Table of Contents

Part -A..

Question 1.

Question 2.

Question 3.

Question 4.

Part-B..

Question 1.

Question 3 (a).

Question 3 (b).

Question 4.

Question 5.

Foundations of Business Law - Part A

Foundations of Business Law - Question 1

The methods of alternative dispute resolution can be a beneficial methodology for a business particularly when it is a legal conflict with another business. One of the advantages of having alternative dispute resolution is the cost-saving (LSC of South Australia). It is not only reducing the cost of litigants but also save the difficulties that are likely to be experienced by the communities which are involved in the lengthy trials. Another beneficial advantage of ADR is the limitation of privacy for the parties who want to have their dispute resolved with accurate respect regarding their privacy (Hon. Michael Kirby AC CMG). It is also beneficial when the parties in dispute are interested in having an ongoing relationship despite having legal conflicts. The intervention of an external third-party can lead to having resolution concerning the dispute with the serving of justice and finality along with having a smooth relationship intact between the parties in disputes. Another advantage of having alternative dispute resolution is concerning the saving of public cost which can be e avoided with the procedure of alternative dispute resolution.

Foundations of Business Law - Question 2

The two methods to terminate or end the contract are discharged by frustration and breach of an essential term of the contract. One of the methods of terminating a contract is the discharge of contract by frustration. The doctrine of frustration is applicable where there is a supervening event which is beyond the control of the parties and it renders the performance of the contract with its fundamental which has not been earlier anticipated by the parties. One such example is the case of Taylor v Caldwell.

Another methodology for the termination of a contract is the breach of an essential term of the contract. The essential term has been described as a condition of fundamental term and is desired from the common intention of the parties along with the expression of the language of the contract in order to justify such termination of the contract (Tramways Advertising Pty Ltd v Luna Park).

Foundations of Business Law - Question 3

If the purpose of the contract is an illegal activity, which will lead to the engagement of the contracting parties in illegal conduct, then it can affect the contract in various manners. In general, the contract which is having an object which is classified to be illegal or contrary to the public policy, the contract is held to be void or unenforceable depending on the nature of illegality persisting in the terms of the contract. (ACC). In some exceptional cases, if one the party is not aware of the illegality terms of the contract, then the part of the contract which is inconsistent with the public policy will not be in enforced. Although the rest of the contract will be enforceable. One of the exceptions concerning this law of enforcing an illegal purpose-based contract is that if the contract has been made illegal due to the passing of a statute for the protection of a given class of people, then the member of that class of people can get the money or the property transferred back by the other party under the terms of the contract.

Foundations of Business Law - Question 4

There are various advantages in leasing the premises in which business operates. The three of them are the availability of capital; reduction of risk and privilege of the claim of dedication. The availability of capital leads to facilitate the response to the other opportunities for the party which are available in the market. The other advantage of having business premises leased is the reduction of risk. Leasing is not always a long-term financial commitment and it is beneficial for the businesses who are just getting into the market. Since there is a lease agreement associated with leasing business premises, it also allows the party to leave the property once the fixed time frame given in the agreement is expired. The significant advantage of leasing premises for business operation is the privilege of claiming a deduction for other related expenses during the period the property which has been in the lease (ATO).

Foundations of Business Law - Part B

Foundations of Business Law - Question 1

The four key areas which must be considered by the business operators when there is starting a business concerning the obligations and rights associated with the pay and working conditions of the employed staff are as follows:

Providing the minimum wages: The landmark case in this regard where the underpayment of worker has been considered by the Federal Court is Hallmark Computers Darwin case. The company of this case was found to be engaged in the deceptive, deliberative and systematic abuse of the workers who have been employed under the 450 skilled visa schemes. It was found in the case that the company owner was coercing the employees for retaining their significant pay packet on a given period of time with the use of threat of losing their job in the company.

Safe working conditions: Providing safe working condition is one of the obligations of the employer towards their employees. In the recent case of LakeCoal Private Limited, the court fined $180000 for the breach of provisions of the Work Health and Safety Act 2011. A strong message has been sent to the community by the court with the judgment concerning the expectation of the mine operators to comply with all the work health and safety obligations which have been imposed on the employers concerning the working condition for the employees.

Freedom of Association: As provided in the case of Bromberg, M and Irving, the employees have the right to form and join a trade union in order to protect their social economic and occupational interest.

Providing leaves as per the provisions: In the case of Mondelez Australia Pty Ltd v AMWU & Ors, the court held in this case that the entitlement of 10 days of personal leave which has been provided in the National Employment Standard should be calculated based on ordinary working hours of the employee and not the working days.

Foundations of Business Law - Question 3a

Consider the facts of the case, if the organisation are entitled to terminate the contract is a matter to be decided by the court. Only a breach of a condition which has been stipulated by the statutes can lead to the termination of the contract by the aggrieved party irrespective of the gravity of such breach as provided in the case of Arcos v Ronaasen. As provided in the case of L Schuler AG v Wickman Machine Tool Sales Ltd, if the condition is not stipulated by the statute and the intention of the parties are not very clear regarding the term to be a condition in the legal sense, the court will determine the term in the context of the condition.

Another factor to be considered in this case is the intention of the parties. As provided in the case of Tramways Advertising Pty Ltd v Luna Park Ltd, the term of the contract is a legal condition if it is of such importance that the party would not have entered into a contract without the assurance of the strict performance of such terms. It is provided in this case that the condition is based on the intention of the parties concerning the termination of the contract even for the smallest breach of the term. The conditions of the given case in question suggest the intention of the parties over the presence of Billy 2 days before as a condition and thus can terminate the contract.

