Australian Commercial Law Assessment Answer

Key Topics

• Part –A
• Question 1(b)
• Part B
• Question -2
• Issue
• Rules
• Essential element for valid contract:
• Noncompliance of any of the above condition will create a question for the validity of contract.
• Application
• Conclusion
• Issue
• Rules
• Breach of contract:
• Application
• Conclusion:
• Part C
• References

PART A (10 marks – 600-800 words)

You must choose ONE of the following questions:

EITHER: Question 1(a) Provide a summary of the constitution that your tribe developed in Workshop 1, Tasks 1 and 2, explaining how it addresses the requirements for Hart’s 3-part legal system. Then compare it to how the Australian legal system addresses the same requirements.
OR:

Question 1(b) Research a legal system of a foreign country and explain how it addresses the requirements of Hart’s 3-part legal system. Then compare it to how the Australian legal system addresses the same requirements. NOTE: In either of these questions, you can assume that the marker knows what Hart’s 3-part legal system is, so you do not have to explain it – you just need to apply it correctly.

PART B (20 marks)

Barry was sick of his day job, and wanted to buy a business so he could become his own boss. He saw that a fruit and vegetable store was up for sale at his local shopping village. The owner had posted an advertisement on the notice board at the shopping village as follows:
Highly profitable venture in bustling suburban shopping centre with turnover of $20,000 per month. No competitors. $250,000 plus stock-in-trade. Ring Angelo on 0434 123 456.

(a) Although the shopping village was busy on the weekends, it was very quiet during the week. In the first two months the turnover was only $13,000 per month.
(b) There was a grocery store in the shopping village that sold a wide range of fruit and vegetables.
(c) After six weeks, a man from a finance company arrived at the shop and repossessed the delivery van. It turned out that the van was only leased by the previous owner, and since Barry had not made the lease payments, the lease was in default. Barry’s expenses at the shop had been below $8,000 per month, but if he had paid the van lease, the expenses would have been on average about $8,500 per month.
(d) The loader, which was a small motorised machine for putting pallets on and off the back of the van, was broken down and could not be fixed for less than the cost of replacing it.
You are providing a written report to your supervising partner. To impress him, you want to show that you worked hard at university by demonstrating your knowledge of law and your ability to use it. You need to provide a written report providing the following advices. Question 2 (10 marks, about 800 words)
Advise how Barry might challenge the validity of the contract on the basis of the statements made by Angelo before the contract was entered into. You should consider both common law and statute law.

Question 3 (10 marks, about 800 words)
Assuming Barry does not get out of the contract, advise on the possibility of an action for breach of contract.
NOTE: These are questions where the focus is on your reasoning processes, so you should use the IRAC method. You do not need to repeat the facts unnecessarily, so only refer to the facts of the case to support your argument. Also, only refer to cases to illustrate or support the legal points you are making or the argument you are putting. If you do refer to cases, you need to demonstrate how they are relevant to the facts or argment. Your supervising partner will not be impressed by you simply reciting law without purpose.

PART C (10 marks – YouTube video no more than about 6 minutes in length)
In this part, your task is to take the advices you gave to your supervising partner in Questions 2 and 3 and present them to your client, Barry, in a way that he can understand.

You DO need to explain to him what the law is and how it leads to your recommendations, but it must be presented in a way that a client without legal training can understand.

The report must be done as a YouTube video and the link for the video must be included in your assignment. The video must be set so that the marker can view it. If the link does not work for the marker, you get no marks for this part.
Your face must appear in the video. You should not be reading from a script, but you can use notes to prompt your talking.

Part –A

Question 1(b)

An opinion expressed by the harts, the union of primary and secondary rules of constituters consisting of effective legal system. Further profession state that there must a unique biological system, which required the every individual in society to follow, without any kind of force. These rules are something like a duties, and implemented as a duty imposing rules. This primary rules the highlight the acceptable and desirable conduct of the every individual living and working in the society. Further it also specks about the right and obligation of the civilians. This rule gives a guiding principles for the peoples about his/ her legally acceptable and unacceptable act, under the legal obligation and restrictions, this guiding principle also sum up with the penal clause, for the contradictory or unacceptable acts or behaviour.

While on another hand the secondary rule is known as a power conferring rules.This rule give a background or scopes for creating, alternating, or amending of an existing rules or regulation. for the effective implementation of primary and secondary rules, professor Harts, state that the responsibility for overseeing of primary and secondary rules should be bifurcated between the society at large and public officers, the citizens should oversee the primary rules externally, while the public officer oversee internally of secondary rules.the internal overseeing of rules means to consider the rules as a slandered governing behaviour and support them. Similarly the external overseeing means every individual from society must take a cognizance of existence of primary rules through observation.

In addition to all above, profession Hart has also given a rules for recognition. He express that the uncertainly mainly arise due to lack of recognition, he suggests for creation of system which examining or verify the validity of rules.Such proposal or suggestion profession Hart, had given a birth to the concept of jurisprudence.
In Australia, the legal system is known or recognised as a three tier legal system, which mainly consisting of legislative, executive and Legislative. The Australia has accepted the supremacy of its Constitution and accordingly commonwealth constitution is considered as foundation of legal system in Australia. 

