HI6027 Business And Corporate Law Tutorial Questions Assessment Answer
Law as well as justice are known to be different terms as per statute; however, they are effectively linked to one another. These two terms still have distinct meanings. In this relation, 3 of the main distinctions which tend to depict how the two terms are different are as follows:-
Justice is not a universally popular concept but has same or similar meaning within each and every nation. On the other hand, laws are enforced by governmental bodies as well as judiciary system. Further, there is none of the agencies which are accountable for the formulation of justice.
Laws are created to regulate the behaviour demonstrated by the individuals who are a part of the population. Distinct from the law comprising of the regulations as well as rules, justice is ascertained to be the concept which depicts values such as morals, ethics, fairness, and equality. It is well known that the laws are required to be based upon the principle of justice. Every country tends to possess its own set of laws which might be different from each other. The acceptance of laws may be different but it should ensure the provision of justice to the parties involved.
The violation of laws leads to the occurrence of a punishable offence. Yet it is the stance that justice needs to be delivered by virtue of law but its violation does not constitute to an offence.
The main issue which is pointed out within the given case is if the given contract between Pedro and Andres is valid in relation to which, breach has taken place.
In accordance with The Contract Act, an agreement is said to be valid in case it consists of all of the important aspects of a valid contract. Such conditions are described as follows:-
Offer and Acceptance: A legal offer has to be given by one party to another party to form a contract against which the offeree gives acceptance.
Consideration: This is an essential element for the constitution of a valid contract. This is money or kind that can be exchanged between the parties to against for the execution of performance by one or more parties to the contract.
Intent of parties: Legal intention is important to be present within the contract to be bound by virtue of the contract. Now, social as well as domestic contract does not come under legal relationship but commercial contracts do.
Capacity: The parties that are required to be bound by the contract should have capacity to gain access to a contract. The contract which is entered with an unsound, incompetent, lunatic or minor person is known to be void ab initio.
Compliance with the legal conditions: The terms and conditions of the contract should adhere to the law to become a valid contract.
If the rules of elements of valid contract are applied to the given case, it can be said that a valid offer was given by Andrew to Pedro for selling boat at $8000. However, before the receipt of acceptance from Pedro, another buyer agreed to buy the boat against the consideration equivalent to $9000. Thus, a legal contract was not created between Pedro and Andrew.
As the formation of a contract did not take place between the parties, Andrew cannot be said to be having liability for breaching the contract as claimed by Pedro.
The case is concerned with the issue linked to Samuel’s right for setting apart the transfer of beach property made to his daughter.
Within The Contract Act, a special defense is given that empowers a person to carry out avoidance of the terms pertinent to a contract signed by them during specific situations. Such defence is called as non est factum implying that it is not his/her deed. This defence leads an individual to carry out avoidance of liability pertinent to a contract taking into account the stance that document which was signed was for other purpose. Within the case named Petelin v Cullen (1975) 132 CLR 355, the decision implied that a special defence is given to an individual who has any inability such as blindness, deafness, illiteracy, and so on. However, it is known that the burden of proof in this case still is on the claimant for guaranteeing that the documentation was different and the person was not able to understand its contents.
In the given case, Lee, Samuel’s daughter threatened him to transfer the beach property in her name. He fell for her move and signed the documentation. Yet, he later intends to avoid the transfer made by virtue of usage of non est factum. This provision will work in the favour of Samuel and by this; he can prove that he did not have knowledge of the purpose of the document while signing and thus the signature was done believing it to be having different information. Lee presented wrong facts in front of Samuel related to the document of transfer of the beach property.
In accordance with the special defence, Samuel is advised to carry out the avoidance of breach property transfer through the use of provision named non est factum.
a) The payroll evidence rule is liable for preserving integrity for written documents as well as assistance to secure genuineness of written examination. This rule is liable for laying its emergence to the laws related with Anglo-American in reference to contractual parties that identify documents which will be show in front of court with reference to the conflict. Those terms that will be written within the agreement and the one that must not be written have to be decided by having mutual consent that is being given via different parties involved within the issue. In case if parties opt to tend to prove any kind of clause or term which were agreed verbally among them, this lead to utilisation of parol evidence rule can be applied. With reference to this, parties need to prove validation in context of terms that have been agreed verbally among Court.
b) There are various exceptions in context of this rule they have been specified beneath:
- When dependent or collateral on other contracts.
- When new terms are comprised within the new terms that have not been added within the contract earlier.
- If agreement do not dispute with entities of reliable contract.
The parol evidence rule cannot be applied in situation where written agreement has been formulated and only those conditions will be acknowledged that have been written. Therefore, it can be mentioned that this rule can only be applied when case is partly written or oral contract has been occurred. In addition to this, there is collateral with valid consideration as well as situation precedent.
With reference to the case study, the issue is determination of whether the contract that is being held by Pedram can be carried out by doctrine of frustration.
Doctrine of frustration implies rule in which contract in which contract needs to be discharged only in case terms mentioned within contract cannot be carried out. With reference to doctrine an instance can be taken in which primary rationale behind entering within the contract owns relevantly frustrated unanticipated conditions, and then the process of termination of contract has to be done via a virtue for doctrine of frustration. In case if contract do not contain clause related with force majeure then it will be discharged via doctrine of frustration. This means relieving parties from fulfilment of obligations related with the contract. The contract is regarded as frustrated within the cases illustrated beneath:
- Occurrence of event that will make contract different with respect to terms mentioned in original contract that has been entered via parties.
- Occurring impossibilities of purpose
- Happening of unanticipated events that take place while contract is continued.
In Adelaide, the steel factory was run by Pedram for a lease of complete 10 years. The order was received by them to supply steel frames for one of the commercial shopping centre for which was liable for delivering their first instance within 90 days. But Government tends to acquire factory so that they can build up new tunnel system link. For this reason, Pedram have to leave the factory and was given time frame of 4 months but establishing new one will also be time consuming. This makes it difficult to deliver the order. The case illustrates doctrine of frustration as the unforeseen event has occurred due to inability of Pedram to conduct relevant actions as per the contract that has been occurred.
The contract can be terminated via Pedram through usage of doctrine of frustration. According to this, the unforeseen event has taken place in which old factory was acquired and thus new place has to be looked. Hence, doctrine of frustration will enable them to relieve them from all legal liabilities that are associated with breach of contract.
The statutory derivative actions that is accessible within Section 236 of The Corporations Act. It can be said to be the right to bring proceeding on behalf of the corporation.
To succeed under Section 236 of the act, the shareholder is required to satisfy the criteria given in Section 237 of The Corporations Act. With reference to this, certain aspects have been specified beneath:
- Shareholders needs to act n affirmative faith
- Firms cannot bring any kind of action
- Actions needs to be best within the interest of the firm
- The matters that have to be considered must be serious.
- Shareholder needs to rebut presumptions that are within Business Judgement Rule.
In addition to this, the action oppression is set out within the section 232 and also follows different steps that have been specified through utilisation of flowchart: