- Internal Code :
- Subject Code : HI6027
- University : Holmes Institute
- Subject Name : Business and Corporate law
Table of Contents
Week 6
Week 7
Week 8
Week 9
Week 10
Bibliography
Week 6
Facts of the Case –
Barbara, who is a regular customer at Egeeay Supermarket, met with an accident on the pet section one day. The accident occurred due to the inefficiency of the supermarket to clean the floors at a regular interval. It was the duty of the supermarket to clean their floors after every 15 minutes, as stated in their policy. But Barbara fell and got injured due to some grapes that were lying on the ground. This incident happened in the pet section of the supermarket.
Issue of the case –
In this context the issues are –
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Whether the supermarket owes Barbara a duty of care
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Did the supermarket fail, and that causes the breach in the duty of care?
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Will it be any different if Barbara fell on the fruit section instead of the pet section?
Held
The law of negligence derives from jurisprudence or jurisdiction created law. That law has been provided into law in Queensland and is now observed in the 2003 Civil Liability Act. Negligence accusations happen when an individual has got an injury, and individuals assume that some other individual or persons are accountable for the situation that led the damage to take place. There are three basic components of negligence1.
These elements are mentioned below –
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That the individual getting sued called as defendant owed the wounded party called as plaintiff a duty of care.
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That the defendant contravened that obligation of care.
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That infringement of the duty of care resulted in injury or any damage to the wounded individual.
Schedule 2 of the Civil Liability Act 2003 sets out the duty of care. Duty of care implies a responsibility to exercise reasonable care or ability or even both.
Section 9 concerns with breach of duty of care. An individual does not infringe a responsibility to take measures towards the risk of injury, except2 —
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It is a reasonably measurable risk; and
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The danger was not minor; and
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A rational person in the person's situation might have chosen to take the precautionary measures in those situations.
As per the case scenario, it can be seen that the supermarket failed its duty towards Barbara. The three points stated in the negligence can be justified as the defendant that the supermarket owed her that is Barbara, the plaintiff a duty of care. Secondly, they failed to keep the floors clean, which was their duty to do so, and lastly, due to their act of negligence in cleaning the floors and supervising that the floors are clean every 15 minutes, Barbara faced an injury and was wounded. So yes, the Egeeay Supermarket failed the duty of care towards their customer3.
The next thing is that there was a breach in the duty of care. As this has happened before and the supermarket authorities are well aware of the facts that it can cause harm to the customers visiting the supermarket. They should have taken proper care, but they failed in their duty. So this caused a breach4.
According to the case, it can be said that if the same thing has happened in the fruit section of the market instead of the pet section, the answer would have been similar. The market must keep the floors clean, and if any accidents take place inside their premises, they will be liable for that.
Week 7
Facts of the Case –
From the case given, it is known that Mr Brown, a customer purchased a pair of woollen underwear from Galore underwear in Adelaide. Through this underwear, he developed dermatitis because of the existence of soda bisulphite on his pants. Mr Brown wore this underwear without cleaning them before wearing them. Due to such soda present in the pants, he suffered from a disease, and he could not know about such excess soda.
Issues of the Case –
The issue is can Mr Brown applies for any remedies for the damages suffered by him due to such an incident.
Held
Since mentioned in the Australian Consumer Law, any product or service that a customer purchases normally come with a consumer assurance, and if the goods and services are unable to fulfil the assurance it went to, therefore the person is entitled to any substitute, reimburse and even payout forms based on the stage of damage done. If a customer purchases an item and struggles from either a small issue, then the customer can choose whatever solution choice from fixing, removing, or refunding it5. And if the harm is done is severe that the level of harm can be explained by the assumption that if the customer were aware of the harm the item was likely to trigger, it would deter the customer by buying the product, then the customer can ask for compensation from the corporation 6.
In this case, the damage could not be anticipated by the customer that is Mr Brown and he suffered from an infection so he can sue the manufacture for their neglect behaviour.
Week 8
A person entering the business for the very first time, especially starting with a small business, has to take into consideration many things so that he can establish his business as a successful one and attain the business goals. Yet small companies should also explore the option of becoming a franchisee instead of starting up a whole new company.
The advantages of joining a franchise company are -
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Running a franchise doesn't need massive capital investments, so there's no need for extra expenses like any small business faces. The initial cost of starting a franchise is also much lower compared with other types of companies.
