Facts And Issue On Business Assessment Answer
Key Topics
- Question 1
- Facts and Issue
- Rule of Law
- Analysis and Conclusion
- Question 2 Facts and Issue
- Rule of Law
- Analysis and Conclusion
- Question 3Facts and Issue
- Rule of Law
- Analysis and Conclusion
- Question 4Facts and Issue
- Rule of Law
Assignment
Questions
Fran runs a small business called Fran’s Fine Treats, supplying gourmet chocolates to foodstores and health spas. Recently her products have grown in popularity, and the business is growing significantly. Fran decides to hire an assistant to help her with deliveries. She approaches her brother Marco, who owns a van. Marco was planning to take on a well-paying job opportunity in a nearby town, but he agrees to stay local instead, so that he can help Fran grow her business. Marco is concerned about wear and tear on his van, and about insurance in case he is involved in a traffic accident while making deliveries. So he wants to make sure the arrangement with Fran is formalised. He gets the advice of a lawyer, who helps to draft an employment agreement setting out hours, rate of pay, reimbursement for fuel and maintenance costs, responsibility for vehicle insurance and various other details. After both Fran and Marco have inspected the document prepared by the lawyer, and discussed all its contents, they both sign it and have their signatures witnessed. Two days later, Fran regrets her decision and wants to hire her niece Jane instead.
Question1. Is Fran bound by the written agreement with Marco? (5 marks)
As Fran’s business is expanding, she needs more room for preparing and storing her chocolates. On her daily walks with her dog, she has noticed a small warehouse space near her house, which has a ‘closing down sale’ sign displayed at the front. She knocks and enters the premises, and speaks to Octavia who is packing boxes inside. Octavia is the owner of the space, but is planning to move interstate. He is looking for someone to rent the space after he is gone. “I’d like to get the matter sorted quickly – if I can find a tenant before I leave, then I won’t need to pay a real estate agent to find one for me. I’ve already got a draft lease agreement covering all the essentials.” Fran thinks the location will be perfect for her business, but she is concerned that the kitchen at the warehouse doesn’t have an extractor fan. She says this to Octavia and he says that he will organise and pay for installation of a fan, as long as she is serious about renting the property. Fran reassures him that she is, but that she wants time to look at the draft lease agreement properly before signing it and returning it to him. Octavia emails Fran with the agreement and says that he has booked someone to come and install a fan. He says in the email, ‘please let me know if you’re not going to go ahead, in which case I’ll cancel the fan installation.’ Fran responds saying ‘Everything’s fine. I’ll look at the lease tonight and bring it around to the warehouse tomorrow.’ That afternoon, an electrician comes and installs the fan into the kitchen at the warehouse. Later the same evening, Fran discusses her plans with some friends. They encourage her to consider opening her own shop, rather than only selling the chocolates to other businesses for retail. Fran now thinks that a warehouse setting will not be appropriate. She decides to look for a shop front in an area with good visibility and foot traffic. First thing the next morning, Fran contacts Octavia and announces that she will no longer be renting the warehouse space.
Question2. Does the doctrine of promissory estoppel apply to Fran and Octavia? (6 marks)
3 Fran finds a shop suitable for her business, and enters into a lease agreement without any troubles. She then advertises online for an assistant to help her in the shop. After interviewing several applicants, she decides on Dante. He is keen to learn and has some experience as an amateur chef. Fran hires Dante as an apprentice chocolatier. Their written agreement contains a restraint of trade clause. This clause forbids Dante from opening a competitor business in the same area or supplying to the same clients as Fran’s business, for one year after leaving the apprenticeship. Six months into the apprenticeship, Dante feels he has learned all that he can from Fran. He quits. Two weeks after Dante has gone, Fran finds out that he has approached several of her clients, and has begun providing two of them with similar gourmet chocolates at a lower price. Fran wants to enforce the restraint of trade clause, but Dante says that the employment contract isn’t binding on him.
