Business Law Questions - Assignment Example

Business law Name: Instructor: Task: Date: Business law QUESTION one (a) provide a short account of the commercial background of the case, and key aspects/clauses of the standardized contract in dispute between the parties. In 2004, Yarrabee Chicken Company was among other chicken growers in the Valley, referred to as Hunter, which signed several contracts with the Steggles Company. These contracts were characteristically similar, and permitted the Growers to raise chicken by use of the tunnel growing method. During the preliminary proceedings, Yarrabee conveyed a representative preceding that was against Steggles provided in section IV (a) of the FCA Act 1976 maintaining that Steggles had contravened its conventions with the Growers and indemnity for violation of the contracts. The case’s commercial background was on the construction of contract’s clause 7.4. This maintained that Steggles had to offer any additional Shed capacity arising resulting in the tenure of the contract to the Growers in favorite of third parties. The debate was whether the term “additional Shed capability” portrayed material sheds, hence, implying an enlargement in the size or figure of accessible sheds, or otherwise, the capability to raise extra numbers of chickens while utilizing the accessible sheds. The basis of the case of Growers is that clause 7.4(a) of the convention obliges Steggles to tender to them the competence to grow chickens for initial processing at the Beresfield plant, and secondly in favorite to the rest of chicken breeder. The Growers challenge was that Steggles had breached the above obligation both in 2009, as well as in 2010. Question one (b) regarding the pivotal clause 7.4, what case law principles governed its ‘proper construction’, in the view of the judges (Jacobson, Lander & Foster JJ) on appeal? (1) Issue - What case law principles governed the ‘proper construction? -views of the appeal judges (2) Rule The court established that, when article 7.4(a) stipulates of an additional shed capacity to be surrendered to the Growers it is with respect to the additional material shed capacity obtainable from the Growers due to the Steggles’ improved processing capacity at its plant. Consequently, by proposing that an additional shed capability be surrendered by Steggles to the Growers is with regard to Growers’ privileged right to receive chicken for processing at Beresfieldt is hardly in line with the terms or function of the contract. Additionally, it lacks back up by the relative deliberations referred employed by the primary judge. (3) Application It is critical pointing out that, the law provides for impartial agreement in a contract. Consequently, since in the above case instances of unfairness are inevitable, there is the need to redraft the construction. This would provide for a mutual contract in, which each party benefits equally and owes to the contract. (4) Conclusion The court allowed the appeal by emphasizing that, with respect to its opinion as to the appropriate construction of section 7.4(a) that, the Growers had hardly recognized the violation of agreement or loss. Consequently, it is evident that the court relied on Equity principles, such as not implement certain performance on individual services or the preservation of individual relationship. The other principle evident in the case is that of insufficient indeterminacy. Indeterminate liability reflects that, a dependent turns out to be accountable to a tentative collection of blameless parties that incurred losses, for instance, the head of a vessel haphazardly crashes with a city conduit and destroys it. The destruction could risk the inhabitants of the city incurring the monetary losses. Question 1 (c) What was the nature of the term which the primary judge, Jagot J. had implied into the contract, and on what grounds and case law did the judges on appeal decide that such implied term (of fact) was not required to give ‘business efficacy’ to the contract? The principal judge maintained that the indication to additional Shed capability in clause 7.4(a) of the agreement obliged Steggles to present to the growers, primarily and in favorite to whichever the third party, the ability to raise any bird for processing at the Beresfield plant in any of the sheds of the Growers on their ranches. In the subsequent ruling, she established that Steggles had contravened section 7.4(a) given that the evidence reveals that Steggles disbursed chicken to new growers Beresfield plant’s processing, despite that the Growers were capable of raising such chicken. Question 1 (d) was the appeal decision ‘fair and equitable’ to the chicken growers in light of the dynamic commercial relations existing between the parties? (1) Issue -was there a fair and equitable decision? -the dynamic relations between the parties (2). Rule A fair, as well as equitable decision entails a wide-ranging commitment to perform truthfully. This would encompass the right against the execution of legal tools for purposes other than their outlined ones, and any form of scheming by government systems to devastate investment. Nonetheless, it is clear that, acting unfaithfully is not a guarantee for a judgment that there is contravening of a fair, as well as equitable decision. Significantly, conformity to the law is an essential prerequisite of excellent decision-making. Decision makers should also express their capability to produce just and logical decisions in the conditions, that the authority they implement embrace suitable authorization and appropriate utilization, compliance