Hi6027 Business And Corporations Law Answers

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• Subject Code : HI6027
• University : Holmes Institute
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Commonwealth of Australia Constitution Act 1900

Week 1:

With the Commonwealth of Australia Constitution Act 1900, the Federation or Commonwealth was created. The states vested a section of their powers with the Commonwealth government. The constitution defined the division of powers between the State and Federal Government. While some powers were exclusively with the commonwealth government, some were shared with the states and the remaining stayed with the states. There are 3 types of powers as per the division of powers. (POWERS AND JURISDICTION OF THE HOUSES, n.d.)These are:

• Exclusive Powers are defined as the set of powers that can be exercised by the Federal/Commonwealth Government only. In section 51 of the Constitution, the exhaustive list of areas where Commonwealth can enforce laws has been listed. These include foreign affairs, defense, overseas business, etc. Examples of these powers are listed below:

1. Section 90 – imposing excise duties and customs

2. Section 114 – restricts the states from breeding military or naval army

3. Section 115 – restricts states from manufacturing their own currency

• Concurrent Powers are defined as the set of powers where the States and the Commonwealth exercise powers and make laws jointly. It is an apolitical power that can be exercised by the State as well as the Commonwealth independently, in the same area of the statute. However, under section 109 , in case of a conflict between the two bodies, the State law will be overruled. Examples of concurrent powers include:

1. Tax collection and borrowing money

2. Establishing the court system

3. Laws regarding health, safety and welfare

4. Determining the minimum wages

5. Select areas of international trade

6. Family disputes such as marriage, divorce, custody of children

• Residual Powers are defined the set of powers not covered in the Constitution, are vested with the states. The states have the power to establish and enforce laws in certain areas. These are the powers that were left, after distribution of the exclusive and concurrent powers during the election and delegation processes. Some examples of these powers are:

1. Public health and social welfare concerns

2. Urban planning and development , infrastructure

3. Civil legislation

4. Primary production

Therefore, the distinction between the three is primarily based on the source of power. While powers are vested with the Commonwealth or Federal only in case of Exclusive powers, in case of concurrent powers, the power is shared between the states and commonwealth. In case of residual power, it is with the states only.

Week 2:

a) A contract is defined as a voluntary agreement between two or more parties. It is legally enforceable it must include three properties (Lavar, n.d.):

• It must be an agreement i.e., an offer and acceptance

• There must be an intention to establish legal relations i.e., a promise with legal repercussions in the event of breach

• There must be a consideration, i.e., payment

Unless the contract is regarding the sale of land, property, it may not mandatorily be in writing. Thus, with respect to the vending machine case study, a valid contract does exist. The vending machine is installed at a public place with instructions of how a potential customer can purchase eatables such as snacks and chips in exchange of $3.50. Thus, an offer is being made in exchange of a consideration of $3.50. Anyone who wants to make the purchase needs to insert the coins into the vending machine to show acceptance. Thus, upon coin insertion the person has accepted the offer and is entitled to get the item he or she wishes to buy in the promised quantity, quality and condition of use, as promised before the payment.

b) Since a valid contract does exist, I entered into a contract with the company that manufactures and sells the chips as they failed to deliver the product as per the quality standards as per the Food Standards Agency, they need to adhere to. The company manufacturing these chips can be sued for selling low quality food as a result of inefficient and fault activities. XYZ Vendsolutions Pvt. Ltd. owns the vending machine that lets these companies use it machine on lease. It is a partner with the company selling chips that is extending the offer to the customers.

Week 3:

An infant or a minor is an individual who is less than 18 years of age. He is not an adult in the eyes of law and thus his or her capacity to enter into a contract is limited to the regulations of the contract law. The contract law states that a minor can be a part of a contract, if and only if the contract is not forbidden for minor according to that law. There are three ways in which contracts entered into with or by infants or minors, can be classified (Can a child or a minor enter into a contract?, 2020):

• Valid Contracts refer to agreements regarding necessities and constructive contracts for service. The necessities consist of basic amenities such as food, clothes, medical necessities, house of shelter and all other things important to maintain the minor’s existing social status and living standards. In contracts regarding purchase of basic necessities, the minor or infant is expected to pay a reasonable price or value for these products and services. Another instance when the contract is deemed to be valid, is when it is created for the overall benefit of the minor. Some examples of these benefits include his or her education, future employment or internship, etc.

• Voidable Contracts refer to those contracts or agreements that hold the minor or infant accountable if he or she fails to retract the contract during the period when he remains a minor or within a justifiable time after becoming an adult or attaining majority. These contracts hold the minor or infant binding , if he opts to approve the same during his minority or within an acceptable time of becoming an adult. Examples of a voidable contract include contracts regarding property lease, business agreements, shares, etc.

• Void Contracts are defined as those contracts or agreements which cannot be enforced against the interests of the infant in the court of law. Examples of these contracts include contracts regarding payments for good and services other than necessities, accounts mentioned for non-necessities and loan repayments.

