A Contractual Agreement in Respect to Leasing and Property - Assignment Example

Legal Analysis Report Name Student Number Institution Course Code Instructor Date Legal Facts in the Case Analysis From the case study, the overall analysis involves contractual agreement in respect to leasing and property, purchase and supply, and finally analysing the restraint clause application in the restaurant employment of a chef. Successful leasing of property occurs with the landlord signing a lease also termed as a tenancy agreement prior to putting the premises to use. Part 1: Leasing and Property Commercial tenancy agreements in Australian are bound by the Retail Leases 2003 and must comply whether written or oral.1 In Australia, landlord and tenant laws take precedence in leasing and property contractual agreements. Every party has rights that are well-protected by the Residential and Tenancy Act in each state (Hepburn 2001). Critical considerations are necessary to ensure official formalisation of the tenancy agreements and hence, the extra hotel space requires a new agreement where both parties must be in consensus. Amid the fact that the two had been having a relationship with the one unit offered before, the new restaurant space warrants for new tenancy agreement to be in place. For the tenancy agreement to be valid and complete, there are various items, terms and conditions that are necessary to be provided by the landlord prior to the tenant signing the lease agreement. The lease provided by James ought to contain the following outlines the amount of rent to be paid and mode of payment; length of tenancy and type; other rules and conditions for the premise use; any special terms that are agreed upon by both parties. Leasing of the restaurant premises is a contractual process where the owner and the tenant have to come to agreement for fair conducting of the expanded business enterprise. Provision of all items to the standard leasing process is inevitable with critical terms and conditions necessary being provided effectively.2 Other than the standard lease provided for signing and a copy to be left with the tenant, the landlord ought to provide a copy of tenants guide, a copy of the owners rules for use where applicable; two copies of the premises condition report; details of whether the tenant can initiate repairs and the maximum amount; contacts to the landlord. In the case study, the landlord has provided the tenant with a standard leasing contract which seems to have items and recommendations for renovations hampering the effective business operation of the restaurant. The tenant is happy with the premises at it is and does not buy the idea of connecting the two restaurants to make double room since business will be affected for two weeks. This is contrary to the legal contents of clause 5.1 of the Lessee’s Consent where any proposed processes by the lessor on the property are not supposed to materially detrimentally affect the user in respect to effectively accessing the premises. Under clause 5.1, the landlord is bound by the fact that he cannot introduce changes that hamper the daily operations of the restaurant business.3 On the other hand, the tenant has the obligation of raising his concerns and displeasure with respect to the terms and conditions of the standard lease provided to reach a consensus. 1.2. Obligations and Liabilities under Clause 5.1 Clause 5.1 obligates the lessee to sign a consent provided by the lessor and the agreement ought to ensure that the proposed process of acquisition does not affect the use or access of the premises. The liability of the clause is that upon signing of the consent, the lessee is bound by the conditions entrenched in the clause 5.1 of the lessee’s contract. However, both the landlord and the tenant, and especially the tenant are supposed to consider and negotiate the terms of the commercial lease at hand and comprehend their rights and obligations as stipulated under the lease, as well as ensure the property is well suited for the business operation (Sayce 2009). The lessee is entitled to a full disclosure of the conditions and associated rights and obligations in a report by the tenant on the premises at hand in respect to respective state and territorial laws.4 Sign agreements are done in writing after reaching a consensus and meeting all conditions for a leasing contract as per Australian law. According to Residential and Tenancies Act 1994 (QLD), agreements are done in writing and details must be prescribes followed by a statement of rights and obligations as provided by the lessor,5 followed by a report indicating the premises condition that will eventually serve as evidence of the premises condition in the future.6 Subsequently, the tenant is entitled to enjoying the full duration of lease as illustrated in the standard agreement without interruption (Duncan 2011, p. 225). This ensures that the lessee is safeguarded from being evicted from the premises without notice. 