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Law for Commerce - Scenario 1

Issues:

  • Is the prenuptial agreement a valid contract?
  • Is the document signed after the marriage a valid contract?
  • Can Natalie claim the exception of Undue Influence while she signed both the contracts?

Relevant Laws:

  • Family Law Act, 1975
  • Competition and Consumer Act, 2010

Application:

In the comparatively recent landmark case of Thorne vs Kennedy[1], similar facts were faced by the High Court of Australia. An eastern European woman, having very little understanding of English, was made to sign a prenuptial agreement or ‘binding financial agreement’ on the day of her wedding. The partners had met on an online website that was used to find suitable brides. The couple fell in love, and the woman moved to Australia within a year to marry the wealthy man. She was given the agreement to sign on the evening of her wedding. The High Court held that the contract was signed under duress and could not be held valid. The ratio decidendi of the case was subsequently applied and enforced in the case of Delrio vs. Jindra[2], and the pre-nuptial agreement was set aside in the case of Chaffin vs. Chaffin[3]

According to the provisions of the Family Law Act, 1975, section 90 B to 90 KA talk about the requirements of a valid prenuptial agreement or, as known in Australia, a ‘business financial agreement (BFA)’. If these conditions are fulfilled, only then shall a business financial agreement be held valid. 

In the given situation, all the conditions mentioned in the statute have been fulfilled. However, it has to kept in mind that the business financial agreement, is also a contract at the end of the day, and thus, the essentials of a valid contract have to be fulfilled.

Taking into consideration, the similar facts of the case cited above, it may be considered that Natalie had signed the agreement as she was under undue influence of her partner when she signed the contract. Section 90 K[4] (e) provides that the agreement may be set aside by the Court or is voidable at the option of the party if the partner was proved to be ‘unconscionable’ under those circumstances.

According to the precedent set by the HC of Australia, Natalie may be considered as the weaker party in the contract because of

  1. Her financial inequality to her husband- Natalie is from a poor family and has only completed her studies till High School, which makes her un-employable for any major job post.
  2. Her inconclusive residential status in Australia- unless and until a marriage is performed, Natalie may have to leave the country before her visa expires.
  3. Her dependence on her to-be husband for all her things
  4. Her preparedness for the relationship and the upcoming marriage- the cancellation of a wedding to which more than 300 people have been invited would be a matter of embarrassment to Natalie.

Natalie was is disadvantage as the marriage had been planned for 6 months and there was no mention of a pre-nuptial agreement till one month before the wedding and her husband needed her to sign the documents urgently. Being alone and without her family for the first time in her life, it is normal for any woman to act in a manner which may not be beneficial for her.

Conclusion:

Both the documents signed by Natalie would be voidable as they had been signed under undue influence and duress of her husband, who had taken advantage of her insecurities and fears. Although the requirements of the Family Law Act, 1975 had been fulfilled, the basic essentials of a valid contract were absent.

Law for Commerce - Scenario 2

Issues:

  • Are the subsequent variations to the contract valid?
  • Can CCPL be held liable for breach of contract?
  • Can CCPL claim the money spent on the variations?

Relevant Laws:

  • Domestic Building Contracts Act, 1995
  • Australian Consumer Law and Fair-Trading Act, 2012

Application:

The landmark case of Mann vs. Paterson Constructions Pty Ltd[5] had similar facts and was decided by the High Court of Australia. Although there are minor differences that can be pointed out in the facts of the given situation and the cited case, the interpretation of the Court shall remain the same. The principal of ‘claim of quantum merit’ was introduced in the case of Miccon Hire Pty Ltd (in liquidation) vs. Birla Mt Gordon Pty Ltd.[6] This concept says that if a variation is made to the provisions of the contract, but the process prescribed to make the variation has not been followed, a reasonable and fair price for the work done on the variations may be claimed by the constructors later on.

Section 38[7] lays down the procedure to be followed in case a variation is needed. The requirements mentioned in the section were clearly not followed as there were no exchange of notices between the building owner and the contractor. Only a verbal exchange specifying the variations were made and accepted. Sub-section (5) of the section[8], specifies that no variations must be carried out without a signed request for the same by the owner. Thus, it is absolutely clear that the parties have blatantly ignored the provisions mentioned in the statute. However, in accordance to the precedents held by the High Court and the Supreme Court of Australia, CCPL may be allowed to claim the amount spent on the variations, as the amount was comparatively more than the amount decided in the original contract. The non-payment of the said amount would cause unfair loss to CCPL, whereas the owners would enjoy unjust enrichment as a majority of the variations had already been complied with by CCPL.

The term ‘quantum meruit’ literally translates into English to mean ‘the amount he has earned’. It is used to refer to a reasonable amount of money to be paid to the workers when a specific amount against the work done is not mentioned in a written contract. This remedy does not provide for a remedy but for compensation for the amount that has already been spent. For a claim of ‘quantum meruit’ to be successful, three conditions have to be fulfilled.

  1. The owner has to be in a position of benefit from the work done by the contractor
  2. The expenses incurred in the variations must have been paid by the contract (thus providing the benefit to the owner)
  3. The conditions of unjust enrichment should be fulfilled by the owner in case he tries to retain the variations without making payment for the same.

All the conditions for making a claim of ‘quantum meruit’ are present.

Conclusion:

The termination of the contract by the Smiths is not being challenged. However, CCPL should be provided with damages for the termination of the contract along with the extra sum of amount spent on the variations demanded by the Smiths. Keeping the two precedent cases in view, CCPL can claim for the amount spent on the variations.

Law for Commerce - Scenario 3

The Ten Principles of UN Global Impact are a set of guidelines to be followed by businesses all over the world, to maintain good practices and keep a balance between nature and mankind. The relevant Principles that are applicable on the given situation from the Ten Principles of UN Global Compact are Principles 8 and 9.

Principle 8 is based on Chapter 30 of Agenda 21 of the Rio Earth Summit, 1992. It talks about the responsibility that the business has to make sure that the acts of the industry do not prove to be harmful for the society. They should use environment friendly and sustainable practices for the manufacture of their goods. This will ensure that the company gains a top position in the market as the consumer also looks for environment friendly products.

Principal 9 has been based on Article 21 of the Rio Declaration and talks about businesses using technologies to reduce waste and recycle them. The companies can alter manufacturing procedures to make sure that the residue discharged by the manufacturing units do not act as a pollutant for the environment.

The only issue that is being faced by Shabna with the process used by Hanoi Solar Co. is that the toxic waste materials are being dumped in the local river. If a solution with regard to sustainable disposal of the toxic waste is created, the river system will not be polluted, and as a result, the whole issue of environmental pollution being faced would disappear. Thus, keeping in mind the provisions of Principle 9 of the UN Global Compact, an alternative technology to dispose the toxic waste has to be designed. This shall NOT result in a drastic increase in the price of the product and shall also attract more consumers, as they will be labelled environment friendly.

[1] Thorne vs. Kennedy [2017] HCA 49

[2] Delrio vs. Jindra [2019] FCCA 1186

[3] Chaffin vs. Chaffin [2019] FamCA 260

[4] Family Law Act, 1975

[5] Mann vs. Paterson Constructions Pty Ltd [2019] HCA 32

[6] Miccon Hire Pty Ltd (in liquidation) vs. Birla Mt Gordon Pty Ltd [2013] QSC

[7] Section 38 of the Domestic Building Contracts Act, 1995

[8] Section 38 of the Domestic Building Contracts Act, 1995

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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