- Internal Code :
- Subject Code : BUMAN103A
- University : Tafe NSW
- Subject Name : Business law
Case Study: J & D Fine Arts Pty Ltd
Ans A.
i) The first term of the contract proposes to the fact that the parties will agree regarding the essence of time which must be considered under all the aspects of the construction activities and payments during work. It is important to know that in any contract certain terms are either implied by nature or expressed by law. The first clause can be a term of condition as well as warranty which imposes a particular fundamental term and can be considered as the heart of a contract. So the first clause of the contract can be considered as an innominate term as it only mentions the time is of the essence and no particular duration has been provided in the clause1. The second clause of the expressed condition and the third clause is the express warranty term. In the second clause the court will determine the remedies as the change may become significant or not and this depends upon the client. For the third clause, it is an expressed warranty and here the client may terminate the contract.
When a specific time is not been provided therefore it is very difficult to define as to whether the clause is of condition or warranty. Understand the situation the remedy for the beach will be determined by the court. The second clause of the contract which talks about the measurement of a high freestanding white marble player to be of 2x2 meter on either side of the front wall and the condition that the marble has to be of a great quality and a local recycle marble which must be used by the contractor. So it is also a condition term which has been included in the contract. The third clause mention under the contract will be of a warranty. It has been mentioned in a clause that declined hereby agrees that the progress of work will be inspected by the contractor and the independent contractor will not be permitted on the site during any time of the construction.
The clause refers to the term of warranty as it is a statement of assurance regarding a matter under the contract 2. Apart from this the second clause can also be referred to as an innominate term because the condition of building a pillar will have a substantial effect on the aggrieved party. So the term in the contract regarding time is of essence can be considered as an innominate term because it cannot be defined as a warranty or condition and under such case the party will seek the remedy in order to fulfill the obligations for the innominate term.
ii) Here the remedy will be determined by the court 3. If the court appointed that there is a breach then the remedy will be provided upon the basis of the gravity of injury occurred due to the breach. it is important that the breach must be of a substantial nature and must be viewed more than a condition for claiming damage in such a way that the contract is terminated. If the court opined that it is a matter of failure to fulfill a warranty, then the injured party may claim damages, but cannot terminate the contract. The contractor must build a 2x2 meter freestanding white marble pillar under any situation if the contractor builds only 1.98m high pillar which does not amount to 2 meters under clause 2, then this is a clear breach of contract.
This will provide the right to the aggrieved party to terminate the entire contract all the breach will give rise to claim damages from the party. Under section 2 of the Competition and Consumer Act 2010 (Cth), the consumers are protected by maintaining and promoting their trade4. Several statutory remedies are been provided under the Corporations Act 2001 (Cth). Also under section 200 to 200J, it has been mentioned that parties have to pay a certain amount of money as a form of damage for the breach of contract5.
Ans B.
i) Few elements need to be present at the time of making a valid contract when it is formulated electronically. It is important to know that all the transactions that are formed through the platform of the internet, there has to be a presence of consent which can either be in a form of implied consent for express consent6. To make a contract via the internet it is important that certain elements of contract law present under such transaction. The presence of offer and acceptance, consideration under any form, and at last the parties must be having a capacity to enter into a contract7. All of these requirements are also the essence of a contract which has formed electronically. The customer must undergo various steps to formulate and validate a transaction under e-commerce.
In the present facts and circumstances of the case the sale of the fine art bird painting can be categorized and be purchased via click-through agreement. Click-through agreements are usually adopted by the parties under which the customers have to scroll down to the terms and conditions of the contract and then and after they can validate by accepting the contract. So the online transactions must be governed under the term of contract law and the customer must be provided an opportunity to go through the terms and conditions of the contract to make the customer bound by the same. The other major elements for creating an electronic contract are that unambiguous notice must be served to the customer that the transaction is governed under the Australian contract law8.
ii) With the help of the Electronic Transaction Act 1999 (Cth) as well as with the equivalent State and Territory Legislation ( ETA), Australia has started developing the legislation to address the business transactions which have been formulated via electronically. With the help of both the legislation, a significant impact can be observed on the use of technology. In the year 2000, It must be noted that the Commonwealth electronic transactions act 1998 came into force to recognizing the importance of information through electronic transactions. The legislation was enacted to promote electronic transactions and communications.
The basic principle of the ETA Act was to provide the same legal status to the electronic transactions of contract as the same as that of the paper-based documents. With the help of the model law which was also adopted by the United Nations Commission on International Trade Law to internationally accept the most secure legal environment by adopting electronic transactions9. Therefore by keeping in regards to the intention of the Commonwealth ETA, legislation that was substantially mirroring the Commonwealth ETA was recognized and introduced as a bill in Australia.
Case Study: Mrs. Jessica Bell
Ans C.
i) Mrs. Bell can challenge the claim of the bank regarding repossessing her home. The claim can be made with the help of the maxim, known as est factum10. This defense can be used by Mrs. Bell because it is the defense that is available to the parties who had been not provided a proper opportunity to go through the entire document. Mrs. Bell has become the guarantor for the loan for her daughter and the fact cannot be denied that Mrs. Bell was partially blind and was not in a condition to read or write the document for the loan. Also it is mentioned that the bank officer had attended the hospital and had handed the process while saying that "all is good". However when the deed was signed, two years later the business failed and the bank had possessed the property of Mrs. Bell.
