Contract Law and Corporation Law - Math Problem Example

Australian Law Contract Law and Corporation Law Word Count 2326 Question 1 Contract Law The first question deals with discharge of contract those results in Contract Termination. Contract Termination: The termination of contract has to follow the below points: 1. When either of the parties breach the contract or by the clauses in the agreement, Or 2. Depending on the performance of the party that offer products or services and by frustration of the party that receive the products or services. (Gillhams , 2008)1 Context of the Case: In the present case of CCL and BMCL any one of the above conditionalities are not satisfied. The CCL is withdrawing itself from non-severable contract with BMCL. This does not satisfy any of the terms prescribed for discharge or termination of contract in Contract Law. The readiness of the company is offer and the necessity of CCL can be termed as acceptance. As per the acceptance, the CCL has promised the tractor owners to take the tractors on a 3-month lease. (Media Wiki, 2008) 2 The present context comes under the frustration of the party accepting services. In this context, the party that wants to terminate the contract should prove that the provisions available to CCL are not available when they want to terminate the contract.( Michael Coyle, 2005)3 They can do this after reasonable notice where there is no express provision in the contract for termination.( Gillhams, 2008) 4 Presentation of the Case by Both the Parties: By CCL: In case of considering the utilitarian value and the benefits of the parties, the context of the contract between CCL and the BMCL seen from the benefits accrued by the contract to both the parties. As benefit for CCL in contract is clearing trees using tractors and for the owners is the rent acquired from tractors. As CCL has contemplated to stop the work, this damage the benefits of CCL in the contract and the reason for that is the government’s decision of imposing water restrictions. It is clear that CCL is ignorant of the future decision of the Government at the time of signing the contract. Thus, CCL as a party loosing benefits from the contract and have right under common and English Law to terminate the contract by giving prior notice to the other party. In the same case if the tractor owners are not returning the paid amount of $8000 and hiring the tractors for another party at the same time, the CCL can go to the court and can get compensation from the extra benefits of the tractor owners due to the loss of benefits of CCL.( P. S. Atiyah, 2007) 5 The CCL cannot rely even up to some extent on the aspect of delivery of deeds in property law act 1974. According to that aspect the execution of an agreement or an instrument in the form of a deed or in the form provided under section 45 or 46, shall not itself import delivery. The fact of execution cannot presume the delivery. According to this concept, the CCL presumed that by returning the tractors it could get back the paid money back. There is not chance for even presuming delivery and this negates the opportunity of even getting the loss of benefits. However, CCL can argue that the loss of benefits will not come under delivery and the negation of presumption will not work. Nevertheless, this does not provide a complete protection or guarantee to get a legal chance to have the money paid back. (Queensland Government, 1974) 6 This comes under the arguments in Codelfa construction v State Rail case in 1982. The High court of Australia delivered judgment in favour of the contactor and in this case, CCL can use this argument in its favour. (Graw, S, (2005) 7 BY BMCL: When coming to the arguments of BMCL they argue that CCL has signed a contract in advance for 3 months and there is no need for them to return the paid amount as there is no breach of contract from their part. This argument is not sufficient to counter the frustration, absence of express provision in the arguments of CCL. BMCL holds to the argument that they can repay the money paid in case if there is any clause in the agreement regarding termination, then there is a chance to claim the money, if not BMCL’s hold prevails over the agreement.