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HI6027 Care to Customer of Market: Business and Corporate Law Assignment Tutorial Question 2 Answer

Assessment Task  Tutorial Questions

Unit Code: HI6027

Unit Name: Business and Corporate Law Assignment: Tutorial Questions 2

Weighting: 25%

Total Assignment Marks: 50 marks

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit

Unit Learning Outcomes Assessed:

1. Critically examine the main features of the Australian legal system;
2. Critically examine the foundations of Australian company law;
3. Critically discuss and apply contract and tort law in business circumstances;
4. Critically analyse the concept of corporate internal rules and management;
5. Critically discuss and apply the legal framework that regulates a company’s dealings with
6. Analyse the interaction between members’ rights, directors’ duties and corporate governance;
7. Analyse the procedures regarding external administration and winding up.

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 6 to 10 inclusive and submit these answers in a single document.

The questions to be answered are:

Week 6

Barbara was a regular shopper at Egeeay Supermarket, which was part of a large nationwide supermarket chain. She was there at least once a week and sometimes more often if the specials were really good.

When Barbara was there this week, she slipped on some grapes in the pet-food section in aisle 3, slipping and falling, and breaking her ankle. The store manager was not sure how the grapes got there or how long they had been there, but store policy was to do checks every 15 minutes of the floor in the fruit section. The store manager indicated that there were a number of spillages every week in the green grocery section of the store.

The store owner wishes to know:

  1. Whether Egeeay Supermarket owes a duty of care to Barbara? (3.5 marks, maximum 200 words)
  2. If they do, has it breached that duty of care? (3.5 marks, maximum 200 words)
  3. Whether your answer would be different if Barbara had slipped on some grapes in the fruit section of the store. (3 marks, maximum 150 words)

Week 7

Brown purchased a pair of woolen underpants from Underwear Galore in Adelaide. As a result of wearing the underpants without first washing them, he contracted dermatitis as the underpants contained bisulphite of soda, which it was found had been left in the underpants during the manufacturing process. The underpants had been packaged in a clear cellophane wrap, but the bisulphite of soda couldn’t be seen on a reasonable inspection by either the retailer or the buyer.

Has Brown any remedy or remedies available to him against the retailer, Underwear Galore, under the Australian Consumer Law? Explain what Brown has to establish in order to succeed in an action and whether, in your opinion, he would be successful. (10 marks, maximum 500 words)

Week 8

What are the advantages and disadvantages of becoming a franchisee? Should a person considering going into business the first time consider a franchise? Discuss. (10 marks, maximum 300 words)

Week 9

What is the significance of Salomon v A Salomon & Co Ltd [1897] AC 22? What is the ‘corporate veil’ and when is it permitted to be lifted under the Corporations Act? (10 marks, maximum 250 words)\

Week 10

Tristan is considering buying shares in a company. Tristan asks you to explain to him what is meant by the terms ‘member’ and ‘shareholder’, and the different ways in which a person may become a member. He also asks you to explain who may be eligible to become a member, and how many members a company is permitted to have. Finally, Tristan asks: how does a person cease to be a member of a company? (10 marks, maximum 300 words)


\Week 6


Issue: The issue in the given case study is whether Egeeay Supermarket is under obligation to provide duty of care to Barbara, customer of the market. 

Rule: the workers or the managers have a duty towards the clients and customers to keep them safe and sound from the harms occur whilst using the services. This specific responsibility of the manager and workers is referred as duty of care. The harms include both the physical and emotional harms. When the worker fails to oblige the duty of care, he naturally bounds to pay compensation to the clients. It is the manager’s duty and responsibility to foresee the harms and protect the clients. According to the civil liability act, 1935, there are certain exceptions that include the people who do not expect any payment while acting in an emergency situation. 

Application: Barbara was a permanent visitor of the Egeeay Supermarket who used to go for shopping almost every week. While shopping she slipped on the floor due the spillage of the grapes. Barbara slipped in the pet food section of the aisle 3 This is a case of negligence of the staff of the store and it caused injury to the customer. In this case, the store manager was responsible to provide safety to the customers and he also took possible steps such as setting up store policies. However, Barbara, instead of these string cleaning policies fall and broke her ankle. Therefore, she deserves a good compensation for the harm. 

Conclusion: the incidence occurred in the pet food section and the store manager was taking strict care of the food section. Compilation of the legal acts and the assessing the situation, it is concluded that the manager of the store is not bound to pay to Barbara as compensation. He took great care and followed his responsibilities therefore, he is not obliged to pay. 


Issue: the issue is whether the duty of care was breached?

Rule: the manager of the Egeeay Supermarket formulated policy to minimize the cases of slippage that occurred due to  the spillage. He checked the food section every 15 minutes to make sure that there were no things that can harm the customer. The negligence or breach of the duty occurs if the set standards of care are not met. The manager was obliged for duty of care and he fulfilled his responsibility sincerely. Barbara, who was the permanent customer of the store slipped in the different section and she broke her ankle even after taking proper precautions. The policy was to protect the customers and she still fall due to spillage. 

Application: the answer to the issue is no, Barbara cannot ask for the compensation for the damage occurred while shopping. There are certain care of standard that apply between two people and they change according to the situation. When there is a remarkable difference between the care of standard and care of duty, then it is a case of negligence and the client or customer can legally ask for claim for the damages occurred. 

Conclusion: Barbra fall in the different section whose responsibility was not on the manager. The manager however, checked the food store every 15 minutes according to the formed policies. Therefore, he is under no obligation to pay to Barbara as she slipped in the different section.  


