sure that the buildings and premises are well equipped and are not affected by dust or debris
  4. To remove all of the dust and debris of the outdoor area
  5. Providing equipment like eye protection, corrected fitted P2 face masks for the employees.

The Law of Contract - Answer 4

Under Contract Law, there are ways by which any contract can be terminated-

  1. By performance

The basic rule is that performance of the contract must be in the exact form as listed in the contract. It was held in Cutter v Powell,[7]that where there is an express contract, then there is no room for implied contracts. The fact of the case, the contract specified that the payment was dependant upon the completion of the voyage and shall be paid only when the ship arrives at the port.[8]

  1. By Breach

If there has been a breach of any condition or warranty. The test to determine this was held in Tramways Advertising Pty Ltd v Luna Park.[9]If the term is a condition, means it is an essential term of the contract. Such breach of condition shall result in the innocent party to terminate or sue the defaulter as held in Poussard v Spiers [10] and Associated Newspapers Ltd v Bancks.[11]If the term is a warranty, which means it is some non-essential term of the contract. Any breach of such warranty shall allow the innocent party to sue for damages as held in Bettini v Gye.[12]

So yes the organisers have the leverage to cancel the contract as their condition of breach of contract was an essential part of it. Billy was supposed to be present by 2 days before the final so that he could rehearse, test the facilities and help in publicising the event. He arrived on the day of the event which kind of leave him and the organisers with very less time to have everything arranged, which was kind of the whole reason why he was summoned 2 days ago. So yes, they are eligible to terminate the contract. This argument is based upon Poussard case and Associated Newspaper case.

Also since the contract was an express contract, which means the terms and conditions were enlisted in the contract if he had an issue with this particular term he could have raised an objection to it. As per Cutter case, if there is any term mentioned to be performed in the contract, and if not performed by the party, so that results in termination.

The Law of Contract - Answer 5

Section 24 of the ACL act defines the meaning of ‘unfair.’ It says any term of the contract that causes an imbalance in the rights of the parties; or where the term of the contract benefits of the parties; or where accepting the terms of the contract shall cause any financial or otherwise lost to one of the parties. Whether a term is unfair or not, shall depend on the objectivity of the case. The act says that court shall, before judging a case on its unfairness, shall take into account the transparency of the term and shall interpret the act as a whole.

Section 25 gives examples of unfair contracts. First, if any contract limits or avoid one of the parties in performing a contract; or a contract that terminates the contract; or a contract imposes a penalty for breaching or terminating any contract; or a contract that gives power to a party to alter terms of the contract according to his will; or gives the authority to renew or not renew a contract; or where one party has the right to vary the upfront price without the right of another to terminate the contract; or retains the authority to one party to decide whether there has been a breach of contract or not; or where one party limits its vicarious liability for his agents; or where one party assigns any contract detrimental to the other party, that too without his consent; or limits the rights of one party to sue the other; or where one party limits the evidence of one party in any proceeding; or burdens another party with the evidence; or any other kind.

The Law of Contract - Answer 6

As per the general principles of common law and torts, to claim negligence in any lawsuit, there three elements that have to be proved by the plaintiff. First, that there existed a standard duty of care by the defendant. Second, the defendant failed to satisfy such duty. Third, the plaintiff must also prove that the said breach by the defendant has resulted in any loss or injury to the plaintiff.

Section 5 B of Civil Liability Act[13] states that a person against whom the allegations for inflicting the harm, is not responsible as long as the risk is foreseeable; or the risk is not much of importance; or a reasonable person under those scenarios would have taken precaution. For this, the Court has to check the likelihood of the harm, that could be caused if care was not taken; or the seriousness of the harm; or the precautionary measures to combat the harm; or the social utility of the activity. An English case,[14] laid the foundation of the modern law of negligence and gave principles on the duty of care. With this reference, it could be inferred that if Barbara had fallen in the fruit section, then yes the owner was liable since they were to clean that section every 15 minutes. He owed a duty of care and that he breached it by not cleaning, which resulted in damages to Barbara. Once it is recognized that the defendant had a standard duty of care, it is then required to prove that such duty had been breached. The breach of duty of care refers to the failure on the part the obligated person to take reasonable care to avoid causing any risk or harm to others while discharging their duty. The test to determine a potential breach of standard care was set in the case of Wyong Shire Council v Shirt,[15]which states the court must determine what a reasonable person would have done in the situation of the defendant and whether such person would have been able to foresee the risk of damage that may happen due to their conduct. If the answer to that question is affirmative then it can be established that a breach in the standard duty of care had occurred. Furthermore, the court held that if the risk of harm is significant and simple and reasonable to remove, it must not be ignored. S 9(1) of the Civil Liability Act 2003 also deals with breach of duty of care. It states that a person is said to have not breached his duty unless the risk is reasonably foreseeable, significant and a rational individual in such positions would have availed protective measures. The final element in deciding negligence is whether there was any loss or harm suffered by the plaintiff. As per S 11(1) Civil Liability Act, 2003 the plaintiff must prove that there is a relation between the act of the defendant and the claimant's injury. During the Commonwealth v McLean[16] case, the Hon'ble court determined that if the harm or loss is fairly foreseeable, then the defendant is responsible for paying compensation or damages.