The primary rule of laws as flows from the Australian constitution, show the concern about the acceptable and unacceptable acts of the Australian citizens. The said rules empowers the Australian parliaments to introduce new laws which bound the every citizens of Australia to be follow. The new legislation or rules as if introduced by the Australian parliaments is on the various subject matters. The new rules or legislation may be primarily rules or may be secondary rules. For example the criminal codes or the civil laws are known as a primary rules which imposes the duties over the citizen of Australia. It state about the duties and the list of the penal provision or consequence in case of violation of such rules. While on another hand the law of contract, and or Competition Act are known or consider as a secondary rules. It confers the power to Australian citizen to create, modify or extinguish their relationship with other living in society. Hence the peoples of Australia can determine their relationship with other. The governor general of state Owen the executive power under the Australian legal system.

The judicial system of Australian legal system is wildly based upon the rule of recognition as given by the profession Hart. This rule authorise the Court to examine the validity or viability of primary and secondary rule as it was enacted by the Australian parliaments. This fact had opened the scope for the reviving, analysis the judicial system of Australia.All such facts indicate or ensure to the Australia Citizens that the new rules are not implemented like in arbitrary manner. Which ultimately reduce the possibility of uncertainty and helps in creating trust of fairness.

Part B

Question -2

Issue

The contract to the purchase of business was executed between the Barry and Angelo,without actual legal paper works, now the buyer (Barry) want to challenge the validity of contract on the groups of statement as made in Seller of business.
Statement of Seller (Angelo):Highly profitable venture in bustling suburban shopping centre with turnover of $20,000 per month. No competitors. $250,000 plus stock-in-trade. Ring Angelo on 0434 123 456.
Some important conversation between the parties: 
? Barry telephoned Angelo and asked about the store. He asked for the operating expense of the business,where in return Angelo told him that they were $8,000 per month. 
? Barry liked what he had heard, so he decided to check out how busy the shopping centre was. On the weekend, when he wasn’t working, he went to the shopping centre a few times and noticed that it was open all day Saturday and Sunday and was busy most of that time.
? Business was sold at price of $ 200000
? The term of contract consisting of following terms: sales including both delivery van and loader. 

Rules

Essential element for valid contract:

All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void.
Essential elements of a valid contract are as follows:
(1) There must be an agreement. This involves two parties, one party making the offer and the other party accepting it.
(2) The parties must intend to create legal relationship.
(3) The parties must be capable of entering into an agreement as regards age and understanding. Thus, person making contract should not be minor, idiot or lunatic.
(4) The agreement must be supported by consideration on both sides.
(5) The consent of the parties must be free and genuine.
(6) The object of the agreement must be lawful.
(7) The terms of the agreement must be certain and capable of performance.
(8) The agreement must not have been expressly declared as void.

Noncompliance of any of the above condition will create a question for the validity of contract.

The validity of contract can be challenge on any of following ground 
A) Capacity to the contract: the validity of the contract can be challenged on the bases of legal capacity of the parties to the contract. Any person below the age of majority, unsound mind, or lunatic is not legally capable to contract. 
B) Undue influence, misrepresentation, and presser: any contract created by or through, Coercion, threats, false statements, or improper persuasion by one party to a contract can void the contract. The misrepresentation or false statement shall be the reason to challenge the validity of contract.

Application

The advertisement for the sale of business by Angelo is an offer for the contract, and consequence calling on phone and negotiating the price of the contract show the intention to acceptance of offer (like offer and Acceptance = agreement), further the execution of written contract with the term of selling of all stock, along with two assets show the material things for the validity of contract.The payment of $200000 in exchange of accruing of ownership show the free consideration. So apparently all essential element for the valid contract was duly satisfied. 

However, after the six month, of transferring the ownership to Barry, the representative from financial department, forfeiter the van, on the grown of the van was on lease with the previous Owner (Angelo). As the second Owner had not paid the lease rent, he was under the defaulter list and the van was forfeited. The actual operating expense for the shop was below the $ 8000 but If Barry required to make a payment for lease van than actual cost of operating of shop will be $ 8500. Which is aging the information originally provided by Angelo. 

Conclusion

At this junction, after analysis the legal aspects and the facts presented into the given cases, we are concludes that Barry can challenge the validity of the contracts on the ground of misleading or incorrect information.,Initially while execution of contact it was not declared by the Angelo, that the delivery van was on the lease, secondly the information so provided for operationof shop was executing the cost of lease rent of van, as of accumulated cost of operation and lease rent will be $ 8500. So these groups can help the Barry to challenges the validity of the contract. Further, the validity of contract cannot be challenge on the ground of non-registration or non-taking of helps from the legal expert, the primary condition for the valid contract state that contract can be oral or written. In nutshell, the strong ground for challenging of validity of contract should be the non-providing the information about the lease and ground of missing leading information for the turnover of business. 
Question -3

Issue

Keeping in mind the facts of the previous question, this part of the project discuss about the next possible option available with the Barry, that mean, Barry failed to prove that contract was invalid, now what groups Barry can take in order to invalid a contract based on ground of breach of contract.