with procedural fairness and provision of substantial evidence to clarify and substantiate their verdict, guaranteeing fairness, intelligibility, steadiness and answerability. (3). Application Steggles’ statements over the Growers’ response to damages are hardly persuasive. For instance, one should identify that as Steggles depended upon the pleading of the Growers at Para 20(r) section three of the extra-adjusted prompt track argument that, until late in 2009 the rest of the Growers absolutely channeled their supplies to Beresfield’s plant. Significantly, Steggles ought to realize that the pleading merely meant that the Growers raised all the chicken channeled at Beresfield since Steggles does not refer the same to be the case. Accordingly, with respect to Steggles, the above pleading could imply only every chicken the Growers raised was taken to Beresfield for processing. Secondly, the Growers recognized that chicken reared by other growers and processed at the Beresfield plant, the Growers had the capacity to rear an extra 3,635,983 of such chicken in 2009 and approximately 4,396,007 of such chicken in 2010. Thirdly, the Growers’ response to damages, when analyzed, does not culminate to a substantial claim. The response would bring to effect a distinct order for damages to be made for all Growers if suitable or essential. If the substantiation revealed that, any of the Growers was responsible extraordinary circumstance, consequently, distinct deliberation of that Grower’s circumstance might be essential. The verification, nonetheless, is extremely opposing. Additionally, every farm of the Growers was completely outfitted in the entire 2009, as well as 2010. Consequently, the loss calculation method, which the Growers have experienced by Steggles’ contravenes section 7.4(a) in 2009 and similarly in 2010 appropriately, implies the individual position of all the Growers and’ obligation of Steggles’ contract to operate in an inspiring manner that is impartial to each of the Growers and to handle them on physically comparable terms. Considerably, it is evident that, the claimed damages, determined in with respect to the approach described in the conclusion of the Growers’ case study above, will suitably indemnify the Growers for the losses which they incurred due to Steggles’ contravening of agreement in the above mentioned years. The parties ought to set up draft orders revealing the above reasons for the verdict and their accountability as to lose. (4). Conclusion It is worthwhile noting that, the judge’s decision complied with the existing regulation. Consequently, the issue of fairness and equitability can hold water with regard to legislation. However, it critical noting that, owing to the significant dynamic commercial relations between Yarrabee and Steggles, the decision reflected partial fairness and it lacked impartiality in equitability. Significantly, the judge’s decision was in favor of the Steggles since the judges had denied appropriate compensation for Yarrabee. Concisely, the appeal entailed substantial partiality hence, it lacked fairness. Additionally, due to the appeals, biasness on Steggles lacked equitability. Question 2. With reference to Australian common law and equity only (not the sale of goods or other legislation), advise Camira, having regard to privity of contract and Clause 7 as amended, as to what (if any) of its damages sustained totaling $40,000, it can sue Mackay to recover.  (1) Issue What kind of losses they are? Are they recoverable? (2) Rule The contract doctrine privities provides exclusively for the persons engaged, as a partaker to a contract is obliged to act responsibly in enforcing it. An individual, who is liable for gains, enjoys advantages from the contract. This implies that he is a recipient of the third party beneficiary. Consequently, he is hardly entitled to engage in any enforcement action if he fails to access the promised benefit. In addition, according to the consideration document, it is evident that the judgment and deliberation ought to shift from a promise, or as well as, in the case that only an individual who has offered a consideration is liable to put into effect a promise. (3) Application According to the above-discussed case, its significant postulating that, Camira can hardly sue Mackay because he had failed to offer some consideration for Mackay’s undertaking to indemnify Camira for the damages sustained amounting to $40,000. It is significant highlighting that one should concentrate on the possible remedies pursuable over a promisor who has contravened his commitments to a third party. In the above-mentioned case, who is liable to prosecute Mackay, and what are the possible remedies? Since Camira is a third party as well as not a mere privy to the agreement, Camira has no right of accomplishment over Mackay. However, CSC as the promisee beneath the convention and a party to the agreement can prosecute Mackay. Consequently, two possible remedies are inevitable, which are: loses at common law and explicit appearance in equity. (A) Damages at Common Law Due to common law’s remedy, damages for contravening the contract will often benefit a plaintiff; therefore, CSC will constantly succeed. Nevertheless, the significant concern is the determination of the damages likely to be recovered. Significantly, for proper to an understanding of the role of CSC in the current context is the fundamental principle for the evaluation of damages for contravening the contract. In addition, a critical exploration of on remedies reveals that, damages play a critical role in