Therefore on this ground Mrs. Bell can establish in the court of law that she might have not signed the date if the confidence was not given by the bank officer and therefore she can avail the defense of non est factum. The Australian government aims to provide confidence to the people in the Bank's customer deposit system as well as in the financial system of the economy. The present case refers to the fact that Mrs. Bell had being convinced by the banking officer and the officer had not asked the mother to seek any professional advice to go through the provisions of the document.
Under the banking Code of Practice and the Consumer Credit Code has mentioned the extensive disclosure of information must be provided by the end of the creditor which is not there in the present situation11. To take a defense of non est factum, the party must not have committed any fault on his or her part and the fact must be established that the parties assigning as a character were unable to understand the terms of the contract and that particular point. Mrs. Bell was partially blind and unable to read or write anything and that particular point of time. Also message believers under a belief while signing the contract that the business may likely flourish in the future which was not the case stated under the document. Therefore in the present case Mrs. Bell can prove in the court of law that due to her disability she was not able to go through the clauses in the document and had signed the same in good faith.
Therefore acclaim can be made against Bank for repossessed the property by Mrs. Bell. The ethical issue raised in this case is that the bank officer had misled Mrs. Bell by not stating the exact terms of the document due to which she had signed. In the present case the banking officer was aware that Mrs. Bell is not in a state to read or see the document so, therefore, it was his responsibility to state the facts of the documents to her12. It is important to know that the contract law of Australia is based upon common law which protects the innocent creditors against the misrepresentation done by the banks13. Therefore under the principles of the Common Law and Corporations Act 2001, Mrs. Bell can take a defense of non est factum.
ii) Mrs. Bell also has the opportunity to appeal in the high court of Australia which is also known as the highest court having the jurisdiction of original and appellate. The territory and state Supreme Court of Australia have unlimited civil jurisdiction but it can hear the claims only to a particular monetary threshold. The amount of property possessed by Mrs. Bell will decide as to which jurisdiction will be applied. In the present case Mrs. Bell can also take remedy from the district court which is the intermediate court having jurisdiction for covering civil matters. Also the federal code of Australia has the jurisdiction that covers all the civil matters that arise under the Australian federal law. These courts specially deal with the matter and hear disputes related to the protection of consumer laws, banking operations, and any other matter related to intellectual property rights or taxation.
There are other alternative dispute resolution options available to Mrs. Bell in Australia through which she can claim remedy against the bank. Arbitration is an alternative dispute resolution process that is based on the UNCITRAL model law14. The domestic arbitration in the territory of Australia is regulated by the uniform commercial arbitration act and it is important to note that section 2 of the act requires the court of law to regard the arbitration process15. Also it is important to know that the international arbitration in the territory of Australia is also regulated under section 16 of the international arbitration act 1974 (Cth)16. Under this process the agreement exists in writing. The parties will agree and will choose an arbitrator under a situation where the parties are not able to decide upon an arbitrator then it is the responsibility of the court to appoint an arbitrator according to the qualifications required. The arbitration process can help Mrs. Bell to seek awards in the form of damages against the bank17.Apart from this mediation and conciliation can also be opt by Mrs.
Bell to seek claims against the bank. Mediation is also an alternative dispute resolution process that can be used by the parties to have assistance by a mediator for identifying the issues and options to reach to a point of negotiation. The mediator may advise the process but has no determinative rule regarding the contents of the issue18. There are a few types of mediation processes where a co-mediation process can be used with the assistance of two mediators. Apart from this the mediation and arbitration process is a hybrid process where the parties first go to the mediation and when they are not satisfied heads to the arbitration process. Litigation is more likely to be effective to assist Mrs. Bell in the present case.
The court procedures are more foreseeable than the alternative dispute resolution as the enforcement of the courts is governed by common law principles and statutes. The Foreign Judgment Act 1991 (Cth) governed the scope of enforcement of the judgments provided by the courts and had referred that the court has the power to issue cost. Arbitration and mediation are not likely to be more effective than litigation because, the courts have the overriding effect upon the awards granted by the arbitrator19. There is a high possibility that Mrs. Bell and the bank does not come to a consensus.
Case Study: Damon and Keith
Ans D.
i) In ‘General Partnership Business’ all of the partners are equally responsible for the management of the business and each partner has unlimited liability for the debts and obligations of the business20. Procedure for undertaking a project- Upon receiving a project, both the partners have to reasonably convince each other about the architectural reality and prospective success of the project based on personal knowledge, skill, ability and experience. Only and only if both the partners are convinced about the project on the same level and in the same sense, and express their consent accordingly, they must proceed to undertake the project. Recommendations- The partners, in the process of convincing each other for a project, must mandatorily record the correspondences ensued between them pertaining to agreements, approvals, doubts, concerns, reservations, objections, etc.
