Business and Corporate Law

1
 Table of Contents
PART A: Contract Law ............................................................................................................. 3

References .................................................................................................................................. 6

PART B: Corporations law ........................................................................................................ 7

References ................................................................................................................................ 10

2
PART A: Contract Law
OPTION 1

Issue

This example is a problem with contract law. As the chain of restaurants continued for the past
year, SOO Burgers organized a successful competition to boost sales in Australia and New
Zealand. They were promoted to the so-called fair drink deal. The advertisement laid by the
company stated that the consumers who will collect the tokens will have the chance to win a
new Mazda CX-9 while collecting 50 tokens in the context of hamburgers. However, the
problem arose when more than one person went to SOO Burger headquarters claiming that he
had recovered the packaging and was rewarded. When the company learned that more than one
consumer was going to the office, management had announced that the block was blocked due
to a printing error.

Rule

Australian Consumer Law protects in the context of unfair contractual terms. An appropriate
contract requires contract terms, interest-free offers, and third-party agreements. Regarding
Corporations Act 2001 (Cth), any company registered with CN, ARBN or ABN is interested
in securing the right of the company. In the context of contract law, the contract will be
applicable if it relates to any property or immovable property other than PPSA. In this case,
consumer law plays an important role1. This can be applied following Australian law where a
contract misleads the client and uses the predetermined terms of disposition. ACL provides
customers with product protection frameworks, regulatory and legal frameworks, enforcement
capabilities and new penalties. Consumer classification is divided into broad categories. One
of the most important is that fraudulent and fraudulent contracts will not be entertained. In the
face of such national behavior, one can seek remedy. But the case could be explained similarly
to Bill K. Taylor (1967), who also pointed out that a company may choose not to advertise and
may have several laws and approvals, in which case bookings are not guaranteed. It is the
responsibility of the consumer2.

1
https://www.premiers.qld.gov.au/publications/categories/policies-andcodes/handbooks/welcome-
aboard/member-duties/corp-act-2001-c.aspx
2
https://www.australiancontractlaw.com

3
Offer is considered as one of the essential attributes of contract law. Offer on this basis is a
promise that is made to exchange. This is the material that can lead to completion and
discussion. The validity of a contract was usually a case in the context of this feature known as
Carlyle V. The Carbonic Smoke Ball Company (1893), the supply chain, is playing a very
important role3. Creating an unfair contract is not the legal honor of a company's consumers.
Another important factor is the rejection clause. If the Company holds this clause, no liability
for damages will be assumed. Another case of Fisher v. Bell case (1961) has proven that
genuine offers are not primarily invitations and offers, which means customers cannot trust the
company4.

Application

In this case, the terms of the contract law can be applied. However, Australian contract law is
not made by any law introduced by common law. The application is simple in this case because
the company is not subject to contractual compensation regarding this case. A contract is
generally a lawfully requisite feature. However, the advertisement was not legally binding. In
this case, customers will be able to sue Mickey and Brett under the Australian Consumer
Protection Act. However, since there was no legal situation between the parties at stake, the
firm would not be questioned. In the context of the agreements in Dickinson v Dodds (1857)2
Ch D 463, CA, also found that it was not necessary to communicate directly in case of a break.
In this context, tenders will usually be withdrawn before they are accepted5.

Advice in context to SOO Burger

In this regard, SOO Burger has placed an ad and will have its alert. When SOO Burger's
management learned that more than one person was claiming a car, the printing problem
showed that the company could easily subject it to the terms of the contract law. If there is a
written agreement between the parties, then the contract law can be challenged if the client
does not get the desired result. It was simply an advertisement made to increase their
advertising.

3
Carlill v Carbolic Smoke Ball Company [1892]EWCA Civ 1

4
Fisher v Bell (1961) 1 QB 394

5
Dickinson v Dodds [1857]2 Ch D 463, CA

4
The company easily understands that it has put pressure on the requestor and is not at risk of
printing errors. Since it was not a legally binding contract, the company was not required to
pay the token recipient. Since there was no written agreement to the claim that has been made
by the consumers, the company will not be subjected to any kind of loss.

Advice in context to the positions of Mickey and Brett

Customers were annoyed as they thought the company would deliver the car when they
received the ticket. Mickey and Brett under the Consumer Protection Act can sue the
organization. The Consumer Protection Act states that no misleading information can be
applied to consumers. Mikey and Brett both said they retrieved the tokens and reached the head
office where they were supposed to show the tokens. But it was announced by the company
that it was printing error and hence they cannot provide the car. Since no valid agreement was
made, the company cannot be brought in context to legal terms. The company easily can escape
by stating that it was just a promotional strategy to cater their products to a larger audience.
Since the features of the contract law were not initiated by the company, the allegations made
by the consumers will not be valid in court of law.

Conclusion

As per the aforesaid discussion, it can be said that the problem is primarily a concern for the
customers as the company will not be liable at any cost to the customers under contract law.
Contract law generally has five features, and if no features are met, the contract will be treated
as a standard, not as a legal ad. Thus, the case further indicates that consumers cannot take
legal action in the context of the Mickey and Brett as no valid contract was made by the
organization. It was just a mere advertisement policy.