1.3. Ceiling fans are not fixtures The need to install ceiling fans brings the aspect of fixtures which form part of the property. Fixtures involve items or things that are permanently attached to a property, thus becoming part of the land and cannot be removed without causing damage. The lessor has stated that the tenant must install ceiling fans over the ovens to avert damage from smoke. In this regard, ceiling fans are not fixtures but chattels and can hence be removed while the tenant is vacating the premises. In respect to Commercial Tenancy Agreement Act 1985; refitting of the premises is void unless clearly indicated in a clause within the lease agreement stating the nature and extent. Further, the tenant contributing towards the costs of equipment in the premises is void unless notified of the costs necessary through a Disclosure Statement issued to the tenant. There is need for clarity to the chattels inclusion in the lease agreement and what will happen in the long run upon vacating the premises. Exceptions are made in the event clear terms are stated in the leasing agreement (Hepburn 2011); this is due to the fact that fixing of the ceiling fans is inevitable to ensure James maintains the condition of the new premises to avoid calls for compensation or renovations in the future. Leasing and commercial property legal standing as entrenched in a commercial property lease indicates that a tenant should leave the premises as they found them.7 The installation of the fans in the kitchen ceilings are aimed at ensuring no damage by smoke, however, the chattels belong the tenant as they were not part of the premises upon signing the lease. The lessee has the obligation of enjoying the premises rented with respect to the internal environment as indicated by Hawskesbury Nominees Pty Ltd v Battik Pty Ltd.8 In this consideration, and the facts outlined in the Act9 above, it is imperative to conclude that the tenant to the restaurant has the right to move with the ceiling fans in the event of vacating the premises. However, clear indications of the fixing of the ceiling fans are necessary in the agreement with clear outline on how the fans are to be placed, the one to foot the bill between the two parties and whether the tenant have rights over them during vacating the premises (Robertson 1994). This is crucial in order to avert any crises in the future and promote transparency and harmony in the tenancy agreement process. Part 2: Contracts 2.1. What can be claimed from the Landlord? Contractual leasing agreements require critical consideration and complete transparency and protection of both parties, as well as the premises at hand. Prior to signing a contractual agreement to rent a commercial premise, it is imperative for the lessee to acquire all relevant items from the lessor (James 2013). The items to be claimed by a tenant from the landlord for prior to signing the new contract for using the new space for the restaurant involves a copy of tenants guide; owners rules and regulations for using the premises, two copies of the lease agreements (for signing and keep one copy); two copies of updated condition of the business premises to be rented; and contacts of the landlord for communication purposes (Duncan 2012). Further, there is need for an agreement on the eventuality of tenant initiating repairs in restaurant, as well as the conditions and the maximum amount that can be met. Consideration of the premises prior to signing of the leasing agreement is inevitable. From the tenancy agreement, all equipment is supposed to be in good working condition failure to which the lease contract is not binding.10 From analysis, it is evident that one oven is not working and hence the need for repair. In this context, with respect to the agreement, the tenant has the right to demand retroactively the assessment of the installed equipment or repair to ensure effectiveness prior to using the premise.11 The tenant has to claim every required item to accompany the standard lease provided especially the premises condition report which is crucial during terminating the lease in the assessing any probable damage to the premise. 2.2. Contractual issues arising in order to avoid paying the money asked by the brother. Contractual agreements whether oral or written are legally binding and thus, the oral agreement to supply fish for making gourmets is valid. In respect to Australian Consumer Law, consumer guarantees are keenly enshrined with key guarantees in sections 54 and 55 providing the need for ensuring quality of products and fitness for purpose.12 The fish supplied are not of good quality and not well preserved with ice, and thus, the payment cannot be made as the transaction fails to meet the key guarantees of sale as per Australian Contract Law section 54 and 55. In line with section 5413, goods are supposed to be of acceptable quality upon being fit for all the purposes they are being supplied for, as well as acceptable in appearance and finish. With these contractual issues, the payee can effectively argue against paying for the delivered fish. According to Wislon (2009) with conclusive terms necessary to terminate a contractual agreement, any party has the right to decline payment if the other party breaches the contractual agreement. Every party in the contractual agreement is supposed to meet their end of the bargain any failure results to a breach of the contract making the agreement invalid. In this context, the restaurant owner will give a detailed explanation to the brother on the contractual terms to the supply of the fish and specifically state the inefficiencies in the final supply. Having outlined the supply not meeting the standard, the payment will thus stand declined unless the supply is done again as per the set standards. 2.3. Obligation to sell the T-Shirts to Zena at $5.00 each Advertisement is covered under the Australian Consumer Law14 which ensures fair trading of goods and services. It is illegal to come up with claims to customers concerning goods and services that have been advertised and prices appended. The price advertised by Carol is binding, even if it is not correct and thus, the customers asking for the items have to be sold the t-shirts at a loss since. In this regard, there is an obligation to sell the 30 t-shirts to Zena and rectify the advertisement with the correct actual price. This means the business will have to incur a loss which can be tackled by addressing the discrepancy caused by carol. Since the business entered into an agreement with Carol to make the advertisement, she is solely liable to the mistake. Thus, the business can hold Carol liable of making wrong adverts contrary to the instructions which has cost the business a loss to avert legal action.15 Trying to convince Zena of the wrong pricing would not only attract legal liability, but also results to portraying bad impression to customers which is detrimental to the future reputation of the business premises. Upholding the integrity of the business enterprise takes precedence for a business person to ensure persistence and continued effective performance. 