Correspondences could be in the form of any or all prevalent or possible means of communication21. Also, while communicating with the clients, both the partners have to mandatorily mark each other in correspondences with clients and prohibit having private communication with the clients. The partners are legally obliged towards the confidentiality of all such correspondences and the same may be compromised only and only if legal remedy is sought to resolve disputes between the partners.
In ‘Combination of General and Limited Partnership Business’ the individual projects will determine the type of responsibility and liability upon each of the partners22. Procedure for undertaking a project- Upon receiving a project, both the partners have to reasonably convince each other about the architectural reality and prospective success of the project based on personal knowledge, skill, ability and experience (and such convincing has to be properly recorded through any prevalent means, for e.g.-electronic mails)23.If a project is undertaken with mutual consent, the liability cast upon the partners will be as per General Partnership.
If a project is agreed upon by one of the partners but objected upon by the other, then the liability cast upon the agreeing partner will be as per General Partnership which will include absolute and unqualified liability for all the debts and obligations related to that particular project; and simultaneously the liability cast upon the objecting partner will be as per Limited Partnership wherein the liability of the objecting partner will be limited only to the extent of nominal business management.
Recommendations to address possible difficulties- The partners, in the process of convincing each other for a project, must mandatorily record the correspondences ensued between them pertaining to agreements, approvals, doubts, concerns, reservations, objections, etc. Correspondences could be in the form of any or all prevalent or possible means of communication. In case of a mutually agreed project, while communicating with the clients, both the partners have to mandatorily mark each other in correspondences with clients and prohibit having private communication with the clients. The partners are legally obliged towards the confidentiality of all such correspondences and the same may be compromised only and only if legal remedy is sought to resolve disputes between the partners. The Partnership Act 1891 24provides a facility whereby investors in a limited liability partnership may reduce the limit of their liability to that stated in the register. The limited liability partnership must comprise at least 2 partners, at least 1 of whom must have unlimited liability and at least 1 of whom must have a limited amount of liability.
ii) Keith and Damon can protect the graphics of Kieth's house under the designs act 2003 (Cth) of Australia. The section 71 of the Designs Act helps the designers to protect their designs to get exclusive ownership from any infringement25. The visual features and the overall appearance of the design are protected under the act which is inclusive of the pattern, configuration, and shape of the design. It is important to know that the act only protects the aesthetic value of the design which is the requirement in the present case. Therefore Keith and Damon must register their graphic to protect it from infringement for five years from the date of filing the application which may be extended to another 5 years.
By registering the graphics under the act both the party scan enjoy exclusive rights over the use and control of the design. To register the design the graphics in the present case must be distinctive and new as compared to any other design already existing and published in Australia26. The graphic in the present case must not be identical and has to be distinctive and must not hold any substantial similarity with any other design. An application can be filed in the design office of intellectual property in Australia. Therefore with the help of registering the designs under the Designs Act 2003 (Cth), the graphics of Keith’s house can be protected.
Bibliography
Cases
Brand Developers v Ezibuy, Action Sports & Fitness and others [2011] NZHC 50
Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (No 2) [2012] FCA 1214
Cooling Towers Ltd v Paramount (WA) Ltd [2007] WASC 234
Bechtel do Brasil Construções Ltda v UEG Araucária Ltda, 638 F 3d 150 (2nd Cir, 2011).
Brand Developers v Ezibuy, Action Sports & Fitness and others [2011] NZHC 50
Avon finance company Limited v Bridger [1985] 2 All ER 281
Lloyds Bank v Waterhouse (1991) 2 Family Law 23
Gas Lighting Improvement Co. Ltd. v Commissioners of Inland Revenue (1) (1930) 12 TC 503
Hedley Byrne v Heller [1964] AC 465
Dove v. Rose Acre Farms, Inc. 434 N.E.2d 931 (Ct. App. Ind. 1982).
Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, 268
Metropolitan Saloon Omnibus Co. Ltd. v Hawkins, (1859) 4 Hurl & N 87
Poussard v Spiers (1875) L.R. 1 QBD 410
Bettini v Gye (1875) L.R. 1 QBD 183
Legislation/Acts
The International Arbitration Act, 1974
Designs Act 2003 (Cth)
Electronic Transactions (Victoria) Act 2000
Trade Practices Act 1974 [Cth] [‘TPA’]
Corporations' Act 2001
The Partnership Act 1891
Journal Articles/Online sources
Turner, D. 1996, ‘New Consumer Credit Code: A Banking Lawyer's Perspective’, vol. 12, no. 6, pp. 95.
Albert, M. 2012, ‘Arbitration Law in Victoria Comes of Age’, vol. 3, no.1, pp. 78 -98
Atiyah, P. 1984. An Introduction to the Law of Contract, vol. 9, no. 4, pp. 45-67
Flogging, A. 2001. Dead Horse - The Postal Acceptance Rule and Email, vol.17, pp. 151.
The Commonwealth Electronic Transactions Bill, 1999. Ailments and Antidotes by Leif, vol. 1, no.2, pp. 45 – 57.
Ireland, P. 1984. ‘The Rise of the Limited Liability Company’. International Journal of the Sociology of Law, vol. 2, no. 3, pp. 42- 56
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