Commercial Law Of Australia for Completion of the Project

Describe about the Commercial Law Of Australia for completion of the project.

Case Study 1

Issue

There was a contract between the Western Australia University and Marine Construction Limited (MCU). Before the completion of the project MCU felt that there were several construction related glitches and the work could not be completed within the stipulated time period. From the facts given we may derive the following questions:

• Was there any breach of contract between the two parties?
• Was there an element of negligent misrepresentation on the part of MCU?
• What are the remedies available to the university authorities?
  

Rules

In the instant case there is existence of two contracts. However the second contract occurred due to negligent misrepresentation on part of MCU. The original object of the contract was that MCU had to build a hotel which would be turned into a hostel for accommodating students. The initial budget was of $200,000. Before a month of completion MCU declared with several structural problems the project could not be completed within the time period fixed. This was an act of misrepresentation caused by the construction company. Certain elements have to be present to discover misrepresentation like:

• Duty to take should be there within the relation between the person who represents and the person to whom representation is made.
• Whatever that is represented should be false, lacking accuracy and misleading.
• The person to whom a fact is represented must have believed it to be reasonable though it is a misrepresentation.
• The person representing the facts must have conducted himself in an irresponsible manner.
• Due to the misrepresentation and the victim of representation believing upon it, caused monetary loss to him which was detrimental in nature[1].
  

This principle was discussed in Queen v Cognos Inc [1993] 1SCR 87, where the Supreme Court of Canada derived that a person who is claiming negligent misrepresentation has to satisfy that elements of misrepresentation must be present. Again sections 18 and 19 of the Competition and Consumer Act 2010 (Cth) disallow people and organisations from doing acts which are misleading in nature. Though the university can seek for remedy for monetary compensation from MCU on the ground of negligent misrepresentation, it would be extremely tough for the university to prove that misrepresentation was caused by the construction company. In Howard Marine v Ogden [1978] QB 574, the person proving negligent misrepresentation was not able to prove by providing grounds of truthfulness since the registration document was with them which showed the correct capacity^[2]. There was no plausible explanation as to why they could prove that the Lloyds register differed to the registration document. The principle of economic duress also comes into picture while concentrating upon the latter part of the contract. In the case of A Little Company Limited v Gregory Raymond Peters [2007] NSWSC 833 (3 August 2007), it was noticed that Peters was forced to enter into the contract owing to economic duress. Ultimately the accused was held guilty and had to pay monetary compensation for breach of contract[3].

Application

From the laws and examples cited it is established that MCU had misrepresented facts and situation to the university which made the authorities of the university to believe in their representation. This caused heavy monetary loss to the university since they were bound by their tight deadline. They were very particular about their objective to build the hotel and converting it into a hostel. When MCU heard about the public declaration that 150 overseas students would be coming over to occupy the hostel, they decided to squeeze the university for more money for finishing the project^[4]. The university was bound by its commitments so they were compelled to spend more to ensure work was done on time. The University had believed upon the representation made by MCU and for that moment succumbed to the monetary clause since it was necessary for them to finish the work on time. This was not a case of innocent misrepresentation[5]. The construction company was negligent in doing their duties on time. They did not appropriate measures to rectify glitches in the construction nor did they verify whether the project could be finished in time[6]. Before contemplating any of these ideas they entered into the contract leading to several repercussions. The repercussions were not completing the job on time leading to breach of the contract, eliciting more money in the tune of $500,000 to finish the job which put huge financial pressure on the university. The university must prove that more than one element of negligent misrepresentation was present to claim damages for the loss they incurred by paying extra money.

Conclusion

Hence from the case one can derive the existence of negligent misrepresentation which led to the monetary loss of the university. MCU should have made a proper estimation before entering into the contract. If they had done their work diligently, the impending loss could be avoided.

Case Study 2

Issue

There are various issues stand in this case. The most important issue is the breach of duty of care by doing wrong audit by TJC. In this case fraud has also done about $65 million by the company’s chief financial. Another problem aroused because from the company, the ordinary shareholders withdrawn their shares from the company. The question arises:

• Is duty of care has breached here?
• Can Sunflower Company claim damages from TJC for wrong audit?
• How civil wrong is justified in this case?

Rules

An offer or invitation of treat was given by TJC that they have opened firm where they will do free audit and fees will not be taken by them for 4 months. When this offer was accepted by an organization, “Sunflower Bank Ltd”, TJC did wrong audit because of carelessness. The reason can be negligence or lack of skills. As per Commercial act of Australia, it is necessary that any audit department should do proper audit without any negligence[7]. TJC has breached Duty of care by doing careless audit, as his duty was to audit properly. Because of the negligence of TJC Sunflower runs loss.

For example Donoghue v Stevenson case can be given as an example of duty of care. In this case, Donoghue went to a wine shop and the owner of the wine shop was Stevenson. Donoghue bought a ginger drink from Stevenson and after consuming it decomposed snail was found in the bottle and Donoghue was admitted to hospital. This is negligence of Tort and breach of duty of care done by the manufacturer Stevenson. For that reason Donoghue has sue compensation from him under Division 2 for breaching duty of care. As per the case of TJC, “Sunflower Bank Ltd” can sue TJC for doing such negligence[8].

If wrong audit is done and a company runs loss, then it is a civil wrong and the liability comes on TJC for doing wrong audit. If Sunflower sues TJC than under section 50 of Civil Liability Act 2002 the court will award punishment and damages have to be given by the defendant (TJC) to the plaintiff (Sunflower). As the bank lost their finance, so they can claim for it and under section 34 of civil liability act the damages has to payed to Sunflower by TJC.

In perspective of this case one example can be drawn, Perre v Apand (199) HCA 36. In this case a contract was created between the defendant (Apand) and plaintiff (Perre). The defendant was supposed to supply potatoes to the plaintiff which he was supposed to sell in WA, but the defendant supplied bad potatoes which were grown in an infected land. For that the plaintiff become victim and came under economic loss. As per section 34 of Australian civil liability act the plaintiff can sue the defendant and the defendant has to give financial damages to the plaintiff according to court’s order[9].

This state is the common law of negligence, so tortuous liability arises because TJC has done negligence of tort by doing wrong audit[10]. When any mistake is not done intentionally that it can be forgiven but TJC had lack of skill still he mislead different share holders and companies that they will audit their business and did wrong audit and after the wrong audit when the audit report came, it was found that Chief financial has done fraud of $65 million in Sunflower company. Even another audit report of the company done by TJC was also wrong. So the chief financial can be sued under civil liability act and negligence and tort liability both goes on TJC. 

Application

Duty of care is breached in this case which falls under civil liability[11]. TJC is the defendant and Sunflower is plaintiff in this case. If case is filed against TJC then, TJC should give financial damages to Sunflower to maintain good relation give assurance that they will never repeat the same mistake again. Remedy of tort should be applied by TJC to avoid their mistakes further[12]. Sunflower can sue TJC at any under negligence of tort following the acts which is mentioned above but to rescue from that problem TJC should first try to assure Sunflower and other share holders that this mistake should not be repeated as they will hire skilled professionals for audit and follow the rules of contract law[13]. Even apology should be requested by TJC from all the share holders for their mistake. If it cannot be done properly by the defendant (TJC) the, the plaintiff (Sunflower) recover their damages by taking the property of TJC and revelled breach can be committed by them.

Conclusion

Negligence of common law is purely explained in this case. Because of the negligence or carelessness the plaintiff runs loss and remedy of tort can be exempted by him. In this case, Civil liability act and duty of care is also breached which has been described and its penalty has also been discussed and application for both plaintiff and defendant is described above.

Case Study 3:

Issues

A Malaysian importer called Mr. Wills is the agent here who has the authority in the case.  There has been a written agreement between the three parties. There is a valid enforceable contract in this case. There is a cancelled agreement of legal consideration in the given case. The agent is the Fresh Farm where the principle is the rest of the parties. There is a written agreement of agency which lasts for three years and the authority is stated in this case[14]. Will has the eligibility for the 5% commission from the sales made by the Fresh Farm after the contract is terminated. This is the main issue in this case. 

Rules

The agent acts on behalf of a principal person in a contract law which means that the agent has the authority in conducting business as another person. The agent who enters into a legal obligation has the authority in acting as the principle person. For agents in entering into an enforceable contract, certain reference to the principle must be made and good faith must be kept. Many statues are enacted in regulating the relationship of agencies and also the provision of proper solutions when required. Entertainment Industry Regulations 2013 (NSW) and the Entertainment Industry Act 2014 (NSW) are legislations regulating performers’ relationship and their agents or managers. When there is a legal or oral form of contract between the principle and the agents, there takes place an Actual Authority. In a mutual agreement, the agents are responsible with the terms implied. In this situation, there is no occurrence of written or oral agreement.  The agent enjoys the authority but there may be issues arising due to business roles which begins with new companies resulting in many conflicts[15].

