Warrnambool Cheese & Butter Company - Corporation Law - Assignment Example

First name Last name Instructor’s Name Course Number 18 May 2018 No. of Words: 1,915 Business Law 1. Identify the areas of law that are relevant to the chosen media report, and explain how they are relevant to the matters outlined in the report. Corporation Law: This would apply because WCB is a corporation. This means that by way in which the business structure of WCB are conducted are in form of a corporation. This means that Murray Goulburn will have to fight the $500 million battle of taking over the control of WCB with the Canadian dairy giant Saputo (Binsted and Lynch). According to the laws on corporations Goulburn needs to provide valid reasons for the takeover to the Australian competition tribunal so as to be able to justify the takeover in relation to the benefits this would have to the general public of Australia (Hamilton and Freer). Contract Law: In this news item contract law will also apply since the issue is about a business man buying off the Warrnambool Cheese & Butter Company. There is also the issue of creating mergers with another company which will require that the company signs the contract to inform how this will be done. The Canadian dairy giant by the name Saputo will also need to sign a contract of takeover from the Warrnambool Cheese and Butter Company. Murray Goublin will also need to sign a declaration of the end benefits that the takeover is going to have for the Australian residents (Hillam). Property Law: This law will also be applied since the issue in the news involves taking over the Warrnambool Cheese and Butter Company to be owned by a new company. Modalities in which this will take place needs to be agreed upon so as property rights are clearly spelt out for the new holder. Transfer of the property will also need to be documented well and funds agreed upon (Spranklin). 2. Demonstrate how the law functions in these various ways, by reference to specific examples within the chosen media report and the areas of law you identified in question a) Ensures reasonable predictability in daily life The law will be able to tell the future of an action before the two parties have actually come to an agreement. It is important as this will advise the government to think over the issue of a takeover and assess the implications that this will have in the whole structure of the new ownership. By use of the article predictability is mentioned in the were the ACCC is concerned about the competition for milk in victoria south west as was the case when Goublin made an unsuccessful bid of the same company in 2010 (Binsted and Lynch) b) Encourages and discourages certain conduct This part of the law can be expressed through contracts. They are important ways in which the laws is applied as it makes sure that the two parties in business commit themselves and do what both of them have agreed to do. For example, by use for the news article, we find out that there is an amount of $500 million in offer to take over Warrnambool Cheese and Butter Company, in addition there is an assurance of the end benefits that the takeover is going to have on the people of Australia. By use of laws it will make sure that the proprietor provides evidence of benefits and at the same time the takeover will have been complete under a signed agreement of the amount. (Binsted and Lynch) c). Grants rights an powers to individuals and groups The law is able to protect property rights of the WCB ownership. In addition the dairy milk business in Australia will also be protected especially among small medium enterprises that are involved in the dairy business. As the takeover is bound to be effected, the rights of the new owner will be protected and business conditions will also be friendly and without prejudice. d). Imposes obligations on individuals /organisations to meet their legal responsibility Legal responsibility will be based on the terms of contracts meaning that when a business agreement has been entered then it will be a legal obligation that each party to the contract do as has been laid down on the contract. In the article provided, the legal obligation for Murray Goublin was to respect the ACCC directives on the issue of competition and also ensuring that the takeover will benefit the Australian people. e). Allows for the enforcement of recognised rights and duties Recognised rights in business law will include the right for people to transact a transparent business which is free of malice. Business transactions should also be made in accordance to the laws of the country. In this sense the parties involved will be obligated by the government to observe ethics and practice in the business. To add on that, there should be a chance for equal competition. For example if the WCB takeover should take place then it will be then Canadian dairy giant Saputo will be called upon to respect equal competition from other dairy firms. f). Provides remedies when injustice has been done Remedies in business would happen if the business transaction details were to be equally balanced. The transaction that could take place by Saputo and WCB should be done in a sense that it provides mutual benefit for the two. Justice should be seen in a situation where it is found that the dairy giant imposes business activities or rules that may hurt an open competition among dairy businesses in Australia. Justice in the area of law is also in relation to the rights of people whom the company is meant to serve. In this case Australia regulatory body is afraid that if the transaction takes place the rights of small dairy