5
References
Australiancontractlaw.com, from:
https://www.australiancontractlaw.com [Accessed on: 12th May 2019]

Carlill v Carbolic Smoke Ball Company [1892]EWCA Civ 1

Dickinson v Dodds [1857]2 Ch D 463, CA

Fisher v Bell (1961) 1 QB 394

Premiers.qld.gov.au (2019), from:

https://www.premiers.qld.gov.au/publications/categories/policies-and-
codes/handbooks/welcome-aboard/member-duties/corp-act-2001-c.aspx [Accessed on: 12th
May 2019]

6
PART B: Corporations law
OPTION 1

Issue

In this case, the company Sparkling Pty Ltd operates clothing shops. The clothing shops are
situated in Tasmania. In this case, what happened is that Sara was appointed as the managing
director of the company for a period of two years. Her appointment was indicated in context to
ASIC as a managing director as per her date of appointment. Later she was not appointed
further but she carried on doing her job as the managing director of the company. There was
no return lodged in context to her appointment. The instance arose as Sara was restricted by
the company to lend more than$20,000. If she ever did that it will require her to take permission
from the board of directors. In context to the month of December, the managing director Sara
signed a contract and borrowed an amount of $30,000 from a bank. She did that in order for
the establishment of eucalypt plantation. She did not refer this instance to the board of directors.

Rule

In this context, we find that there is a violation of the Corporations Act 2001(Cth) by the
directors. There is also a breach following the section 588G in context to the Corporations Law.
Corporations Law states that the decision of the directors is needed to be imparted for the
goodwill and good faith of the cooperation. Violation in this regard is an act of violating the
law regarding the Australian Corporation Law. Section 180 (2) in context to the Corporations
law imparts that the decisions taken need to be fair in the part of the cooperation. Section 180
(2) also provides that it is good for a company to be guilty of rendering judgment, unless it is
credible that does not allow a reasonable person to occupy the position of administrator.

Application

The application in this context will be held in terms of the Corporations Act of 2001. The
sections incurred in this regard will be section 180, 180 (1). 180(2) and section 588G6.

Outcome of the case

Since it was clearly mentioned in the contract that Sara cannot borrow a loan of more than
$20,000 but she did that without informing the board of directors. As a shareholder and a
director of the organization under the Corporations Act 2001 (Cth), a director is responsible

6
https://iknow.cch.com.au/document/atagUio485896sl14504541/corporations-act-2001-section-180-
care-and-diligence-civil-obligation-only

7
for the breach if he or she does not act with diligence and care. In this case, it was a violation
in this context as Section 180 (2) clearly states that every decision of the corporation must be
held in context to the goodwill and good interest of the company. The outcome will be that
Sara may be penalized from being appointed as the nagging director of any company for 20
years.

The outcome of this case needs to be in accordance with the Corporations Act 2001 (Cth). Her
intention was wrong in context to the company’s goodwill so she will be penalized under
Section 180 (2). The directors of the organization, if they are subjected to loss by this stance of
Sara, they can sue her. In accordance with Section 180 (2) regarding the Corporations Act 2001
(Cth), the stance was not taken in favor of the company. As seen in context to the case of ASIC
v Rich (2009) 75 ACSR 1 at 636 [7289], the violation was held7. 588G in context to the
Corporations Law 2001 (Cth) states that the responsibility of the director is to avert insolvent
trading. The section can be subjected to apply when the director of the organization incurs a
debt and if the organization is insolvent in regard to that time or converts insolvent. In this case,
it is evident that the company will incur in debt as the amount borrowed is more than what the
company could afford 8.

Difference in the outcome of the case

Even though the loan was imparted in context to the refurbishment of two of the shops, the
outcome of the case would not be different. In the first instance, Sra was not the managing
director by Law as her term had expired and she was working beyond her term. In this context,
she violated rights as a managing director under section 180, 180 (1) and 180 (2). These
sections state that as a director and the shareholder of the cooperation it is of innate importance
that they impart based on diligence and care. But in this case, she was needed to inform the
board of directors about the loan which she did not. This can be subjected as a breach in context
to the Corporations Act 2001 (Cth)9. Section 180 states that the judgment of the cooperation
can be done in context to the proper interest of the company and need not have any personal
interest. Concerning section 588G and 180 (2) and 180(1), this act is a breach. It is clearly

7
ASIC v Rich (2009) 75 ACSR 1 at 636 [7289]
8
http://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s588g.html
9
https://www.premiers.qld.gov.au/publications/categories/policies-and-codes/handbooks/welcome-
aboard/member-duties/corp-act-2001-c.aspx

8
mentioned that the bank did not know anything about Sara's contract or appointment. The bank
in this context did not check the background of Sara before giving the loan as they were more
imparted to check the company background. In this regard, the outcome would be the same.
Sara will be penalized for not acting in accordance t the Corporations Law 2001 (Cth).

Conclusion

The above case stated that it is very important to act responsibly as a managing director of the
company. Under the Corporations Act 2001 (Cth), the director’s duty has been laid clearly. The
directors in this context is needed to act wisely and in faithful terms. In this case, we find that
Sara despite knowing the rules of the company have violated the law and had borrowed $30,000
from the bank. It was clearly stated in by her company that if she was going to borrow more
than $20,000 she had o talk to the board of directors10. The outcome in context to this case will
be penalizing Sara from the position for managing director for 20 years.

10
http://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s180.html

9
References
ASIC v Rich (2009) 75 ACSR 1 at 636 [7289]

Classic.austlii.edu.au (2019), from:

http://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s588g.html [Accessed on: 12th
May 2019]

Classic.austlii.edu.au (2019), from:

http://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s180.html [Accessed on: 12th
May 2019]

Iknow.cch.com.au (2019), from:

https://iknow.cch.com.au/document/atagUio485896sl14504541/corporations-act-2001-
section-180-care-and-diligence-civil-obligation-only [Accessed on: 12th May 2019]

Premiers.qld.gov.au (2019), from:

https://www.premiers.qld.gov.au/publications/categories/policies-and-
codes/handbooks/welcome-aboard/member-duties/corp-act-2001-c.aspx [Accessed on: 12th
May 2019]

10