Introduction
Since business is a part of the country’s economy and society, it cannot officially exist outside the law. The two main sources of legislation in Australia are case law and governmental bodies (Gibson and Osborne, 2020). The former is an unwritten civil or criminal law made by the judges in the superior courts. The latter is a statutory rule passed by the Commonwealth, territory, or state in the form of acts and enacted laws. The Australian legislation is issued by the Parliament that is executed through the Cabinet, and enforced by the court.
A contract is the fundamental element of various business interactions and trade operations. The term contract is defined as an agreement between two or more parties that creates specific promises and obligations, which can be enforced by the court (Gibson and Osborne, 2020). Australia’s contract laws can be derived from statute legislation, equity cases, and common law (Gibson and Osborne, 2020). Their primary purpose is to add a degree of certainty to relations between organizations and individuals. Contracts are generated in three basic steps: creating an agreement, having an intention, and adding a valuable consideration.
A contract may become invalid or legally unenforceable in some cases. This situation occurs when an agreement is void, and neither party can claim the obligations to be fulfilled (Gibson and Osborne, 2020). The contract may become legally unenforceable if it lacks some procedural requirement like a written document or signatures (Gibson and Osborne, 2020). When contracts are terminated or rescinded, they lose their legislative power.
A contract’s terms can be categorized as implied and expressed. The latter is usually written and discussed between the parties (Gibson and Osborne, 2020). The former is developed from the circumstances, is not expressed, and is expected to be fulfilled (Gibson and Osborne, 2020). The instance of implied terms is that a person using a taxi app will pay the driver for being delivered to one’s destination. The example of expressed contracts is stating that a promise will pay a promisor a specific amount of money for completing a particular task.
An individual entering a contractual relationship can obtain rights and have specific liabilities under the terms of the agreement. Only the parties mentioned in the contract can request their requirements to be fulfilled. Liability is the legal responsibility of a contractor to complete a particular service, deliver products, and make payments (Gibson and Osborne, 2020). The contract can be discharged if both parties decide to abandon their obligations; thus, it will not result in a court case.
If the contract has been breached, the contractual terms were not performed by one of the parties, and the only legal way to remedy is damage. Damages are assigned in the court that should determine if the economic loss happened due to the failure to perform specific terms of the contract (Gibson and Osborne, 2020). Judges will require the party that breached the contract to complete one’s obligations and repay the losses that another contractor had due to this situation.
Consumers are well-protected by the Australian laws, but this legislation is not always perceived as fair by the manufacturers and distributors. Specifically, the Australian Consumer Law (ACL) protects customers from unfair or deceptive actions of the production company (Gibson and Osborne, 2020). The risk of doing business under such legislation is that consumers harmed by a defective product can sue the company, making it pay up to a $10 million fine (Gibson and Osborne, 2020). Thus, firms are responsible for ensuring that the provided goods and services are of superior quality. Moreover, companies should avoid vague statements that can mislead or deceive their clients about the guarantees provided.
ACL includes such provisions as unconscionable conduct, recent unfair contract terms legislation, the safety of consumer goods, and the liability of manufacturers and importers. Unconscionable conduct is any behavior and contract terms that result in unfair conditions for one of the parties (Gibson and Osborne, 2020). Contracts are considered immoral if the plaintiff was in a significant physical or emotional disadvantage that affected one’s ability to protect oneself from the defendant’s actions who took advantage of that person’s state. ACL also created a set of rules that oblige manufacturers to make safe consumer goods, and if some defects are present, the producing and delivering firms are legally liable.
The law of negligence is essential for businesses because they are liable to provide care to their customers who may be unaware of specific dangers associated with the product or service. The companies are obliged to act by anticipating a particular degree of negligence among the general public (Gibson and Osborne, 2020). When the damage was purely economic, remedies should be paid within six years, but if it was personal, payment must be provided within three years (Gibson and Osborne, 2020). The two defenses that the defendant can raise in negligence cases are contributory negligence and voluntary assumption of risk, which consider the issues of the plaintiff’s own responsibility.