( aef-auto-rentals.com, 2007) 8 This argument cannot be termed as sufficient to overcome the arguments of CCL. Second Part of Question 1: Costs f Damage and Repairs: In the context of cost of repairs for damages in the lease period, BMCL claims that the CCL has agreed to bear all the costs of damages and repairs by signing the contract. The agreement has the clause of that point. However, if CCL can rely on insurance paid for the tractors by BMCL there is a chance to show that the clause is void. The insurance provides protection from unforeseen damages that occur to the property unintentionally. There is every need for the BMCL to insure the property as they are giving an offer to the CCL by hiring the tractors. If the BMCL has insured the tractors and are not paying the cost of damages for CCL, as an organisation who hired the tractors CCL has a legal opportunity to go to the court for compensation. If there is no insurance for the tractors, they can claim that without insuring the tractors the BMCL has not ensured for the safety and quality of the services for CCL as per the offer in the contract law. The problem with this clause is that the most of the companies, which insure vehicles for rent, do not cover tyres. In this case, the CCL has replaced the tyre and if the BMCL has insured with the company that does not covers tyre for insurance in case of damage, the CCL has no chance to get the compensation for the amount they spent for the repair of the tyres of the tractor during the period of contract. However, there is a chance for CCL if the BMCL did not insure for the tractors. If BMCL collects money from the insurance company and not pays for CCL by mentioning the clause of the costs, CCL can claim money from them legally by benefitting themselves at the loss of clients. Question 2 Corporations Law Creation of Company that involve a syndicate: The present context of the company that involves a syndicate comes under the property syndicate. This does not find a fixed meaning, as historically they are small, private, and non-corporate entities that involve joint ventures. The broad definition of property syndicate includes larger investors funding professionally to manage non-corporate joint venture or unit trust like the one mentioned in this context. The syndicate can pool the money to acquire real property. The syndicate will act as an unlisted trust regarding the property they are contemplating to purchase. The people investing in the syndicate may or may not take part in the daily activities of the trust. The costs and benefits of the activities shared are according to the investment and participation. As the syndicate is trying to make the real property acquired into an amusement park, there is no PDS and if all the conditions are satisfied, there is no need of registration with ASIC. (Abbott Tout, 2005) 9 Context of the present Case: The voluntary liquidation of X in the middle of the time to the registration puts the other two partners in a critical position. They have a chance to sue X as he agreed in written form with S to buy the land along with Y and Z. Whether the syndicate registered or not is the issue between X Y and Z and there is no responsibility for S regarding the context of XYZ. He can demand legally X.Y and Z to execute the sale deed in time. As the three people syndicate were split and Y, Z has made another firm, they can execute the sale deed with S as per the agreement they have done with him including X. The real problem lies in the fact that they are not willing to purchase the land not for the fact that X is not in the syndicate but for the reason that the land value has decreased. In this case, the duty of execution lies on all the syndicate people who entered agreement with S. If X wants to come out of the syndicate and Y, Z want to settle the scores with him, they can buy land from S and can relieve X from his responsibility by paying him his share. (Lawlex, 2005) 10 Arguments of S: The real problem in this context is with S who is not able to make them execute the sale deed within the prescribed time. This entails S to take legal action against X, Y, Z who entered into agreement with him. As per 13(a), 13(c), 14, 15(d) of the exchange act the clauses involved in the prospectus are deemed to be registered. This makes the agreement of X, Y, Z with S deemed to be registered and before the company, splits S should make them to register the property. As he did not do it and now X was separated from Y,Z the existence of the company ‘play time company limited’ do not exist and he lost the chance of forcing them to buy the land according to S131(1) and S132(2) of common law. (Edgar online, 2004) 11 S can claim damages from X, Y and Z as per s 82 as they are involved in contravention. Section 75b of Australian law reform defines the person in a contravention as who aided, abetted, counselled, or procured the contravention or who has been in any way concerned with the contravention. According to this clause, S can claim damages from X, Y, Z for contravention of the agreement between them. In turn as X is not complying with the terms of agreement with S, the remaining two Y, Z can sue X for the contravention. Thus, a large part of contravention falls on X, as