In the Abigroup Contractors Pty v Peninsula Balmain Pty Limited(2001) there is a contract between Abigail and Peninsula where it was agreed in Abigail performing constructional activities relating to the discussion of Peninsula with regards to the Balmain factory. A party was

appointed by Peninsula for managing the Project. A conflict happened between Peninsula and Abigroup with regards to the disclosure on part of Peninsula which the agent was the Superintendent. The task is performed by the Superintendent which designed and constructed the project which was a violation to the authority because of which dispute occurred. The judgment that the Peninsula conduct was misleading and deceptive was given by the Supreme Court and Abigail got a sum of six figure in compensation. There is a non-disclosure in the part of the Peninsula with regards to appointing the Superintendent as agent and task performance which is associated with designing and construction of the project resulting in the breach of the responsibilities and the authorities where there is a liable principal. Also related in this case is the estoppel concept where the object cannot be included in the agreement which is made with the agent and the confusion occurs[16].

Fresh Farm had a contract with Diary in order to go to Mr. Will. The contract is enforced by law if the common practice has a relation in this case. Because of lack of authority of Will, there is a termination of the contract[17]. 

Application

There is a contract made between the Fresh Farms in order to go to Mr. Wills who could not be stopped due to partial consent taking place in the contract. The third party has to maintain good faith in the case. In forming a contract, there is a six months gap between Mr. Wills and the Fresh Farms. There is a requirement to use the estopped application because fresh farm is unable to work more than the time period which is mentioned and doing that Fresh Farm is guilty to deal with the agents. Fresh Farm stopped the agreement as the court considered the actions of Mr. Will. There is a legal liability between the three parties for the fulfillment of the content of the contract. Because of the principal negligence, there was an arising of the issue. There was a contract between Fresh Farms and Diary which was legitimate. The act of Mr. Wills should fall under expressed authority and implied authority. Mr. Will could not get 5% from the contract acting outside the authority which is implied by him and rather if the obligations are not binding in the case, then Mr. Will can get 5% from the contract. Fresh Farms requires to read the agreement terms more clearly and if there is a violation of the authority which should not be performed by him. There will be termination of the contract which should not take place but the violation of the contract would result in the termination of the Fresh Farm.

Ratification can be made in this case including the terms of the contract clarifying the terms of the contract on the part which is involved. There was a breach in the authority under the discharge by the violation of the violation of the terms; the plaintiff can demand the damages. There is a certain performance of the task which is mentioned in the contract and damages should be awarded as a successful solution to the issue[18]. There is a solution to the authority violation in Agency Law which is an act which is performed to have the authority in the ratification and the performed act is a legal act of authority.

Conclusion

The Agency law is dealt in this case describing the three parties. Two principals as well as one agent are involved in this case. There is classification of different types of legislations which is described in this case and the conclusion is drawn and proper rules as well as terms of the agreement is required being followed and there would be time life which should not be regulated and crossed which is not violated else there would be economic loss due to the termination between the parties.  The successful execution of the measure would promote the relationship of fiduciary between the Company and Will and reduces the potential of loss of the future clients from the similar identity mistake.

Reflective Summary

I have learned new concept from this assignment which is related to various problems, rules and application under which the rules are solved. Some of the cases was easy to deal and some were little bit complicated. But I gathered idea about various laws such as contract act, agency law, Consumer competition act and Commercial Law of Australia and Civil liability act. The instant case has been very informative and has enriched my knowledge of law. The concept of negligent misrepresentation has been discussed in the instant.

In case 1, the concept of misrepresentation literally meant to me as showing someone something which is not actually true. However the legal meaning to this is quite different and cryptic in nature. I got to know of various case laws which related to the principle of law discussed here. I learnt about various nuances which need to be present to prove negligent misrepresentation. They are step wise in nature which slowly leads to the derivation of the concept of negligent misrepresentation. I also got to know that there is a difference between innocent, negligent and deliberate misrepresentation. The claimant can only claim for damages which are caused by negligent and deliberate purposes. I learnt about the instant case and the situations which led to the loss caused to the university. The university was committed to the deadline which they were supposed to meet and they were compelled to believe in the representation made by the construction company to be true. MCU did not finish their work on time as a result of which there was breach of contract.