Question3. Is Dante bound by the contract with Fran? (5 marks)
Rather than advertising online, Fran thinks that she is more likely to find someone trustworthy if she relies on existing networks to find someone who comes recommended. Fran sits at her desk to start preparing a notice to display in the front window. The sign offers a month’s supply of free chocolates to anyone who can recommend a suitable, trustworthy assistant or apprentice. One of her regular customers, Arjun, comes in to pick up his regular weekly order. “Where’s Dante these days?” Arjun says. “He quit,” responds Fran. “I need to find a new assistant or apprentice to replace him.” “I know someone perfect! My neighbour has some experience in food preparation and is looking to start an apprenticeship. She’s honest and a hard-worker. Here, I’ll write down her name and number for you.” As Arjun picks up a paper and pen from Fran’s desk, he sees the sign for the first time. “Oh, great!” he says. “I’ll take the month’s supply of free chocolates with me now, thanks!”
Question4. Is Arjun entitled to the month’s supply of free chocolates? (4 marks)
4 Guide to citation for the common law assignment Legal citation is different to other styles of citation, such as Harvard or other in-text citation. Legal citation involves providing the most relevant legal authority for any statement of legal rules or principles. Citations are provided in footnotes. (If you’re working in MS Word, simply go to the ‘References’ tab and click on ‘Insert Footnote’.) For the purposes of LST2BSL Introduction to Business Law and Ethics, we do not expect you to learn the Australian Legal Guide to Citation, which is the usual approach to legal citation in Australia. That Guide is incredibly complex. Instead, you can simply follow these instructions for citations in your common law assignment. As stated above in the Assignment Instructions, where you state a legal principle which comes from a case, you must provide a citation to the relevant case. You are not expected to read the cases themselves: as long as a case is summarised in the textbook, you can cite the case itself. An example of this would be if you said this in your assignment: If a letter of comfort includes statements which are not promissory, then it probably was not intended to be legally binding.
Question 1
Facts and Issue
F for supplying the business products was in need of a delivery assistant and approached her brother M. Both of them agreed upon an employment agreement. But, F do not want M anymore as an employee.Whether F is bound by the written agreement with M.
Rule of Law
A written agreement is valid if it supports the very intention of the parties.
Analysis and Conclusion
In the instant facts of the case, F and M, formalised the employment contract between them. But, it is not necessary that, a formal written agreement can always have the binding effect on the parties. High Court of Australia in case of Masters v Cameron , decided that, for the contract to have a binding effect, it is important that the terms so stated within it along with the conditions, must be expressed in such away that, it helps any reasonable person to determine, the very underlying intention of the parties. Furthermore, Court in Masters v Cameron, held that when the partied to the contract have reached the finality, and have also arranged the bargain, so that they can perform immediately, will be bound by the terms. Again, the court further held that, if the parties have completely agreed on all the stipulations so made in the contract and there is no intention so surfaced which can predict the possible departure but have not performed yet in furtherance to the conditions of the contract was held in a recent decisions in case of Stellard Pty Ltd v North Queensland Fuel Pty Ltd and also in Tabcorp Holdings Limited v The State of Victoria , then also they will be bound by the terms whether express or implied, in the contract, was also held in case of Brice v Chambers . So, coming back to the present facts of the case, and also by the application of the ratio in Masters v Cameron1, it can be deduced that, there is a binding contract between them, since, F and M have agreed to the terms and conditions of the employment they made amongst themselves, with the intention to have the legal obligation, and in furtherance to that, they are yet to perform. So, to answer the issue, yes F is bound by the written agreement with M, since there was a prominent intention which reflected form their actions.
Question 2
Facts and Issue
F on noticing a warehouse on closing down sale, approached O, who agreed that F can enjoy the property on lease. F, also consented, but wanted an extractor fan, which was also agreed upon by O. O sends the lease agreement to F through email and inquires bout her seriousness in taking in the property, she assured O. Based on that assurance O, fitted the installation. F refuses to renting the warehouse space.
Whether, doctrine of promissory estoppel will be applicable toF and O.
