Australian Legal System, Contract Law, Business Structures, And Company Law

Historical foundations of the Australian legal system and the current sources of law

Issue

The issue is to ascertain whether the partnership involving Lance and his two other partner is bound by the contract of sale with Mighty Motors Pty Ltd. In addition, it needs to be ascertained whether the pother partners can take action against Lance for not abiding by the instruction.

Rule

The Partnership Act 1963is the federal law dealing with partnerships and it disputes in Australia (Business.gov.au, 2018). Section 10of thePartnership Actstates that the partnership shall be bound by the act of one of the partners acted on behalf of the firm, authorized to do so. Section 10(1)lays down that an act or instrument that is related to a business of the firm (other than incorporated limited partnership) is binding upon the firm. Therefore, the partners shall be liable to abide by it for a person who has the authorization to execute the instrument or to do the act in the name of the firm or in any other way has executed it. Section 10(2) ays down a similar directive for an incorporated limited partnership and states that the firm shall be bound by the acts and instruments executed by a person authorized to do so. While, Section 12of the above-mentioned Act states that if there is a mutual agreement between the partners of the firm, both incorporated limited partnership and otherwise, which restrict the power of one or more partners to bind the firm. However, the section mentions that the person with whom the contravening act is to be contract must have the knowledge of the restriction of the power of the partner (Business.gov.au 2018).

Section 13 of thePartnership Act 1963lays down the provision for penalty that needs to be incurred from a partner of the firm in case the firm incurs an injury or loss from the act of such partner. The other partners shall be liable to bring charges against such partner under this section (Business.gov.au 2018).

Application

In the given case, Lance was restricted to spend no more than $20,000 instructed by the other partners. However, Lynton, the salesperson had no idea about such restriction on Lance. Lance spend $25000 for buying the Ute. Therefore, section 12of the Partnership Act would not be applicable on the contract agreement. As per section 10of the Act, the partnership firm would be liable to the contract executed by Lance with Mighty Motors Pty Ltd on behalf of the firm. In addition, the other partners shall be liable to hold Lance for the loss of the firm as per section 13of the Act.

Therefore, the partnership between the firm and Mighty Motors Pty Ltd would stand valid and the firm would be bound by the contract. The other partners would be able to take action against Lance.

Issue

To ascertain whether the consumers would have a remedy regarding the false claim of the moisturiser.

Rule

The Australian Consumer Lawguarantees several kinds of protections that the consumers can avail when the safety standards are breached; the consumer law lays down protections like consumer guarantees, product safety information, safety alerts, and etcetera. Provisions for Unfair contract terms and protection from such terms are also incorporated in the consumer law (Consumerlaw.gov.au 2018). The Competition and Consumer Act 2010lays down the provisions for protecting consumers who are influenced by false advertisement promises by companies. Section 29of the Act lays down the provisions that warms companies to indulge in false and misleading representation regarding goods that are offered to the consumers (Legislation.gov.au 2018). Section 33of the Act points out that companies are not to promote misleading information pertaining to the nature of goods sold to the consumers (Legislation.gov.au 2018). Section 35 talks about ‘Bait advertisement’ of the companies regarding the products that are being offered to the consumers, which do not possess the quality or quantity, which is being portrayed in the advertisement. Companies contravening these provisions are to be held liable under the Competition and Consumer Act 2010 and Australian Consumer Law (Australian Competition and Consumer Commission 2018). Section 109 and 114 of the Competition and Consumer Act 2010 states that orders of interim andpermanentban can be brought against such misleading products respectively.

Application

Essential elements required for creating, managing and discharging a contract

In the given case, Xiaojing sells her lavender and Echinacea moisture with a false advertisement claiming that it slows the effect of ageing. It is a bait advertisement that befools the customer to buy the product, which actually does not do the job that the advertisement claims. In this matter, the consumers can claim for a compensation under the Competition and Consumer Act 2010 (Legislation.gov.au 2018). In addition, the consumers can approach the court for banning the product for an interim period under section 109or permanently under section 114of the Act.

Therefore, the consumers shall have a remedy against Xiaojing for falsely advertising the moisturiser.

Issue

To ascertain whether Saqlaim would be bound by the contract that he entered into with the finance company to purchase the car from the partnership firm.

Rule

The Common law of Contract states that an agreement is valid when two parties agrees to do a certain act with a common intention in exchange of a valid consideration, provided that such agreement is not barred by law and the parties to the agreement are competent to enter into such agreement. The essential elements to a valid contract involves common intention of the parties entering into the contract. If one of the parties to the contract have a different intention to which the other party has no knowledge of, then the agreement stands voidable on the option of the party who has failed to understand the terms of the other party (Stone and Devenney 2017).

When a party who has no understanding of English language, agrees to enter into an agreement without understanding the terms of agreement, such party may claim to declare the agreement void at his own option. Such agreement shall be voidable on the option of the party who did not understand the terms of the agreement for he does not understand English. The essentials of a valid contract gives the option to the aggrieved party to terminate such agreement, which he does not give consent to knowingly.

Application

In the given case, Saqlaim has no understanding of English language and knowing the fact, Lance and his partners takes the benefit of it. They tries to sell the Ute to Saqlaim and makes him enter into a contract with the finance company. As Saqlaim has no understanding of English, he does not understand the terms and conditions of the agreement as well. Therefore, it can be said that the parties to the contract does not share a common intention. This makes the agreement voidable at the option of Saqlaim’s wish, whether to continue with the agreement or not. Saqlaim shall have the privilege to terminate the agreement.

Saqlaim shall not be bound by the contract that he was made to enter with the finance company by the partnership firm to purchase the car.

Issue

To advise Felix regarding the actions he is liable to take pertaining to the breach of oral agreement by Xiaojing.

Rule

The Common law of Contract states that a party shall be liable to the promises that he have made to another by way of oral or written agreement. An agreement involves a party, who makes an offer, which is accepted, by the other party to the agreement. An agreement involves two parties who have a common intention to give effect to, in exchange of a valid consideration. The agreement however should not be contrary to the provisions of law and the contracting parties should be competent to contract (Smith 2018.).

In addition, when a party promises to increase the consideration amount in an ongoing term of contract, such promise should be held as a fresh agreement, and the party making such promise shall be liable to fulfill it. Failure to comply with the terms of the promise or agreement would amount to breach of contract.

In the given case, Felix was hired by Xiaojing to pick lavender and was offered to be paid $25 per bag. However, Xiaojing increased the consideration amount and promised to pay $100 extra for Felix’s hard work. This makes Xiaojing liable to pay the extra sum of money to Felix as per her promise. Xiaojing’s refusal to pay the extra money amounts to breach of contract.

Conclusion

Felix would be liable to sue Xiaojing for breach of contract as she was liable to pay the extra money that she had promised.

References:

Australian Competition and Consumer Commission. (2018). Consumers. [online] Available at: https://www.accc.gov.au/consumers [Accessed 25 Nov. 2018].

Business.gov.au. (2018). Partnership. [online] Available at: https://www.business.gov.au/planning/business-structures-and-types/business-structures/partnership [Accessed 25 Nov. 2018].

Consumerlaw.gov.au. (2018). Consumers and the ACL – Australian Consumer Law. [online] Available at: https://consumerlaw.gov.au/consumers-and-the-acl/ [Accessed 25 Nov. 2018].

Legislation.gov.au. (2018). Competition and Consumer Act 2010. [online] Available at: https://www.legislation.gov.au/Details/C2011C00003/Html/Volume_3 [Accessed 25 Nov. 2018].

Smith, J., 2018. Contract law in Australia [Book Review]. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (248), p.60.

Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.