BTF1010BusinessLaw

COMPLETENOTES&

CaseSummaries

MonashUniversity

CompletedSemester12018

TopicsCovered

1. IntrototheAustralianLegalSystem2. TheLawofContract

OfferandAcceptanceIntentionandConsiderationContentsandInterpretationTerminationandRemedies

3. AustralianConsumerLawConsumerGuaranteesMisleadingorDeceptiveConduct

4. TheLawofTortsNegligenceNegligentMisstatement

5. BusinessOrganisationsPartnershipsCorporations

6. Mid-SemesterCases7. ExamCases

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IntrotoLawandtheAustralianLegalSystem

Topic1AnIntroductiontoLawandtotheAustralianLegalSystemReferences:CACLChapter1AnIntroductiontoLawThenatureoflaw• Lawisallpervasive.Itaffects:

o personalanddomesticlives-exampleso businesslives-exampleso nationalandinternationalaffairs–exampleso media-newsandbroadermedia(TV,moviesetc)-examples

Definition:forourpurposeswechoosethebasicdefinitionoflaw:

Basicdefinition:“lawisasystemofrulesofconductmadebyparliamentsand/orthecourtsthatregulatesorcontrolsthebehaviourorrelationsbetweenindividualsorgroups”:CACL1.20(seeexamples)

Compare‘law’and‘ethics’/’justice’–importantdistinctiontomake.

• Ifyouwanttoknowwhatislegal–wheredoyoulook?

• Ifyouwanttoknowwhatisjustand/orethical–wheredoyourlook?(fordiscussionoftheintersectionoflawandethicsseeCACLCh18)

PartA.AnIntroductiontoLaw

2.Thefunctionsoflaw(CACL1.20)Considerthefivefunctionsoflawbelow–thinkofexamplesofeachfunction:

NB:“SocialValues”arenotnecessarilythesocialvaluesofALLwithinsociety.

The‘ruleoflaw’principle(CACL1.20)• Basicideathatunderpinsliberaldemocraticsocieties:

o “no-oneisabovethelaw”.o Everyoneisboundbythelawo ThomasFuller:‘Beyeeversohigh,stillthelawisaboveyou’.(CACL1.20)

• SeetheWorldJusticeProject’sfourprinciplesindecidingiftheruleoflawapplies(CACL1.20)• ‘Ruleoflaw’compromisedinmanycountries–African,Asian,EasternEurope(withone-party

governments,autocraticrulers,nofreepress,noindependentjudiciary).• ‘Ruleoflaw’principlesarealsorelevanttothecommercialsector(CACL1.20lastpara)

PartB.AustralianLegalSystemInthebeginning…(CACL1.30)

Beginningofthelegalsystemasweknowit

EvolutionoftheAustConstitutionalsystem• Pre-European(CACL1.30)

o Indigenouspeopleshavebeenforover50,000yearso Inthestruggleforlandrights,thequestionforcourtsapplyingthecommonlawwaswhether

‘customarylaws’werecapableofbeing‘asystemoflaws’?• seeMilirrpumvNabalco(CACL1.30)andBlackburnJ’sviewofonwhetherindigenoussocieties

hada‘systemoflaw’§ ‘Whereitwasasked…hasitssanction’

• Europeancolonisation(CACL1.40)o Dutch,PortugueseandFrenchexplorersallvisitedtheseshoresfrom16thcentury….seethenamesof

placesonthewestcoast(egDirkHartogIslandafterhislandingin1616).LaPerouselandedat

MID-SEMESTERTESTCASES

# CaseName Topic Sub-topic Facts LegalIssue Outcome

2 CarlillvCarbolicSmokeBallCo

Contract

Law

Offer Carbolicsmokeballadvertisedtostop

peoplegettingtheflu.Offered100pound

rewardifyoustillgotthefluafterusingbut

deniedtherewardtoCarlillaftershefell

sicksayingtheyhadnolegalobligationto

pay.

Determiningifthe

advertisementisa

legallybindingcontract

orifitisjustpuffery.

Thepromise"itwillcuretheflu"isclearly

stated.Theoutcome"wewillpayyou100

pounds"alsoclearlystated.

Theadvertisementwasanofferthatcouldbe

acceptedandwasalegallybindingcontract.

