Reference no: EM132123523

GROUP REPORT

1. This group assignment consists of 2 parts. Part A is a case study on contract law, and Part B is a question involving Corporations Law. Both questions must be answered.

2. The total word limit for the group report is 2,000 words with each part having a maximum word count of 1,000 words. Word count limits are strictly enforced. A deduction of 2 marks will be imposed for every 50 words over the word count for either part of the report. Anything over the word count will not be read by your lecturer.

3. The total word count for the report as well as each part must be clearly written on the cover sheet of the assignment. A paper will not be marked if the word counts are not written on the cover sheet.

PART A: CONTRACT LAW QUESTIONS

1. Refer to the prescribed textbook: Fitzpatrick J, Symes C, Veljanovski A & Parker D, Business and Corporations Law 3rd ed. (2017), LexisNexis Butterworths Australia.

2. From Part 1 - Business, Chapters 2 to 6 on Contract Law, refer to the Problem Questions at the end of the chapter and choose one (1) question. Note: it must be a case problem-type question and not a short answer question.

Question 1:
Swimmingpool Co Pty Ltd ISwimmingpool Co) employs Martin as the manager of their Tasmanian sales division. Martin is to quote to potential customers on the cost of installing the various pools that the company offers, draw up any new contracts on behalf of the company and, further, ensure that a deposit is paid by potential customers. These monies are then deposited in the company's bank account. Martin is on a fixed salary but his contract of employment allows for the payment of a bonus if he exceeds his annual target of signing new customers.

The company is very impressed with Martin in the first month of his employment: he has signed at least 20 new customers and work has begun on at least half of the new projects signed.

After another month has elapsed, the company receives a number of complaints from customers who claim that the construction of their swimming pool is substantially different to what they had contracted for. A number d customers were given wrong advice on the suitable placement of their new swimming pool, which means some newly constructed pools are sinking into the ground, the repair of which will cost the company considerably. It appears also that some of the deposits have not been paid into the company's bank. Martin appears to have kept part of the money collected. The company also discovers that Martin is in the process of setting up his own business, which wig compete with Swimmingpool Co. in considering the facts above, make some legal observations on the following:

(a) Is Swimmingpool Co liable for Martin's actions? On what basis in law would this be the case?
(b) Can the company claim they are not liable for Martin because he has not followed instructions? Explain.
(c) Is Martin liable to his employer for any of his actions? On what basis in law would he be liable?
(d) Has Martin breached any law if he is planning to set up his business? Explain.

Question 2:

Ming runs a hair salon called Australian Hairlines (Hairlines). Ming decides to promote the business by advertising a 'special offer' in the local paper. The advertisement he places in the local newspaper states that 'Hairlines' will, on the production by the customer of the advertisement, give that customer a haircut at the low price of $10.

The day after the advertisement Is published, some 50 people arrive at the salon asking for the special haircut at $10. Ming is overwhelmed by the response and realises that the salon will lose a lot of money if this promotion continues. Ming decides to put up a sign in the salon's window that states:

THE OFFER OF HAIRCUTS AS ADVERTISED HAS NOW FINISHED.

Explain the law as it applies to the following persons:
(a) Forty customers produce the advertisement before the notice goes up in the window. Are these customers able to enforce any legal agreement? (Explain with specific reference to contract law.]
(b) Ten customers do not have the advertisement with them, but still want to participate in the promotion. Are these particular customers able to enforce any agreement?
(c) Could Ming argue that the payment of $10 is insufficient for the promise of what would normally be a $60 haircut, and consequently there are no legal obligations on the business?

Ming believes he has now withdrawn the promotion and has no further obligation to provide cut-price haircuts. Is this correct?

Question 3:

(1) (a) Alan enters into a contract to build a granny flat at the rear of Joan's property at a cost of $55,000 with construction to be completed within rfour months from the date of the contract. Alan orders the building materials from Jeff who runs the local timber and hardware store. The building materials are delivered a month late, though Alan tells Jeff that should not be a problem and accepts delivery of them. A week later, Alan changes his mind.
Advise Alan of his legal position.

(b) Alan constructs the granny flat to frame stage and refuses to complete the rest of the project for reasons unrelated to the contract. Alan claims payment of $15,000, being the value of the work done to date.
Advise Joan.

Question 4:

Gary runs a metal fabrication business in inner city Melbourne and has a long-term lease of his factory. He has just won a tender to supply metal frames to be used in the construction of a high rise apartment development. The contract for supply of the metal frames will commence in six months time and there will be work for about 18 months of the project, which is estimated to last two and a half years.
A month before the first work orders are due, Gary is informed by his landlord that the state government, as part of the new East-West Tunnel Link project, has compulsorily acquired the property and he has to vacate the premises within six months in accordance with the terms of the lease. It will take Gary time to find another factory and could take another three to six months to set up the factory to commence production of the metal frames.
Advise Gary in relation to the contract to supply the apartment developer.