Rule of Law
Promissory estoppel is an equitable doctrine, based on which the parties cannot back on the promise if that is not supported by a valid consideration.
Analysis and Conclusion
From the present facts of the case, it transpires that, F agreed to take the property belonging to O, on a lease agreement, and in furtherance to that, O installed the fan which was consented by F. So, following the ratio as was laid in Central London Property Trust Ltd v High Trees Ltd , there was a legal obligation, which existed between F and O, and F actually tried to modify that, is in utter violence of the doctrine of promissory estoppel as was held in case of Hughes v Metropolitan Railway . Again, O, acted in furtherance to the promise so made by F and have installed the fan, so, at this instance, if F is allowed to end the contract and go back to her previous position in similar line as was held in Alan v El Nasr , would be inequitable towards O was held in D& C Builders v Rees . So, F, is estopped from going back he original position and denying the agreement between her and that of O.
Question 3
Facts and Issue
F employs D and, in the agreement, she puts a restraint clause. D leaves the job and started approaching clients of F and also started selling the same products like F, at a lower price. F want to enforce the clause.Whether, D was bound by the contract as agreed upon with F.
Rule of Law
The employers ability to keep a check and restrain the former employee dependent on the efficacy of the clause so administered under the restraint of trade.
Analysis and Conclusion
In the instant facts of the case, F incorporates a restraint of trade clause, which prohibits D in to doing the same competitive business as that of F, within certain areas and for certain period of time, after D leaves the company of F. Generally, the restraint of trade clause is prima facie void was held in case of Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Limited , but there are exceptions, which allows the employers to put forward a reasonable explanation, so that they can seek protection. So, to seek protection, F must prove beyond any reasonable doubt that, if the restriction were not imposed upon, then that would hamper the legitimate interests and hence the onusto demonstrate that solely rests on her was held in case of Herbert Morris Limited v Saxelby . So, to stay in perfect alignment with the decision as was held in case of Woolworths Limited v Mark Konrad Olson , F must prove that D is using the trade secrets of her in an unauthorised manner, as was held in Weldon & Co v Harbinson , and must also prove that, there is a potential danger of getting her secrets to be leaked was held in the case of Australian Billboard Connections Pty Ltd v Jansen , and hence she incorporated the restrains in the contract, must be in the same line as was held in case of NP Generations Pty Ltd v Feneley .
Question 4
Facts and Issue
F displayed a notice and offered chocolates if someone recommends a suitable worker to work in her shop. A was one of the customers, who without seeing the notice, and was about to give F, the details of his neighbour, and then at the same instant he saw the notice. A, asked F for the chocolates so offered.
Whether,Awas entitled to the supply of free chocolates.
Rule of Law
Past consideration is not valid under, if not supported by a promise.
Analysis and Conclusion
The present facts of the case are in similar line of the landmark case of R v Clarke , where the Court held that, a reward can only be claimed after the reliance is being placed on the offer so made, since to constitute a contract, there must be an intention to accept the offer. But, the English Court in case of Williams v Carwardine , held that, in order to avoid the unjust enrichment and also to stay with conscience, if an offer is not within the knowledge of the person accepting it, then that cannot constitute a valid offer. Again, it is well established that, to constitute a valid contract an acceptance must be communicated was held in Brogden v Metropolitan Railway Co , and the New York Court of Appels in case of Fitch v Snedeker , held that, if an acceptance is made while staying ignorant about the original offer, then that acceptance cannot be considered to be a valid one to be conferred upon and hence the reward cannot be claimed. So, coming back to the decision as was held in R v Clarke15, and applying that to the present facts of the case, A can only accept the offer, if he at all knew it, and so the acceptance must flow naturally and come as an answer to the offer so made by the offeror, so applying the ratio, of that case of R v Clarke15, A, cannot claim the reward for the chocolates so offered by F, since there was no binding contract between them, due to the fact that he already gave details of his neighbour to be a potential recruit in F’s shop, is an acceptance of an offer, without being actually aware of it. So, A cannot claim any reward.