Foundations of Business Law - Question 3b

The requirements which have been provided for making a consumer contract unfair and void under the Australian consumer law are as follows:

  1. Contract should be consumer contract: A consumer contract is a contract for supplying of goods or services or selling or granting of an interest in a given land (s 23(3), ACL).
  1. Standard form of contract is compulsory: There is no definition provided concerning the standard form of contract in ACL but it is a rebuttal presumption that a contract will be the standard form of contract (s 27(1), ACL).
  2. Terms of the contract must be unfair: It causes significant imbalance in the obligation and rights of the parties arising from the contract; causing financial or otherwise loss for the party if it were applied and not mandatory for protecting the legitimate interest of the party (ACL s 24(1); ASIC Act s 12BG (1)).

Foundations of Business Law - Question 4

In this present case, the doctor will be held liable in negligence for the injury of Stan since all the elements of the tort of negligence are fulfilled here. First, the doctor owed a duty of care where it was the legal obligation of the doctor to take reasonable care while describing the medication to Stan. Secondly, the other element of the tort of negligence is a breach of such duty which has been owed by the doctor. Stan can show that there was a substantial risk of harm existing in this duty of care and such risk was foreseeable for any doctor and any reasonable doctor would have taken all the precautions to avoid such risk in the similar type of circumstances. The last element of negligence is causation which is concerning the damage or the injury which has been suffered as a result of the breach of duty of care owed by another party. Stan has to go through two operations and had taken leave from work for 2 months which not only caused bodily damage but also financial damage to him. One such case is Curtis v Queen Elizabeth Hospital. It was held in this case that if a surgeon fails to diagnose and treat any disease it amounts to a breach of duty of care. Another relevant case in this regard is Dixon v Foote, where the surgeon performed hysterectomy negligently which resulted in the damage of the ureter of the patient. Similarly, the negligence of the doctor in prescribing medicine resulted in two consecutive operations of the.

The plaintiff, Stan, can also file a suit under Civil liability Act 2002 as there was a duty owed (Division 2) by the doctor and such breach of duty of care has resulted into causing damage (Division 3). The court will look into the determination of the negligence which has caused that particular harm. The two elements provided are negligence being a mandatory condition for the harm and there is the scope of liability (s 5D CLA).

Foundations of Business Law - Question 5

One of the significant cases in the terms of business contract is Smythe v Thomas. The pronouncement made in this court lead to the categorisation of online auctions such as the online auction on eBay as one of the species of option. With the formation of the contractor validity of peer-to-peer online auctions, this case has increased the ability of vendor and purchaser enforcing the contract of sale of goods with the mode of online auction.

Another significant case which is to be discussed concerning business and the related contract is Codelfa Construction v State Rail Authority of New South Wales. In this case, it was held that if it term does not give business efficacy to the contracts, then the reasonability of the term is not sufficient enough. It was also pronounced by the court in this case that in the Parol evidence rule only the outside evidence will be accepted when the face value is having confusion. It was concluded that outside evidence in a case can only resolve ambiguity but it cannot raise any such.

Another case which has made a significant contribution to the potential legal risk which has been associated with the operation of the business is Toll (FCGT) Pty Ltd v Alphapharm Pty Ltd. The court held in this case that all the signature has been an important expression concerning the intention to enter into a contractual relationship by the parties, but it cannot be considered as conclusive proof of such intention. The court emphasised the examination of all other circumstances of the case in order to ascertain the existence of a contract. Considerably the proper information of the contents of the contract to the party is including the clauses of exclusion at the time of assigning such contract has been considered significant. 

Bibliography for Legal Service Commission of South Australia

Legislations/ Acts

ACL s 24(1); ASIC Act s 12BG (1)

s 23(3), ACL

s 27(1), ACL

s 5D CLA

Work Health and Safety Act 2011

Cases

Arcos v Ronaasen (1933)

Bromberg, M and Irving, M [eds], op.cit.p. 53

Codelfa Construction v State Rail Authority of New South Wales (1982) 149 CLR 337

Curtis v Queen Elizabeth Hospital [2008] SADC 48

Dixon v Foote [2012] ACTSC 101

Kerry Leanne Rigby v Richard Kerr [2008] NTMC 037

L Schuler AG v Wickman Machine Tool Sales Ltd (1974)

Mondelez Australia Pty Ltd v AMWU & Ors [2020] HCA 29

Taylor v Caldwell [1863] 3 B&S 826

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Tramways Advertising Pty Ltd v Luna Park (N.S.W.) Ltd 1938 S.R. (N.S.W.) 632

Tramways Advertising Pty Ltd v Luna Park Ltd (1938)

Websites/ Journals

ATO. (n.d). Leasing and renting commercial premises. Retrieved from: https://www.ato.gov.au/General/property/property-used-in-running-a-business/leasing-and-renting-commercial-premises/

Hon. Michael Kirby. (2009). Alternative dispute resolution – a hard-nosed view of its strengths and limitations. Retrieved from: https://www.michaelkirby.com.au/images/stories/speeches/2000s/2009%2B/2377.Iama_-_Sa_Chapter%2C_Agm%2C_July_2009.pdf

Legal Service Commission of south Australia. (n.d). Advantages of alternative dispute resolution. Retrieved from: https://lawhandbook.sa.gov.au/ch27s10s01.php#:~:text=it%20is%20more%20flexible%20and,confidential%20nature%20of%20the%20process

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