In case 2, I have learned about Civil Liability Act and described its features. Breach of Duty of care is done in this case. The knowledge I acquired from this case is about negligence. Negligence is done in this case and that is the reason the plaintiff was running loss and he want sue the defendant for his careless act and penalty has been claimed in this case. Various sections and acts has been mentioned under which it has been learned that there are some rules which should never be breached and if someone do any negligence act then he will be punished under the law which is mentioned in the above cases. It is easy to give solution to the plaintiff in this case but solution for defendant is complex to give. Still I have mentioned both the solution in the portion of application following legal consideration. All the considerations give entity and enrichment to the case law described in the scenario with various examples.

In case 3, I have understood that the agency law is dealt here which describes the three parties. There are two principals and one agent among the three parties. There is different types of legislations involved in this case and there is a conclusion on the appropriate rules applied here in the context of the agreement which is followed and there should be a time life which is regulated and is not violated otherwise there would be a loss in the economy because of the termination of the parties. There is a successful execution of the measure promoting relationship of the fiduciary between the Fresh Farms and Mr. Wills reducing the potential loss of the future clients from similar mistake in the identity of the three parties. I am in favour of the plaintiff who could ask for damage and compensation from the Fresh Farms due to the damage caused by the Company.

By this way all the three cases are described with several acts and I have acquired fair knowledge about several cases from this assignment.

Bibliography

Andrews, Neil, Contract Law (Cambridge University Press, 2011)

Barker, Kit, The Law Of Torts In Australia (Oxford University Press, 2012)

Cullen, Ian, Civil Liability Act 2002 (NSW Young Lawyers, 2002)

Fisher, Simon, Agency Law (Butterworths, 10th ed, 2011)

Fletcher, K. L and K. L Fletcher, The Law Of Partnership In Australia (Lawbook Co, 2007)

Gillies, Peter and Niloufer Selvadurai, Law Of Contract (Federation Press, 2009)

Grundmann, Stefan, "The Future Of Contract Law" (2011) 7 European Review of Contract Law

Monahan, Geoff and Susan Carr-Gregg, Essential Contract Law (Routledge-Cavendish, 2007)

Pratt, Steve, Duty Of Care (Simon & Schuster, 2000)

Radan, Peter and John Gooley, Principles Of Australian Contract Law (LexisNexis Butterworths, 2009)

Stewart, Pamela and Anita Stuhmcke, Australian Principles Of Tort Law (The Federation Press, 2012)

Taylor, Richard and Damian Taylor, Contract Law (Oxford University Press, 2009)

Turner, C. F, Australian Commercial Law (LBC Information Services, 2001)

Willmott, Lindy, Sharon Christensen and D. A Butler, Contract Law (Oxford University Press, 3rd ed, 2010)

[1] K. L Fletcher and K. L Fletcher, The Law Of Partnership In Australia (Lawbook Co, 2007).

[2] Peter Gillies and Niloufer Selvadurai, Law Of Contract (Federation Press, 2009).

[3] Lindy Willmott, Sharon Christensen and D. A Butler, Contract Law (Oxford University Press, 2005).

[4] Geoff Monahan and Susan Carr-Gregg, Essential Contract Law (Routledge-Cavendish, 2007).

[6] Peter Radan and John Gooley, Principles Of Australian Contract Law (LexisNexis Butterworths, 2009).

[7] Peter Radan and John Gooley, Principles Of Australian Contract Law (LexisNexis Butterworths, 2009).

[8] Ian Cullen, Civil Liability Act 2002 (NSW Young Lawyers, 2002).

[9] Ian Cullen, Civil Liability Act 2002 (NSW Young Lawyers, 2002).

[10] Kit Barker, The Law Of Torts In Australia (Oxford University Press, 2012).

[11] Steve Pratt, Duty Of Care (Simon & Schuster, 2000).

[13] Pamela Stewart and Anita Stuhmcke, Australian Principles Of Tort Law (The Federation Press, 2012).

[14] Simon Fisher, Agency Law (Butterworths, 10th ed, 2011).

[15] Neil Andrews, Contract Law (Cambridge University Press, 2011).

[16] Richard Taylor and Damian Taylor, Contract Law (Oxford University Press, 2009).

[17] Stefan Grundmann, "The Future Of Contract Law" (2011) 7 European Review of Contract Law.

[18] Lindy Willmott, Sharon Christensen and D. A Butler, Contract Law (Oxford University Press, 3rd ed, 2010).