2.4. Have the fridges been sold, and, if so, at what price? The fridges were sold at a price $4,800 since the seller’s confirmation come prior to the buyer’s acceptance of the higher price of $5,000. In context, Tina’s confirmation of a $5,000 pay to the fridges at 9:30am was overridden by the seller’s confirmation of accepting the $4,800 which was received at 9:40am. Confirmation of the sale would occur with the validity of the contract through confirmation of electronic means of communication and receipt. The Electronic Transactions Act 1999 indicates that upon provision of the time of email receipt, the time becomes the contractual time in the event of a designated information system.16 Nevertheless, in the event there is no designated information system, the receipt time is the time the message comes to the attention of the recipient. In this case, the recipient must receive the message and be aware of its existence for the communication to be successful.17 In this case scenario, the fridges were sold at the price since the seller’s confirmation takes precedence as it superseded the buyer’s confirmation with respect to time of email receipt. The use of email in the issuing of contractual notices can be tricky in the proving of delivery, as well as ostensible authority. Due to lack of no statutory or common law rules about use email services. Electronic Transactions acts provide critical guidance to determine a notice of sake sent via email. The principal objectives of Electronic Transactions Acts are viable in the confirmation of the validity of contracts carried out via electronic means.18 Generally, email use in communication is perceived as formal issue of notice in contractual transactions and may bring about contractual liabilities or lead to contract breach. 2.5. Is George bound by the ‘restraint clause in the letter? If so why? If not, why not? Post-employment restraints are introduced by employers to safeguard legitimate business interest and confidential information and hence, are outlined during contractual signing of employment. The restraint signed by George six months ago is enforceable and hence he is bound by the clause in the letter that he will not work “in any capacity for another burger establishment anywhere in South Australia for a period of five years. Post-employment restraints are enforceable at common law and are prima facie invalid as infringing public policy. The restraint is only enforceable in the event restrictions included are mainly necessary to protect the employer on the legitimate business interests (Nehme 2007). With regard to the Federal Court of Australia decision between HRX Holdings Pty Limited and Pearson,19 it is imminent that post employment is reasonable and enforceable. The facts holding the restraints enforceable as indicated above and hence George cannot open the “George’s Burger Restaurant” within South Australia, and since George is determined to be self-employed, it would be worth relocating to avoid legal battles with his employer. Reference List Laws and Statutes Australian Competition and Consumer Commission v Channel Seven Brisbane Pty Limited [2009] HCA 19, 2009 Commercial Tenancy (Retail Shops) Agreements Act 1985. Western Australia. Competition and Consumer Act 2010. Australian Consumer Law (Cth): Misleading or Deceptive Conduct. Accessed online November 26, 2015 from . Competition and Consumer Act 2010. Commonwealth Consolidated Acts. Electronic Transactions Act 1999 (Cth). Government of Western Australia, 2015. Commercial Leases: Main Issues to Consider. Accessed online November 25, 2015 . Hawskesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185. HRX Holdings Pty Limited v Pearson [2012] FCA 161 Retail Leases Act 2003. Victorian Current Acts. Sherman, J. and Stanfield, A., 1998. Final Report about the Council of Chief Justices Electronic Appeal Project, Vol. 96. Books and Journals Christensen, S. and Duncan, W., 2009. Sale of Businesses in Australia. 2nd ed. Sydney: The Federation Press. Duncan, W., 2011. Commercial Leases in Australia. 6th ed. Sydney: Law-book Co. Duncan, W.D., 2012. Assignment of Lease between Lessees as joint Tenants-is-Lessor’s consent Required? Australian property Law Bulletin. Vol. 26, no. 9, pp. 128-129. Hepburn, S., 2001. Principles of Property Law. 2nd ed. New South Wales: Cavendish Publishing Pty Limited. James, N., 2013. Business Law, 3rd ed. Milton, Queensland: John Willey and Sons Ltd. Nehme, M. and Adams, M., 2013. Section 18 of the Australian Consumer Law and Environmental Issues. Bond Law review. Vol. 24, Iss. 1, pp. 30-59. Nehme, M., 2007. Enforceable Undertakings: A New Form of Settlement to Resolve Alleged Breaches of Law. University of Western Sydney Law review. Vol. 11, pp. 104-117. Parker, C., 2004. Restorative Justice in the Business Regulation? The Australian Competition and Consumer Commission’s use of Enforceable Undertakings. The Modern Law Review. Vol. 67, pp. 209-213. Robertson, A., 1994. ‘Competing Priority Claims to Fixtures’ In J.A., Greig and B. Horrigan (eds.). Enforcing Securities: The Law Book Company. Wislon, S., 2009. Terminating Contracts. Journal of Building Appraisal. Vol. 4, pp. 225-230. Read More