2 GibsonvManchesterCC(CACL3.80)

Contract

Law

Invitationtotreat Residentsinpropertyownedbycouncil

weretoldinlettersthecouncilwasgoing

tostartsellingproperty.Gibsontriedto

buythepropertybysubmittingan

applicationbutthenwastoldthecouncil

wasnolongerselling.

Hadtodetermined

whethertheletterwas

anofferandthe

applicationwasan

acceptance.

Theletterwasidentifiedasastatementto

treat,theapplicationwasidentifiedasthe

offer,whichwasneveracceptedbythecouncil

sotherewasnolegallybindingcontract.

2 HarveyvFacey(CACL3.90)

Contract

Law

Statements

supplying

information

“howmuchwouldyousellthatVanGogh

paintingfor?”

“Idon’tknow…around$40million”.

“Iaccept…I’llbringthemoneytonight”.

“I’mnotsellingit”

“Yes,youare.Wehaveacontract”Incorr

Hadtodetermineifit

waslegallybinding

Itwasnotastheoriginalpriceof$40mwasnot

anofferitwasmerelyasupplyofinformation

2 PharmaceuticalSocietyofGBvBootsCC(CACL3.110)

Contract

Law

Invitationtotreat BootsCCwasdisplayinggoodsinshop

aisles(likemodernChemistWarehouse)

howeveritwasillegaltosell

pharmaceuticalproductsnotunderthe

supervisionofachemist.

Wasdisplayingthe

offerorismakingthe

purchasethecontract

formation?

Decidedthatdisplayinggoodsisonlyanoffer

totreat,contractisformedatpurchase.Also

makessenseforcustomersotherwisethey

wouldbeunabletochangetheirmindafter

placinganitemintheirbasket

2 HarrisvNickerson(CACL3.140)

Contract

Law

Invitationtotreat Goodsweregoingupforauctionbutthe

goodswerewithdrawnaheadoftime.A

persondidn'trealisethisandstilltravelled

totheauctionandarguedtherewasa

contractthatwasbreached.

Wasadvertisingthe

auctionanoffer?So

wasthereacontract?

Decidedthatadvertisingtheauctionisjustan

invitationtotreatthereforecouldn’tleadtoa

bindingcontract.

2 SmythevThomas(CACL3.155)

Contract

Law

Onlinecontract Onlinecontracts-anaircraftwasputupfor

saleoneBay.Thesellerrefusedtosellto

thewinningbiddersayingthebuyerhasa

contractwitheBay,thebuyerhasa

contractwitheBaybuttheydidnothavea

contractwitheachother

Isthisabreachof

contract?

Decidedthatitworkedthesameasanyother

auction.Thebidsareoffers,theendisan

agreement.Sotherewasacontract.

2 ByrnevVanTienhoven(CACL3.240)

Contract

Law

Revocation Someoneselling1000boxesoftinplates

• 1/10—offerbypostfromLtoNY • 8/10—noresponse.Offerorsends

letterofrevocation • 11/10—offerreceivedbyoffereein

NY • 11/10—offereecablesacceptance-

received11/10 • 20/10—revocationreceived

Agreementornot?

Sincerevocationsare

onlyeffectivewhen

they'recommunicated.

Decisionthattherewasavalidcontractinthe

casesincetherevocationwasnoteffective

untilitwascommunicatedandtheofferwasacceptedbeforethat.

2 ElectronicTransactionsAct(14A)

Contract

Law

Email

communication

Methodofcommunicationmusthavebeen

contemplatedbyparties.

Whentherecipienthasgiventheiremail,

communicationisvalidwhenthe

correspondenceenterstheinformation

system.

Whentherecipienthasnotgiventheir

email,communicationisvalidwhenthe

correspondencecomestotheattentionof

therecipient.

2 GoldsboroughMortvQuinn(CACL3.220)

Contract

Law

Considerationfor

option

• GMhasrighttopurchasepropertyat

agreedprice. • Offeropenforoneweekin

considerationof5shillings • Qrevokeswithintheweek • GM‘accepts’withintheweekandsues

Q

Istheoptionbinding? Theoffercannotberevokedbecause

somethingwasgiveninreturn(5shillings)

thereforeitisbinding.Optionsarenotbinding

otherwisebuttheyofferisbindingifitisnot

revokedbeforeacceptance.

