Legal Forms of Doing Business - Case Study Example

Case Study Business Law Name Name of Institution Case Study Business Law Legal Forms of Doing Business Question 1 The Australian partnership legislation defines a partnership as a relation that exists between people who are carrying out a business with the intention to generate profits.1 This means that a partnership comes into existence when two or more people come together to run a business. In addition, they have to carry out the business in common with the view to profit. The given scenario indicates that two individuals have come together to run a sports bar. Each individual contributes $50,000 and work together in negotiating the lease for a building, paying the rent, and purchasing equipment. It is clear that both parties intend to generate profits from the venture that will involve repetitive trading activities. The presence of these elements satisfies the requirements for the business structure to be referred to as a partnership. This is despite the lack of a formal written business structure. In Whywait P/L v Davison [1987] 1Qd R 225, the court established that a business structure can be a partnership even when there is no written description of the arrangement.2 Question 2 Parties in a partnership have the right to resolve any disagreements, but all partners must consent to any changes to the scope of the partnership’s business.3 Additionally, parties involved in a partnership have the right to issue notice for the dissolution of the partnership.4 Disagreements with Adam should result in the issuance of such notice for the dissolution of the partnership and the business. The legal consequence is that the partnership assets will be used to pay off existing debts as well as the capital contributed by the partners.5 In the absence of an agreement, all property brought into the partnership becomes jointly owned by the partners.6 This was confirmed in Robinson v Ashton (1875) LR 20 Eq 25.7 As such, I would lose direct ownership of the furniture that I contributed, and would have to await the repayment of all debts to get an equal share of the remaining partnership funds. It is evident that the lack of a partnership agreement would limit the available options to dissolution, which would lead to losses to me as my contribution of furniture becomes partnership property that would be shared on dissolution. Question 3 A partnership offers an advantageous business structure for the Pop Up Sports Bar. The advantages include the lack of formalities, low costs during formation and management, pooling of experiences, and tax advantages. However, the lack of a partnership agreement exposes the business to some of the disadvantages of this type of business structure. The drafting of a comprehensive partnership agreement would go a long way in formalizing the business relationship. The agreement should address the roles and authority given to each partner, how decisions will be made, dispute resolution mechanisms, contributions of the partners, and how to make changes to the agreement.8 It is evident that such a document would have a positive impact on the management of the business as each partner would have clear expectations and develop respect for rules. It is apparent that the agreement will also protect the partners from some of the legal consequences of disagreements and dissolution. For instance, there could be an agreement that the furniture remains my property in the case of dissolution. Finally, the partnership agreement offers a means through which the business can be altered.9 Dealing with Customers and Competitors Question 1 Australian Consumer Law bars businesses from engaging in deceptive or misleading conduct in the course of trade or commerce. In ACCC v Telstra Corporation Ltd (2007) 244 ALR 470, the court ruled against a defendant who advertised that their network covered the entire nation while its network was limited to certain areas.10 This situation is similar to the given scenario. The statement that customers will get the opportunity to drink with David Beckham is deceptive. Additionally, the presence of a full-size cut-out does not give the business the right to use the full page advertisement as customers are likely to come to the pub with the intention to meet David Beckham in person. As in the case of Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646, the business should expect to pay a significant amount in fines and cover ACCC’s legal costs.11 Question 2 It is evident that the sports bar was engaging in deceptive conduct when it advertised a special drink on local radio. The description of the drink coupled with the special price was bound to convince some patrons to visit the store. It is clear that the application of the objective test will find that a reasonable person will be deceived by the advertising. The sports bar might offer the defence that it posted an apology for failure to get one of the critical ingredients. This apology can be considered as a disclaimer, but ACCC v Telstra Corporation Ltd (2007) 244 ALR 470 established that such disclaimers do not prevent the sports bar’s conduct from being deceptive.12 In conclusion, the sports bar should expect a decision in favour of the ACCC. Question 3 In Taco Company of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177, the court established the means of deciding whether a specified conduct is deceptive.13 One of the findings in the case was that a business that starts operations before the other gets the naming rights. In the given scenario, Pop Up Sports Bar is a new business that is located next to a restaurant that has been existence. It is also evident that the names of the signature dishes are likely to deceive patrons. As such, the sports bar is engaging in misleading conduct. Employing Staff Question 1 The court will have to establish factors such as the nature of Donna’s tasks, the form of payment, work hours, provision and maintenance of tools, and whether the worker can delegate.14 While Donna retains the right to choose when to work, the business still expects her to work once a week or three times per week during university breaks. The payment is fixed, and the management has control over how she serves customers. As such, Donna is an employee and not an independent contractor. The consequence for the business is that it will have to pay the costs of Donna’s rehabilitation from the broken risk as her injury occurred during the course of employment. Question 2 Employers retain the right to determine how employees should present themselves in the workplace.15 However, the dress code should be applied to all members of staff to ensure that no one is discriminated against on the basis of age, race, sex, religion, disability, or sexuality.16 While Emma works in a bar, the bar retains the right to avoid a negative image. As such, I would have the right to ask Emma to stop wearing revealing clothing as long as the same standard applies to all male and female employees. Failure to comply with this requirement will amount to a breach of a condition in the employment contract on the part of Emma. This will give me the right to terminate her employment. Question 3 Employers have the right to terminate employment if there is proof of an actual breach of a condition in an employment contract. Sharing what can be considered as the bar’s trade secrets and confidential information is a breach of an employee’s duty to the employer. Additionally, the downturn in business leads to the conclusion that Emma has breached the duty of not assisting the bar’s competitors.17 Therefore, I have the right to terminate Emma’s employment on the condition that she is given notice of the coming termination. Question 4 In Hill v Water Resources Commission (1985) EOC 92 127, the plaintiff complained to management about discrimination from her male colleagues.18 The management failed to take any action, leading to the plaintiff’s decision to take action against her employer. The court ruled in favour of the plaintiff and awarded her a generous compensation. The case is similar to the given scenario as Freddy has complained to management about sexual harassment. In this case, failure to take action against Donna would expose the business to litigation. The likely consequence is that the court will rule in favour of Freddy, and the business will be vicariously liable for Donna’s actions as it failed to take sufficient steps to prevent harassment.19 The business should expect to pay considerable amounts in damages to Freddy. References ACCC v Telstra Corporation Ltd (2007) 244 ALR 470 Australia Telecommunications Commission v Hart (1982) 65 FLR 41 Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646 Bree v Lupevo Pty Ltd [2003] EOC 93–267 Hill v Water Resources Commission (1985) EOC 92 127 James, N, 2014, Business Law 3rd Edition, John Wiley & Sons Australia. Partnership Act 1891 (SA) Robinson v Ashton (1875) LR 20 Eq 25 Taco Company of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 Whywait P/L v Davison [1987] 1Qd R 225 Zuijis v Wirth Bros Pty Ltd (1955) 93 CLR 561 Read More