Issue: would it be breach of duty of care if Barbara slipped in the fruit section of the store?

Rule: the duty of care is a contract between two people where one is the provider and another is the receiver of the duty. It is breached if there is negligence or ignorance of the set standards. The manager of the store was under the obligation to protect the customers. if Barbra falls in the fruit section then it will be considered negligence of the manager. The manager therefore, will be responsible to pay compensation to Barbara. 

Application: if Barbara falls in the fruit section then it is due to the negligence of the manager because he is responsible to make sure there were no spillages. Therefore, the manager has breached the duty of care by not fulfilling the set standards of care of duty. 

Conclusion: it is concluded that Barbara fell due to negligence of the manager therefore, it is a breach of duty of care and he is responsible to pay compensation to her. 

Week 7


Has Brown any remedy or remedies available to him against the retailer, Underwear Galore, under the Australian Consumer Law?


The ACL that is Australian consumer Law was established for protecting the consumers in case if they are delivered low quality products. The customer will get remedy for the protect in the form of replacement, repair or refund. The VIB of ACL governs for what kind of remedy will be provided to the consumer in the respective case. The part VIB is further divided into three parts for different damages and respective remedies. The first part of the VIB section is for the extreme severe cases. The customers will not receive any allowance if the damage is not as per the guidelines. The second part of the section includes the cases that are 15-33% severe and the allowance is only payable for such cases. The third part includes the cases whose severity is higher than 33% but they are not extreme severe. The damage receives maximum amount of the damage. Exemplary and aggravated damages include personal injury or death respectively and the court award for these damages also. 


In this case, Brown bought woolen underpants from the retail store named as Underwear Galore situated in Adelaide. While buying the underpants, the retailer and he himself could not see the bisulfite soda in the packaging even through the clear tape. The underpants he bought caused him dermatitis due to the presence of bisulfite soda as he wore them without washing. However, it is negligence of the manufacturing and packaging unit of the store that they did not packed the product carefully. Their negligence has resulted in a personal damage to Brown. 


Therefore, Brown should surely file a suit against the retailer to get remedy for the personal damage caused by the use of the product. The remedy that he will receive depends on the severity guidelines of the consumer law. There are high chances that he will receive compensation for the damage because the injury occurred due to the ignorance of the manufacturing and packaging unit of the store.

Week 8

Franchise is an easy business model where the franchisor provides legal authority to the franchisee to expand the business and both, the franchisee and franchisor share the profit. There are certain advantages as well as disadvantages of becoming a franchisee. Advantages includes:

  • Big business networks provide beneficial support to the independency of the small business owners.
  • Rate of success are higher in becoming a franchisee rather than starting up a new business because the losses are shared. 
  • Business experience is not required to become a franchisee and the franchisee has to deliver the products and services of the franchisor. 

The disadvantages of it are:

  • It is an expensive process as the franchisee has to pay a yearly price to own the franchise to keep the ownership of the brand. 
  • There is no room for creativity because the business guideline of the brand are followed to do business and own ideas cannot be adopted.  
  • The profits made by the franchisee has to be shared equally with the franchisor which leaves a very less amount benefits for the franchisee. 

The person can choose to go into the franchise business because the losses are shared and the franchisee does not have to worry of the losses. Moreover, the franchisee gains profit under the brand name provided by the franchisor and the risk ratio is also optimized. 

Week 9

Salomon v A Salomon & Co Ltd [1897] AC 22 was the case of corporations law where separate legal personalities were developed. Salomon owned a shoe company and later he indulged his family in the business by sharing the shares among them and became a limited company. Mr. Salomon received an amount to transfer the business on the security of the debentures based on the floating charges. The boot company of Salomon later could not sustain itself and failed and the company came under liquidation. The company was sued by the one company who provided money. According to the court of appeal, the incorporation of the Salomon company was against the corporations law and the company has to pay the debts. The unsecured creditors of the company also claimed the rights prior to Salomon (Salomon v Salomon). In this case, the veil was lifted as the personality of the shareholder separated from the corporate and the shareholders and the directors, both from the Salomon family were brought in light.  The lifting of veil is generally done in the cases where the company play frauds and operate contrary to the corporation laws. 

Week 10

A member of the company is someone whose name is enrolled in the register of the company. The members of the company has limited liabilities as per the shares they own. Moreover, a member is someone who can participate in the management of the company. A shareholder on the other hand is the person whose name is not enrolled in the member’s register of the company and he owns share of public or private companies. The shareholders have the rights to sell their shares and to attend he can participate in the management of the company.  

Triston desires to become a member of the company therefore, he can follow the given ways to become a member of the company according to the section 231 of corporation act, 2001:

  • A person can become member of the company by subscribing and signing the memorandum. 
  • If the person receives shares through and transmission or transformation and they are recorded then that person becomes the member of the company. 
  • The person should also reach the legal age to be called as the member of the company that is 18 according to the corporations act, 2001 (Corporation law). 

The membership of the person can be simply ceased by removing the name of that person from the list of members listed in the member’s register. The shares of the person are transferred to the other people who are member or who are willing to become member of the company. The number of minimum members that a proprietary and public company should have is 1 and 2 respectively (Members and shareholders). 

Following these ways, Triston can also become the member of the company by getting his name registered in the member’s register and by following the legal formalities like age. He can cease the membership by simply removing the name from the register and transferring the shares to other people. 

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