2 HydevWrench(CACL3.280)

Contract

Law

Counteroffer DofferedtoselllandtoPfor$1,200.That

offerwasrejected.Dthenofferedtosell

thelandtoPfor$1,000.Prespondedby

offeringtobuythelandfor$950.Drefused

tosellatthatpricewhereuponPsaidhe

wouldpay$1,000fortheland.Drefusedto

sell.

Wasthereacontract? Therewasnocontract.P'soffertobuyfor

$950constitutedacounteroffer;effectivelya

rejectionoftheoriginalofferandanewoffer.

Oncerejected,anoffercannotberevivedby

subsequentacceptance.

2 Empirnall(CACL3.350)

Contract

Law

Unsignedcontract Twocompaniesenteringacontractbutone

didn’tsign.Buttheystartedconductingthe

contractanyway.Adisputearoseunder

Isthecontractbinding? Itis,becausetheiractionsofcarryingoutthe

contractimpliedthattheyagreedtothe

contract.

thecontractandthepartythatdidn'tsign

saidtheyneverenteredintoacontract.

2 FelthousevBindley(CACL3.370)

Contract

Law

Contractbysilence Auctionofahorse.ThemansaidIwantto

buyyourhorse,ifIdon’thearanythingI'll

assumeyouaccept.Theauctioneerforgot

towithdrawthehorseforsaleandsoldto

someoneelseandthebuyersued.

Isthereavalid

contract?

Nobecauseyoucan'tforcesomeonetoenter

intoacontractbysilence.

2 CrownMelbourneLtdvCosmopolitanHotel(CACL3.760)

Contract

Law

Vagueverbal

contract

Companytakingoutaleasefor5years

withnorighttorenewal.Oralstatement

sayingthatwouldn'tbeanissueandyou'd

belookedafter.Howeverafter5years,the

leasewasterminated.

Whatdoesthecontract

cover?

Decidedthatthatwastoovaguesaying"you

wouldbelookedafter"thereforeisnot

binding.

3 ErmogenousvGreekOrthodoxCommunity

Contract

Law

Intention Employmentofanarchbishopbyachurch

afterhewasenticedtoAusfromUSAto

runtheGreekOrthodoxChurchofSA.

Disputeuponresignationthathedidnot

receiveleaveandbenefitentitlements.

Churchsaidthearrangementwasspiritual

innatureandnotintendedtoforma

legallybindingcontract.

Wasthereintentionto

createacontract?

Therewasnot.Thearrangementdidnotform

thebasisofalegallybindingcontractasthere

wasnointentionforittodosoandassuch,

wasnotenforceable.

3 BalfourvBalfour(CACL4.40)

Contract

Law

Contractsbetween

families

Husband(defendant)promisedtopayhis

wife£30permonthwhilstsheremainedin

Englandduetoillness(heresidedinCeylon

(SriLanka)).Thepartiessubsequently

divorcedandanissuearoseastowhether

agreementwasenforceable.When

agreementwasmade,thepartieswereon

amicableterms.MrsBalfoursucceededat

firstinstance.

Isthecontract

enforceable?

Theagreementwasnotenforceablebecause

thepartiesdidnotintendtocreatelegal

relations. Thisissoeventhoughtheremay

havebeenconsideration.Agreements

betweenspouses‘arenotcontractsbecause

thepartiesdidnotintendthattheyshouldbe

attendedbylegalconsequences.’

3 MerrittvMerritt(CACL4.60)

Contract

Law

Contractsbetween

families

MrMerrittandhiswifejointlyowneda

house.ThegotadivorcewhenMrMerritt

lefttolivewithanotherwoman.Therewas

asignedagreementthatMrMerrittwould

payMrsMerritt£40poundsamonthand

shewouldpaythemortgageandgetthe

housewhenitwaspaid.Attheendhe

refusedtosignoverthehouse.

Isthecontract

enforceable?

Thecontractwaslegallybindingasitwas

writtenandthefactthatthecouplewereno

longerlivingtogethersuggeststhatthey

intendedtotreattheagreementasalegally

bindingcontract.