REMEDIES FOR BREACH OF CONTRACT: SPECIFIC PERFORMANCE, INJUNCTION, DAMAGES

Question 5:

Frank has been found to have breached a contract by the court, which awards damages of $100,000 against him. He feels the award of damages against him is excessive in view of the loss suffered by the plaintiff. He feels he is being punished by the court.
Advise Frank about the purpose of an award of damages.

Question 6:

Alana enters into a contract to purchase a new house that is subject to a 90-day settlement. She pays a deposit and organises her finance. In the meantime, she sells her own house, the proceeds of which will be used to complete the purchase of the new house. Unfortunately, the sale of Alana's house does not proceed on the due date and Alana has to arrange bridging finance at a much higher rate of interest in order to complete the purchase of the new house. Alana sues for breach of contract and seeks an order for damages, including the additional interest charges incurred. Advise Nana.

Question 7:

Julie is the sales manager for Dresswell Clothing Pty Ltd. Her contract of employment provides for a salary of $95,000 a year plus a car and bonuses based on sales. The contract provides that either party Can terminate the contract on giving three months notice. Julie is sacked on the spot following a board meeting at which it is suggested that she is falsifying sales figures to increase her bonus payments. It is subsequently discovered that the allegation as to the false sales figures is untrue. Julie sues Dresswell Clothing Pty Ltd for three months' salary, her unpaid bonuses, and damages" for loss of reputation and mental distress. Julie also takes six month to find equivalent paying employment due to the global financial crisis. Advise Julie.

3. In not more than 1,000 words, answer your chosen legal case question using the IRAC method.

4. Your answer must be supported by relevant law and cases decided by Australian courts (preferably the High Court) and/or scholarly articles. A minimum of 3 references are required for this part of the report.

5. Your references must be listed in a Reference list at the end of the Part B question.

PART B: CORPORATIONS LAW QUESTIONS

1. Again, refer to Business and Corporations Law 3rd edition by Fitzpatrick et al.

2. This time, refer to Part 2 - Corporations, Chapters 7 to 10 on Corporations. Refer to the Problem Questions at the end of the chapter and choose one (1) question. Note: it must be a case problem-type question and not a short answer question.

Question 1:

Lucy, Seamus and Koo are students who are keen to earn an income in their spare time to finance their studies. Lucy has a truck, Seamus owns a lawnmower and Koo has a computer. They print flyers advertising LuSeKo Mowing Service [wsego) their registered business name, which they drop in to neighbourhood letterboxes.

Within a short time, LuSeKo has a list of regular clients. Seamus cuts the grass, Lucy removes the clippings in her truck and Koo keeps the accounts.
Seamus decides that they need an industrial ride-on mower and orders one from FastCut Mowers in the name of LuSeKo. Lucy and Koo were not consulted about this purchase.

Meanwhile, Lucy develops a separate business relationship with many of LuSeKo's clients by removing rubbish from their properties on weekends while Seamus and Koo are busy studying. These clients pay Lucy in cash, which she deposits into her personal bank account. Lucy does not disclose these jobs to Seamus and Koo.

When FastCut's bill arrives, Koo is particularly upset when she realises there is insufficient money in the LuSeKo bank account to pay for the ride-on mower.
Then, while operating the ride-on mower, Seamus hits a stump and is flung under the rotating blades. He later dies as a result of his injuries.

(a) Are Lucy, Seamus and Koo carrying on a partnership?

(b) Assuming that Lucy, Seamus and Koo are in partnership, would Lucy and Koo be liable to contribute to the purchase of the ride-on mower?

(c) Is Lucy in breach of any partnership duties as a result of carrying out her weekend work?

(d) If Fastcut wishes to commence a legal action against LuSeKo to recover the purchase price of the ride-on mower, how could FastCut discover who the individuals are behind that business name?

(e) What effect will Seamus's death have on the partnership?

(f) How would Lucy and Koo determine what is partnership property? How would the partnership's property be used to meet the LuSeKo's losses?

Question 2:

You have discovered a low-cost way in which people can brew espresso coffee drinks on their stoves at home, without the need for expensive coffee-making machines.

You want to form a company as a vehicle to market your discovery and your company to consist only of your family members.

You want the words 'Anzac Coffee' to be part of the company's name, to identify it as having a truly Australian flavour.

You envisage that, by the end of its first financial year, your company will have gross assets of at least $5 million, employ 20 people full-time and have gross revenue of $10 million.

Your five-year plan shows that, by the end of that period, your company's assets will have increased to $13 million and have estimated revenue of $26 million. By that time, however, the company will only need to employ five people full-time, with another 66 employed for half the time of a full-time equivalent.

Explain what type of company you would apply to register with ASIC, how that company would be categorised at the end of its first financial year, and whether it would remain in that same category in five years' time.

Also, could the company name include Anzac Coffee'?

Question 3:

Adam and Poh, two young entrepreneurs, wished to form a small proprietary limited company to operate a restaurant. The company was to be called 'Master ei Plate Pty Ltd'. On 22 February, Adam entered into a contract with Irish Linen Ltd to purchase 18 monogrammed tablecloths. He executed the contract in the name of Master Plate Pty Ltd (Master Plate).

On 24 February, the proposed company was registered. The company did not adopt a constitution. Adam and Poh each took 50 per cent of the issued. capital, and both were appointed as directors. Due to a dispute between Adam and Poh regarding the contract with Irish Linen Ltd, that contract was not ratified by Master Plate until 30 March.

On 1 April, Adam orders restaurant-quality cutlery from Carvers Pty Ltd. Adam affixes the company seal to the contract and signs it. What assumptions are Carvers Pty Ltd entitled to make?

It is now 1 May. The tablecloths supplied by Irish Linen Ltd have been deliverec
to Master Plate but not paid for. Explain who may be liable to pay for them.

Question 4:

Borisda Builder Pty Ltd has five directors: Vesna, Sergey, Ilyych, Mikhail and Zviad.

Mikhail and Zviad are working directors. They manage the day-to-day operations of Borisda Builder Pty Ltd. The company is engaged in all aspects of home building.

Ilyych is an accountant and he helps out with the production of monthly financial reports for all the directors.

Vesna has attended university and holds an engineering degree and a Master of Business Administration [MBA). She has a good knowledge of the building industry and the way company finances work.

Sergey is Zviad's brother and has a long history of depression and lack of self-esteem. Zviad supported Sergey's wish to become a board member even though he offered little by way of expertise. Zviad thought that it would help Sergey's personal development by giving him a different focus.

Borisda Builder Pty Ltd had a record year in 2015. A government first home buyer's grant meant that the company had many building contracts. The directors met in July of the current year and decided to pay a dividend of 9c per share.

The company has experienced a severe decline in new contracts in the last two months. This is due in part to a number of cut-price builders offering cheap building contracts. This has placed the company in financial difficulties. Mikhail and Zviad have been with the company since day one and are attached to it. The company is their main focus and provides them with emotional and financial wellbeing.

Sergey has never read any of the company's financial statements that have been sent to him. He did not check the company's financial returns for any of the years before he was appointed and he has never read any reports since he Was appointed.

The shareholders of Borisda Builder Pty Ltd number 15, and include the directors and members of the founding family who have held onto their shares but take little interest otherwise.

Vesna's brother Doug has a building design company, Doug the Pty Ltd, and Vesna attends its board meetings and gives advice. Beca . . her education and experience, the board of Doug the Designer Pty Ltd 10,1, her directions. Recently, Borisda Builder Pty Ltd contracted with Doug 4 Designer Pty Ltd. It was Vesna that convinced the rest of the board of Boris ; Builder Pty Ltd to enter this contract. It was also Vesna who collected all ti e quotes for this contract work, which all exceeded Doug the Designer Pty 1-td's quote. This was due to the fact that Doug the Designer Pty Ltd put in a quote below the cost price of the work because Vesna promised there would be more work from Borisda Builder Pty Ltd in the future.

Ilyych attended a Borisda Builder Pty Ltd board meeting a few months ago and brought with him what he believed was a great idea. His proposal was that the company become involved in constructing cubby houses for children out of the leftover materials from around the company's building sites. The other board members were not so convinced, but Ilyych, being an accountant, produced some very impressive figures based on information from the company's files The board voted against the proposal after Vesna, with her MBA training, argued that the company should focus on its main area of house building.

Ilyych is disappointed, but yesterday signed a deal with another building company known as Canweafixdat? Pty Ltd. The deal involves Ilyych being paid commission of 10 per cent for every cubby house sold and a place on their board Borisda Builder Pty Ltd is having financial problems, yet the board continue, to allow the company to trade without considering the consequences.

Discuss the statutory and common law positions of the directors.

3. In not more than 1,000 words, answer your chosen legal case question using the IRAC method.

4. Your answer must be supported by relevant law and cases decided by Australian courts (preferably the High Court) and/or scholarly articles. A minimum of 3 references are required for this part of the report.

5. Your references must be listed in a Reference list at the end of the Part B question.

GROUP PRESENTATION

1. Summarise your answers for Parts A and B of the group report.

2. Present and discuss the summary of your answers in 10 minutes (5 minutes for each part).

3. The Presentation will be done in class or video recording. Your lecturer will advise which is more appropriate.

a. Whether in-class or video presentation, all members must present. The group will be marked down if not all members present.

4. Video link must be uploaded to a publicly-viewable video sharing platform (ex. Youtube, Dropbox, Google drive) and the video link uploaded on Blackboard.

5. A video presentation consists of both images and audio. For this reason, a plain Power Point presentation showing slides even with accompanying voice recording is not considered a video and, hence, not allowed.