indemnifying the plaintiff for the loss incurred because of the violation. If one does not incur some loss, then either nominal or a token prize of damages is produced in special treatment for the plaintiff. However, if an individual incurs a real loss, an honor of considerable damages is produced in honor of the plaintiff. In the above case, it is possible that the determination of damages to be indemnified by CSC would be significantly ostensible since CSC incurs no loss because of the contravention by Mackay. Similarly, CSC’s responsibility is the equivalent even if Mackay pays or fails to pay the sum of the $40,000. In extraordinary circumstances, it may appear that CSC will incur a real loss, whereby considerable damages, which portrays an image of the significance of CSC’s damages – not Camira’s damages, will be encouraged. Significantly, since frequently the determination of damages indemnified will be ostensible, there is no sufficient reason for CSC to practice damages of the common law. The reality that CSC can hardly sue to recuperate as damages the determination of Camira’s loss from Mackay’s contract violation was freshly confirmed in Alfred McAlpine versus Panatown in 2001. The fifth lord was significantly skeptical, implying that it was a strange imperfection in the law that CSC ought to have no solution for damages of common law against Mackay. (b) Certain Performance in Equity In contrast with the damages of the common law, certain presentation will never constantly be approved to a claimant up on a proof of contract violations. A court can decline certain performance with respect to a variety of grounds. For instance, a typical example in the above context is that the solution will be declined if damages of common law would provide a sufficient remedy. (4) Conclusion In conclusion, $40,000 damage is recoverable if only the concerned party acts logically in alleviation of loss. Recoverability of the other damages relies on myriad forces. One can recover damages if: the peril of such losses has been availed to Mr Camira at the signing of the contract CSC Ltd responded instantly and with respect to coherent market price to alleviate its losses and the logical changeover could hardly prevent profit loss. The losses occurred during the interruption time of repairing the Mackay’s refinery. Question 3. Advise Dr Zola as to what (if any) liability for professional negligence she has to Rubicon Holdings Ltd at common law as amended by the Civil Liability Act 2003 (Qld). (1) Issue -What kind of relationship? -What rules? -What are Dr Zola’s liabilities to Rubin holdings Ltd? (2) Rule It is worthwhile noting that, any work done on a voluntarily basis has no purpose of the parties to form lawful contractual association since commercial agreements ought to reflect a business. The idea of tort is separate from convention. Consequently, with or without the presence of contractual relationships, the tort law provides that, a party which debilitates another one could be obliged liable to indemnify losses (Davenport and Parker 2012). Negligence in general. Negligence is one party’s failure in duty of care that caused injury or loss to another party. There are certain criterions that determine the compensability of losses caused by negligence. They include: Existences of a duty of care - Whether a person has a care duty or not exercised by the neighbour or proximity test. The proximity principle determines the relationship between professionals and clients as a circumstantial proximity (Jaensch v Coffey (1984) 155 CLR 549). The case, Mitor investment Pty Ltd v General Accident Fire & Life Assurance Corp (1984) WAR 365, also shows that the professional person, who acts on behalf of others, must exercise reasonable care and skill (Davenport and Parker 2012, 307). As well, the case, Chaudhry v Prabhakar (1988) 3 AII ER 718, shows that an attorney who authorised and acted on the basis of non-contractual relationship, for example, friendship, liable for duty of care (Collier and Lindsay 1992, 165). Breach of care standard - The Civil Liability Act 2003 (Qld) provides a care standard for professionals, which postulates: professionals should act in the same way that extensively acknowledged by a significant percentage of respected peer professionals in the field. Causation of the loss from the breach settled by ‘But for?’ test in Cork v Kirby McLean (1952) 2 All ER 402. The all-purpose principle of this rule is if every event were the same except for the negligence, would the innocent party suffer loss? If not, negligence caused the loss. (Davenport and Parker 2012). The clause 11 of the Civil Liability Act 2003 (Qld) has also determined that the breach has caused the damages if (a) breach of duty was an essential condition of the incidence of the harm; (b) it is suitable for the diversity of a person’s liability in violation to extend the caused effect. Remoteness. The clause 9 (1) of the Civil Liability Act 2003(Qld) has determined the general principle that a person breaches a duty if the risk was foreseeable; and in the same situation a sensible person would have acted to prevent it. Limitations. The Civil Liability Act 2003 (Qld) fixes myriad limitations or prohibitions from claiming damages. For example, if an innocent party has participated in a ‘recreational activity’ or they are criminals or intoxicated they lose the right to claim damages. However, a volunteer includes only individuals, under the act. Duty of care in wholesome economic losses: If the innocent party suffers only financial loss and does not suffer personal injury or damage