manufactures and farmers will be violated. There is also a case where the monopoly that is suggested by Goublin may not work for Australia. This is because many dairy farmers in the industry will be left with no place to sell or retain their products. Injustice will also occur if Goublin will have signed an agreement with WCB only to have it revoked by the Australian regulatory body when funds have already been transferred to seal the deal. In this sense one of the way that the law can be applied to remedy this will be finding a way in which the Australian government is going to compensate Goublin for the loss acquired during the transaction. In another situation, if the transaction takes place and renders most of the people working at the WCB before it is sold jobless, the law will be used to find ways in which these people can be compensated so that there is not public outcry over the sale. 3. Why it was important for the relevant party/parties to know the law in the circumstances? How did, or could, the party/parties have applied the law to their advantage? The reason why it is important for the relevant parties to know the low in the circumstance is so that they can be able to enter in to a business agreement that will provide mutual benefit. The law will also provide them with legal procedures that they will have to follow before finally taking over the WCB. The two parties will also be able to understand the legal implications that they will have for the takeover. The other parties will also need to understand the law in order to know what they can do with their current workers and also come up with a lay out plan in case the new company may not contain them. The parties can apply the law to their advantage in two ways. Murray Goublin could make an offer to buy the company to WCB; if they will be attracted to the offer they would then respond and ensure that a contract has been signed with all the terms of the contract. On the other side, WCB could fight off the contract by providing the ACCC with reason as to why the takeover might harm the competitive advantage of other small companies like WCB. Knowing other aspects of the business law will also enable the company to understand their rights and duties, in so doing business that will continue thereafter will be able to be done under special terms. By knowing the law, the company buying and the one selling the dairy plant will also be able to understand the role that each of them will play . More significantly, it will enable the WCB Company to have access to other possible remedies when their business rights are violated by the legislature or I the judges make a decision in favour of Murray Goublin. In this sense they will be in a better position to reject the ruling and file for an appeal with a viable reason as to why they feel the sale should not take place. In addition, by knowing the law the company is also in a better position to reshape public opinion in their favour, for example if Goublin feels that by taking over the company, it will provide an opening for small scale farmers to sell their raw products at more competitive prices, then it will use this advantage to convince the regulatory body and the judges to rule in their favour. The law is also good in helping to protect the rights of the investor, Murray Goublin is putting in a lot of money offer in buying the WCB, however if this is not done in accordance to the Australian law, the company though would have been sold by an agreement, by sadly be revoked if it was not done in accordance to the rules and procedures of the Australian laws. 4. How do the media influence public perceptions about the law and its administration? How might public pressure impact legislators and judges in establishing the law? The media is a strong tool for influencing public perceptions about the law since the media is usually put in place so that it can be able to shape public opinion on a particular law or the application for such a law. In the article provide one finds that the media talks a lot about the issue of competition once the takeover has been done. In doing this the media works to get public support against the sale of WCB. In this sense if the takeover of the company will not be to the favour of the public then the law that would have been used by Goublin to take the company will not be applied. In addition public pressure will also ensure that judges and legislature act for what the public would desire. In this sense the judges will look at the business deal in order to establish whether going ahead with the deal will be in public interest or not. If the matter is against the public interest of the Australian people then business deal will not take place in the long run (Hamilton and Freer). For this reason application of business law is always looked at in relation to matters of public interest. If the transaction that may take place is bound to for example render many residents unemployed or risk the other small businesses in the Australian community then the transaction will not take place in any way. Public pressure will in the long run be the major determinant on how the decision by the court will go in the long run. Sources Binsted, Tim and Jared Lynch. “Regulators Question WCB Bid.” Australian Finance review 8 January 2014: 15. Hamilton, Robert W. and Richard D. Freer. The Law of Corporations in a Nutshell, 6th (Nutshell Series). West; 6 edition, 2010. Hillam, Robert A. Principles of Contract Law, 2d, The Concise Hornbook Series . West; 2 edition , 2012. Spranklin, John G. Understanding Property Law. LEXISNEXIS; Third edition, 2012. Read More