Rules

Breach of contract:

The contract between the two or more parties are created, either through the oral or written execution of agreement.Furthermore, the contract between the parties are deemed to be valid, ones it satisfy the all essential element for the valid contract and both the parties discharge their obligation. The contract bind parties to discharge their obligation, for underlying to objective to contract. If,In any case either of parties are unable to discharge their obligation or violates any term or condition to the contract or unable to perform the underlying objectives, in any way than such contract is deed to be breach terms of agreement and consequently breach of contract. 
If either of party found to be guilty for the breach of contract, than the Act and governing guidelines requires a performance, either in term of special performance or to compensate toplaintiff. In monitory or non-monetary terms.

Breach of contract means breaking or non-fulfilment of obligation under a contract.

Breach of contract may be:
? Actual breach of contract: Actual breach of contract occurs, when at the time when the performance is due, one party fails or refuses to perform his obligation under the contract. Example: A agrees to supply 10 bags of rice on 1st April. He does not supply the rice bags on that day. This is actual breach of contract. Party not in breach i.e. B can treat the contract as so longer binding on him and sue for breach of contract.
? Anticipatory breach of contract: When a party to executory contract declares his intention of not performing the contract, it is known as anticipatory breach of contract.
Anticipatory breach may take place in any of the following ways:
(a) Express repudiation: When one of the party expressly declares that he is not going to perform his part.
(b) Implied repudiation: Party does some act which is against the performance of his promise.

In addition to above following ground for termination of contract 
? Termination of contract by breach of condition or intermediate terms
? Termination under the repudiation,
? Termination due to delay

Application

While observing the requirement for the breach of contract, and circumstance under which any contract can be terminated, the contract which was under the process or which are in continues process of execution or performance, can only be terminated and will amount to breach of contract.

Here in given case, Barry and Angelo was under the contract of sale the business of Angelo, to Barry. Barry Approved Angelo, with intention to purchase the business of Angelo. Consequently the negotiation was undergoes between the Angelo and Barry to sales the business, the deal was final with the specified amount of consideration and with the term to sale the business along with the two fixed assets A) delivery van and Loader.
Deal was final and consideration was paid, ones the consideration is paid and the assets and ownership of business is transfer from the seller to buyers. The contract is comes to end. That means the possibility to invalids the contract is come to end, and it is possible only before execution of contract or for continues contract. 

Conclusion:

At this junction, it can be concluded that the possibility to challenge the validity of contract on ground of breach of contract is not more available here in case. Both the parties had discharge their obligations hence the contract was come to an end. So after the discharging the obligations by each of the parties to contract, the doors for invalids or to challenge the contract on ground of breach of term or contract is not available. this way or mode for invalidation of contract is available only before or during the time of execution of contract and not after the execution of contract except in some exceptional cases like continues contract, contract for fixed term, contract for occurrence or non-occurrence of specified future, controllable or uncontrollable events.
So, after discussing the facts of the case and compering the same with the legal and statutory aspects, we can state that for the Barry, that it is advise to him to knock the doors for the other legal groups to challenge the validity of contract or to overcome from the given situation, as we can see from the above discussion the ground for challenging the validity of contract based on the requirement of breach of contract is not open for Barry.

Part C

Explanation in laymen term

Mr. Barry, Yes, Defiantly, there is something, which we can see that there is a violation of rule and governing requirements of applicable Act.
things was done with you is again the requirement of applicable rules and legal system, and we have a ground to challenge the validity of the such incidence, but for that we need a strong bases for challenging the all statements made by Angelo, first of all we can present the written contract executed between you and Angelo, which contains the transfer of two assets, this fact helps use In arguing before the Court, and building a positive images that Angelo had transferred the delivery van, even though it was not owing by his. This argument can be supported with statement of financial agency who had finance such delivery van. 

Secondly the poster of advertisement, like highly profitable venture in bustling suburban shopping centre with turnover of $20,000 per month. No competitors. $250,000 plus

stock-in-trade.

this misleading statement of having of a business of $ 20000 per month with no competitors can also be used as part of misleading information, as in reality there was a grocery store in the shopping village that sold a wide range of fruit and vegetables.

Secondly, the we have to prove before the court about the operating expenses as informed by Angelo and Actual operating expenses of shop.

References

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Lib.oup.com.au. (2018). [] Available at: http://lib.oup.com.au/he/samples/latimer_ABL_sample.pdf [Accessed 14 Apr. 2018].
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Australiancontractlaw.com. (2016). Australian Contract Law | Julie Clarke. [] Available at: http://www.australiancontractlaw.com/ [Accessed 14 Apr. 2018].

Johnson v Buttress High Court of Australia (1936) 56 CLR 113

Hart, Austin, and the Concept of Legal Sanctions. (1975). Yale Law School Journal. [] Available at: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2086&context=fss_papers [Accessed 14 Apr. 2018].

Hart's Concept of a Legal System. (2018). William & Mary Law Review, [] 18(2). Available at: http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=2436&context=wmlr [Accessed 14 Apr. 2018].