he is responsible for two contraventions; one, with S and two, with Y, Z. Arguments of Y, Z and X: Arguments of Y, Z should be about the fact that any agreement cannot be ratified unless the company is incorporated at the time of agreement. These depend on S131 (1) and S131 (2) of common law declaring that the company that is not identifiable after the time exceeds for execution of contract. There also a provision that the contract cannot is not entitled to ratify if the parties entered a deed on the name of a company before its incorporation. (Lipton, P and Herzbeg, A. (2006) 12 As the commission agreed to provide for individuals to be liable to damages for contraventions, there is every chance for S to sue X, Y, Z. If Y, Z did not register the company on the name ‘fun time company limited’, there is a chance for them to sue X for contravention. Now they lost that opportunity as by launching a new company with a new name they have relieved X of his liability of contravention. Letting X go out of the syndicate that has been responsible for the agreement to buy land, Y and Z made a grave mistake by making themselves responsible for the contravention or breach of contract. The important legal issue to be mentioned here, S can sue X, Y and Z. However, Y, Z cannot sue X for contravention as they have relieved him of the liability by registering the new company for the syndicate intending to purchase of land. As they have done this intentionally, they cannot claim relief from X or can deny the demand of S. The chances of suing Y, Z by S are more as the land value has been decreased due to the rubbish dump on adjacent side. As there is no chance to sell the land for another party, S will try to sue X, Y, Z. (Australian Law Reform Commission, 2007) 13 Conclusion: In this context the arguments of Y, Z prevail upon S, as he cannot ask for ratification of the contract by a company with which he entered into agreement before its incorporation. Though there is aspect of frustration in promoters’ arguments, the case will be on the side of X, Y, Z if they take recourse with S131 (1) and S131 (2). References 1. Gillhams , 2008, Contract termination Solicitors and Lawyers, Gillhams Solicitors, Volume no. 4, Retrieved on 7th March from http://www.gillhams.com/dictionary/439.cfm 2. Media Wiki, 2008, Australian Contact Law, Wikipedia, Volume information not available, Retrieved on 3rd march from http://en.wikipedia.org/wiki/Australian_contract_law 3. Michael Coyle, 2005, Frustration of a Contract, Lawdit.co.uk, Volume information not available, Retrieved on 7th March from http://www.lawdit.co.uk/reading_room/room/view_article.asp?name=../articles/Frustration%20of%20a%20Contract.htm 4. Gillhams, 2008, Commercial Law, Gillhams Solicitors, Volume 4, Retrieved on 7th March from http://www.gillhams.com/articles/142.cfm 5. P. S. Atiyah, 2007, Morals, Morals and Law, Oxford University Press, Volume 2, Retrieved on 3rd March 2008 from http://books.google.com/books?id=1hgBt5vfUPkC&pg=PT1&dq=An+Introduction+to+the+Law+of+Contract,+5th+edition,&sig=ay0xjIfmG5FReSjkJDwRqoiiasM#PPA3,M1 6. Queensland Government, 1974, Property law Act 1974, Queensland government, Volume information not available, Retrieved on 3rd March 2008 from http://www.austlii.edu.au/au/legis/qld/consol_act/pla1974179/s47.html 7. Graw, S, (2005) An Introduction to the Law of Contract, 5th edition, Law Book Cos, p.397. 8. aef-auto-rentals.com, 2007, WHERE INTERNET CAR RENTAL MAKES SENSE !, aef-auto-rentals.com, Volume information not available, Retrieved on 3rd March 2008 from http://www.aef-auto-rentals.com/terms_car_rental.html 9. Abbott Tout, 2005, THE REGULATION OF PROPERTY SYNDICATES UNDER THE CORPORATIONS ACT, abbotttout.com.au, Volume information not available, retrieved on 3rd March 2008 from http://www.abbotttout.com.au/files/Property_syndicate_seminar_paper1.pdf 10. Lawlex, 2005, Hong Kong review of codes on takeovers and mergers and share repurchases, Lawlex, Volume information not available, Retrieved on 3rd March from http://cclsr.law.unimelb.edu.au/bulletins/LAWLEX%20Corporate%20Law%20Bulletin%20No%2096%20August%202005.htm 11. Edgar online, 2004, Global MBS management, Edgar Online, Volume information not available, Retrieved on 3d march 2008 from http://sec.edgar-online.com/2004/06/16/0000905148-04-002809/Section17.asp 12. Lipton, P and Herzbeg, A. (2006) Understanding Company Law, 13th edition, Sydney: Law Book Company 13. Australian Law Reform Commission, 2007, Compensating Persons who suffer loss or damage, The Australian Law Reform Commission, Volume information not available, Retrieved on 3rd March 2008 from http://www.austlii.edu.au/au/other/alrc/publications/reports/68/ALRC68Ch7.html#ALRC68Ch7Damagesagainst Read More