there are some additional principles to identify whether there is a duty: Lack of indeterminacy. Indeterminate liability means a dependant has become liable to a uncertain group of innocent parties that suffered losses, for example the captain of a ship carelessly collides with a city bridge and damages it. The damage could lead to the residents of the city suffering the economic losses. Individual autonomy of the both parties Innocent party’s inability to protect Awareness of the risk The professional negligence. In case of professional negligence, the relationship between parties is based on reliance of client and proposition of responsibility. In Hawkins v Clayton (1988), CLR 539 the law imposes the professionals’ duty to act proactively (Davenport and Parker 2012). (3) Application All of the losses could be characterized as expectation losses. The breach has elements of both breach on performance and an anticipatory breach, because the performance was a continuous process that had many fixed performances, some of them were undergoing and some were due to. Because these losses were lost benefits, in the case of performance of contractual obligations by Dr. Zoka Zola, Rubicon Holdings Ltd would have prevented these extra expenses, and equally, would have economic benefits. Dr. Zoka Zola worked on Rubicon Holdings Ltd financial affair voluntarily; therefore there was no commercial contract. Therefore, there are no liabilities for contract violation. However, this cannot release Dr Zoka Zola of civil liabilities. The relationship between Dr Zoka Zola and Rubicon Holdings Ltd can be defined as a relationship between professional and client based on reliance and assumed responsibility.’ Dr Zoka Zola’s failure to renew the comprehensive insurance policy and default on investment loss are a result of the professional negligence. Insurance loss Prevalence of a care duty. Under the proximity principle, there is circumstance proximity, that is, the relationship between Dr Zoka Zola and Rubicon Holdings Ltd is a relationship between professional and client. Therefore, Dr Zoka Zola has a duty of care. Breach of care standard. Undoubtedly, any accountant would have renewed the insurance policy. Causation. There are two groups of innocent parties: Rubicon Holdings Ltd and its tenants. The amount of the insurance compensation is determined by the insurance agreement. Comprehensive insurances usually cover property damages and the lost profit of the insured person, the loss caused by Dr Zoka Zola’s negligence could be $ million. In a common case, parties are not liable for another party’s losses that caused by the force major. Remoteness. Loss of insurance benefit is a result of direct flown from the violation of duty and a sensible person would have seen it and would act to prevent it. The damage is not significantly remote from the negligence. Limitations. Dr Zoka Zola cannot be considered as a volunteer by the Civil Liability Act 2003(Qld) because it is not an individual and was not doing community work organised by a community organisation or as an office holder of a community organisation. There is undetermined liability because damages and innocent parties are particular. All parties have individual autonomy because they are independent companies. Rubicon Holdings Ltd has vulnerability because the work was professional. As well, Dr Zoka Zola should have been acting positively because it was a professional and the risk was obvious. Investment loss There are two actions by Dr Zoka Zola; making the high risky investment and failure to disclose incentive placement fee. Managing other person's assets may be considered as an action under non-contractual attorney’s power. Failure to disclose incentive placement fee itself cannot cause the loss of investments using the ‘But for?’ test. In terms of prevalence of care duty, causation, indeterminacy, autonomy of the parties and limitations of duties, the loss is similar to the above loss of insurance benefit. However, the result of the criterions breach of the care standard and remoteness are ambiguous. Breach of care standard: As noted before, a professional standard is how the majority of the professionals of that field could act in the same condition. From the given case it is hard to answer definitively how they could act, It depends on whether the drop of the credit rating was allowable for investment or not? The fact that Dr Zoka Zola hid the $15,000 commission could be seen as it acted unfairly and this can serve as a good argument to suggest that when it made the decision to invest, it preferred its own financial interest as opposed to the principal’s interest. This is unacceptable for the professional standard. However, in the case of even the investment being risky, but allowable by the peer’s opinion because it had potential benefit, and the failure of disclosure commission was not wilful action, Dr. Zoka Zola may argue that it did not breach the care standard. (4) Conclusion Despite the voluntary nature of the relationship, Dr. Zoka Zola has a care duty and liability for negligence. Dr. Zoka Zola has a liability to recover Rubicon Holdings Ltd’s damages for the failure to renew the insurance policy under the tort. The amount of the damage will be equal to insurance benefits. There is no potential argument to defend Dr. Zoka Zola. Also, the damage that Rubicon Holdings Ltd suffered through negligent investment is more likely to be recovered by Dr. Zoka Zola under the tort law. Bibliography Davenport, S & Parker, D., 2012, Business and law in Australia, Thompson Reuers, Sydney. Read More