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Establishing a franchise doesn't require any prior market or business experience, simply following the business strategies set out by the franchisor is enough for a franchisee to succeed.
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The incorporated risks are less in this type of business since the franchisor brand provides marketing assistance.
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A franchise is operated under the name of a larger brand that is definitely well-known and, therefore, there is no requirement to put extra effort or special focus on the organization's brand name. The franchisor already has a proven and popular brand name, which can add to the company's advantage7.
The disadvantages of joining a franchise company are –
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The franchisor primarily sets out all the forms and methods of business operations in a franchise company, and, for that reason, there is hardly any room for the franchisee to carry out its company by introducing innovative and successful methods on its own.
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The downside to this form to franchise business is the sharing of earned income. Only in exchange for the share of profit can the franchisee affiliate his business to a franchisor brand.
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There's no sustainability assurance as a franchisor isn't bound to renew the franchise agreement after the end of a term.
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A franchisee is forced to rely on the success of the franchiser, which includes the success of the parental brand's other franchisees. So, if the other franchisees do not maintain their business, the franchisee will suffer as well.
Week 9
Salomon v A Salomon & Co Ltd [1897] AC 22
Facts of the Case
Salomon established a corporation with representatives containing himself and his family. Subsequently, when the corporation collapsed, and it lost money, Salomon’s responsibility for compensation from the debentures was to the allegations of unsecured creditors. Salomon being the principal, was personally responsible for its liabilities.
Issue of the Case –
the main point is whether Salmon being the principal will be personally liable for the debts.
Held –
The house of Lord held that a company is an autonomous individual with his or her privileges and responsibilities acceptable to him or herself, and that the intentions of those involved in promoting the business are insignificant when considering what those privileges and obligations8.
The corporate veil, states that a corporation has a legal existence distinct its shareholders. Thus, the shareholders are only liable to the point of their invested capital.
Lifting of Corporate Veil –
A company holds a distinct status from those of its owner's status. Issues start when that corporation's status is misapplied. It's not unfair to imply that although the business is an unreal individual, it could still not operate by itself. Any individual entity needs to be present, just so the organization can execute its operations. When this human action works, in the title of the corporation, not to interrupt the social rule in an attempt to achieve objectives authorized by legislation. When this medium of operational activities starts to get corrupted. In such a situation, the court can lift the corporate veil and held the owners liable for their actions9.
Week 10
Under the Corporations Act, 2001, a company member may be defined as the owner or shareholder of a company, but a shareholder is a person holding shares in the company. The difference between these two terms is quite ambiguous, but it can be said that a member of a firm does not necessarily have to own the company's shares, but a shareholder only becomes a shareholder by buying one or more of the company's shares10.
Process of Becoming a Member
A person may become a member of a company by giving written consent that is willing to be a member of the company and by signing a memorandum at the time the company is registered. Subsequently, he can also become a shareholder by buying company shares.
Eligibility of A Member
Anyone can become a member of the firm. Under the Corporations Act, 2001, the minimum age for becoming a member of a company was not set. The company is, however, entitled to set the age limit as it deems necessary. Anyone can become a member of a company by following the membership procedure.
Deadline for Membership
There are two ways a member of a company can cease membership. The first way is when all of the members' shares are sold or taken over by the company for debt default compensation, or when the member transfers all of its shares to other members of the company and consents to remove his name from the company's register.
There is no upper limit for the number of members of a public company, whereas the minimum number of members should be seven, and the maximum number of members for a private limited company is fifty while the minimum number of members is one11.
Bibliography
Books
Harold Luntz, et al, Torts: cases and commentary (LexisNexis Butterworths, 2017).
Jeswynn Yogaratnam, Corporations law: in principle (Thompson Reuters, 2017)
Joanna Kyriakakis et al, Contemporary Australian tort law (Cambridge University Press, 2020).
Roman Tomasic, Routledge handbook of corporate law. (Taylor & Francis, 2016).
Journals and Articles
Maureen, Brookes et al, ‘Opportunity identification and evaluation in franchisee business start-ups’ (2016) Journal of Service Theory and Practice.
Katie, Innes. ‘Understanding business law [Book Review]’ (2017) (243) Ethos: Official Publication of the Law Society of the Australian Capital Territory 61.
Laws
Corporations Act 2001
The Civil Liability Act 2003
Case Laws
DONOGHUE V. STEVENSON (1932)
Salomon v A Salomon & Co Ltd [1897] AC 22
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