Week 4:

The legal doctrine of contra proferentem is defined as a contract law that states that any clause appearing to be vague or ambiguous show be construed against the favor of the party that established, initiated and demanded that clause to be included. The contra proferentem rule defines the roadmap of guidelines for the legal elucidation of contracts and is usually applicable for those contracts that are disputed in the court of law. (Herbert, 2017) In this situation, all the parties to the contract are on the lookout of their own interests and wishes the language of the contract to be in favor of the respective parties. This arrangement leads to ambiguity in the terms of the contract that might have more than one meaning, misleading one or more parties to interpret the contract differently.

In the current business environment, the rule of contra proferentem is defendable. The courts can adopt a multi-level procedure in deciding whether or not the legal doctrine of contra proferentem is applicable while reviewing the contract. The first step is to evaluate the language of the contract to decipher whether or not it is ambiguous enough to raise uncertainty. If the clause if considered to be vague or unclear, the court then implements the next step. The second step involves the court determining whether or not the introducing or initiating party drafted such a contract on purposes. Their intentions are evaluated. If the intention of the drafting party is not considered to be ambiguous or unclear, then the contract is applicable and reviewable basis the evidence produced. Despite the evidence, if the ambiguity in the contract language is not determined, then the doctrine of contra proferentem is applied and the court rules its decision against the initiating party that established the contract or the unclear clause to be included and favor the bereaved party.

However, there are opportunities in cases where the Court of Appeal advocated the judge’s decision which allowed the natural meaning of the language used by the parties and business common sense. In this scenario the Court of Appeal refused the application of the doctrine of contra proferentem.

In the example of the decision ruled in the K/S Victoria Street versus House of Fraser and Transocean Drilling versus Providence Resources, a differentiation between the doctrine’s application to exemption clauses and indemnity clauses was established by the Court of Law. It was accepted that the exemption clauses were established as a general principle of the contractual tool for the allocation of risk in business contracts. There was no need to cater to these clauses with an attitude to cut them down. However, the Court of Appeal did not apply the same reasoning to reparation clauses on the grounds of obiter, that these were now relevant to these clauses as established in the Canada Steamship guidelines. While the possibility of application of the contra proferentem rule in case of indemnity clauses in business contracts, was left open by the Court of Appeal, in practice it is applicable for both indemnity and exemption clauses. Furthermore, the doctrine was established for blaming the party that initiated the contract or the ambiguous clause in the contract. It was created as an admonition as well as a penalty or legal consequences for intentionally including a vague contract clause. This is based on the understanding that the party purposely created an unclear clause to favor results in his interests.

Week 5:

A layoff is defined as the termination of employment as and when deemed fit by the employer. It can be short-term or permanent depending on the changing objectives of the firm. These reasons include cost cutting by downsizing, changing market environment affecting demand and supply conditions, changes in technology, etc. However, based on the case given it is different. Amina was involved in certain economic circumstances because of which she refused Bryan the job as she no longer required his services. There was a legal agreement between the two that was made, while extending the job offer. (Dismissal: your rights, n.d.)

There is an anticipatory breach of contract, when Amina suddenly announces a few days before Bryan’s onboarding, that she no longer requires him for his services as a delivery man. There are two scenarios arising out of this situation where Bryce can sue Amina as despite of a new job offer in hand, he continued to work with the existing organization will his new job started. After it was made known to him the reason behind rejecting his job offer, he can continue working with the old organization. However, had Bryce left his old company and his current job offer was taken back without citing valid reasons, it would have rendered him jobless and cause breach of contract in disguise.

The labor welfare law states that if a recruiter withdraws a job offer, the affected person can raise a case of concern against him. However, economic conditions are unpredictable and can rise at any point in time. Similar to the case in this question, Amina hired Bryce as a delivery man but due to economic uncertainties cities by her, she cannot afford to pay his salary any longer. Thus, he was informed much in advance about the job termination so he can look for an alternative job accordingly. Thus, while Bryce can sue Amina, Amina point will be help valid and the decision might not be in his favor. Given the current situation of Covid-19, companies are facing an all-time demand low, causing delay in payouts to suppliers and loss of revenues, could also cause employment terminations. Thus, Amina might not be held responsible for Bryce’s jobless situation for citing economic problems.

References:

• POWERS AND JURISDICTION OF THE HOUSES. (n.d.). 
• Lavar, N. (n.d.). Contracts. Retrieved from https://www.inbrief.co.uk/contract-law/contracts/
• Can a child or a minor enter into a contract? (2020, January). Retrieved from Net Lawman: https://www.netlawman.co.uk/ia/entering-contract-minor
• Herbert, P. (2017, July 12). UK: Contra Proferentem: When To Exclude An Exclusion Cause. Retrieved from Mondaq: https://www.mondaq.com/uk/contracts-and-commercial-law/608284/contra-proferentem-when-to-exclude-an-exclusion-cause
• Dismissal: your rights. (n.d.). Retrieved from https://www.gov.uk/dismissal

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