All of the above elements fall correctly in our case and hence Stan is liable to be paid damages.

The Law of Contract - Answer 6

For a contract to be binding, some essentials are to be fulfilled:-[17]

  1. Intention to create a legal relationship
  2. Offer
  3. Acceptance
  4. Consideration
  5. Capacity to contract

In a leading Australia case, Thornton v Shoe Lane Parking Ltd,[18]the court held that there was a valid contract the moment plaintiff bought the ticket from the vending machine for some amount. Hence it is the liability of the Shoe Lane Parking to indemnify him for the damages. It is an invitation of offer by the bus depot, when they make bus time-table. The offer is made by the passenger when he enters the bus. An acceptance is complete when the bus conductor accepts the fare given by the passenger in exchange of a ticket. In a leading case Wilkie v London Transport Board,[19]Lord Greene held that an offer was made by the bus company and an acceptance when the passenger enters the bus platform or buys the fare.

The fifth and sixth element comes into recognition if the validity of the contract is disputable. The basic agenda of any contract is to minimize the conflicts. A contract is determined to make things legal and that neither of the parties has to waste their time in future on the credibility of the contract.

Hence if a business comes into dealing with any of its contractors or customers without following the proper procedure of contract essentials, that shall pose a threat for them in the coming future. If any of their parties do not perform the contract or repudiates it, then the businessman cannot take the plea of it being against the laws of contract. Hence in order to have a legal binding and be protected against the proclivities of the termination of the contract, businessmen has to be utter careful about it. For any contract to have a legal binding it has to be according to the provisions of Contract and Commercial Act of 2017. Australia is however run on common law and the respective legislation and common law goes hand in hand.

Bibliography for Illegality and Public Policy

Online Sources

Australian Contract Law, ‘Illegality and public policy.’ (2020) <https://www.australiancontractlaw.com/law/avoidance-illegality.html >

Hall Ellis Solicitors, ‘Illegal Contract Terms: Business and Employment law Illegality (void and unenforceable agreements).’ (2020) <https://hallellis.co.uk/illegal-contracts-agreements/ >

Australian Taxation Office, ‘Sole trader.’ (2016). < https://www.ato.gov.au/business/starting-your-own-business/before-you-get-started/choosing-your-business-structure/sole-trader/> 

Joydeep Hor, ‘Australia: Employment and Labour Laws Regulations 2020.’ (2020). < https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/australia > 

Misha Ketchell, ‘What employers need to know: The legal risk of asking staff to work in smokey air.’ (2020) <https://theconversation.com/what-employers-need-to-know-the-legal-risk-of-asking-staff-to-work-in-smokey-air-129432>

Law Teacher, ‘Cutter v Powell (195) 6 TR 320.’ (2018) <https://www.lawteacher.net/cases/cutter-v-powell.php >

Civil Liability Act (No 035 of 2002) 2002 (WA) <https://www.legislation.wa.gov.au/legislation/statutes.nsf/main_mrtitle_149_homepage.html>

The University of Auckland, ‘Introduction to the law of contracts.’ <http://www.pauldavid.co.nz/docs/Introduction_To_The_Law_Of_Contract.pdf>


See O'Sullivan and Hilliard's The Law of Contract, (2018). Oxford University Press, 2018.

Case Laws

Donoghue v Stevenson [1932] UKHL 100

Wyong Shire Council v Shirt (1980) 29 ALR 217)

Commonwealth v McLean [1996] NSWSC 657]

Coal Cliffs Collieries Pty Ltd v Sijehama Pty Ltd [(1991) NSWLR 1]

Clarke v The Earl of Dunraven and Mount-Earl (The "Satanita") [1897] AC 59

Hillas & Co Ltd v Arcos Ltd [1932] All ER Rep 494

Couturier v Hastie (1856) 5 HLC 673

Cutter v Powell (1795) 6 TR 320; 101 ER 573

Tramways Advertising Pty Ltd v Luna Park (1938) HCA 66

Poussard v Spiers (1876) 1 QBD 410

Associated Newspapers Ltd v Bancks (1951) 83 CLR 322.

Bettini v Gye (1876) 1 QBD 183

Thornton v Shoe Lane Parking Ltd [1971] QB 163

Wilkie v London Transport Board [(1947) 1 All ER 258]

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Law Assignment Help

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