The main characteristics of a corporation are limited liability, perpetual succession, the right to sue, and to own property. Companies are classified as public, proprietary, limited by guarantee, unlimited liability, and no-liability (Gibson and Osborne, 2020). Corporations can be managed by a constitution that creates contracts between the firm and individual employees, directors, and other members. The duties and liabilities of company directors include loyalty, care, and acting in an organization’s best interests. Lastly, separating a company as a legal entity gives it a significant advantage in taxation, suing, and distinct liability, not associated with its shareholders.
The Unlucky Golfer
In some situations, companies create a vague advertisement that confuses their customers and results in economic, emotional, or physical damage. The case of Max Contracto is complicated because, on the one hand, there was a sign stating the person who gets a hole-in-one wins the car. On the other hand, the XYZ company claims that the automobile was placed for a past charity event. However, there was neither designation of the event’s dates nor the explicit statement that it was organized for charity purposes. Therefore, Max has the right to seek help resolving this dispute in court.
The XYZ company’s actions can be categorized as tort actions. Specifically, it can be negligent misrepresentation or tort of deceit (Gibson and Osborne, 2020). The former is defined as liability for misrepresentation that affects an individual’s reputation or causes a financial loss. The latter is described as any fraudulent presentation of information outside contractual relations. Indeed, the tort of deceit is a more suitable illustration of this case because the firm placed a deceptive advertisement to potentially attract more people to the golfing club and gain attention to its product. Still, before going to the court, it is crucial to find evidence that the car was placed not for the past charity event. Furthermore, it is critical to show that the sign did not indicate the end date and that Max was the only person to get a hole in one. Moreover, a solicitor needs to help the plaintiff identify what type of harm was imposed on him due to the defendant’s fraudulent information. It will allow him to claim that the damage was caused by XYZ’s actions and to demonstrate that Max is entitled to remedies.
This case will be private rather than public since tort is not a criminal accusation by the state for the violation of the laws. Hence, the outcome will be monetary compensation rather than imprisonment for the XYZ firm. The plaintiff may ask to give him the car that he won for shooting the golf hole in one attempt. The three things that should be proven on the balance of probabilities are the defendant’s duty of care, breach of that duty, and the damage caused to the plaintiff (Gibson and Osborne, 2020). In this particular situation, XYZ’s responsibility was to articulate the deadline for the event and remove the car once the competition ended, but they violated both terms. Notably, the company put the conditions of obtaining the prize in writing, stating that the person getting the hole-in-one wins the automobile. However, it would be more challenging to show the harm caused for Max, who was not injured, did not carry a financial loss, and was not psychologically traumatized. Still, there is a high possibility for the plaintiff to win because XYZ is unlikely to raise adequate defenses.
In summary, the golfer’s case is not hopeless and has a probability of being won in favor of Max. He can seek justice in court by claiming the tort of deceit by the XYZ firm. The company announced the win but did not place specific start and end dates and failed to remove the car when the event ended, suggesting that all the information provided was fraudulent. Since XYZ breached the duty of care, it may be entitled to pay remedies or give the car to Max, who was the only person to fulfill the requirement for winning the prize.
The Unlucky Tradesperson
Contractual relations oblige both parties to sign the agreement to complete the assigned terms and conditions. In the case of a tradesperson who provided a quotation for an organization that sent him a purchase order. However, since the tradesperson did not consult the company, the product caused significant damage to him. The central dilemma, in this case, is whose terms and conditions apply: buyer, seller, both, or neither. The law of negligence would be impossible to use in this instance if the written contract was established between these two parties. However, as it can be understood from this situation, the parties sent their terms to each other but did not come to agree on standard conditions. Hence, neither of the terms apply, and if the tradesperson wants to recover damage, he can use tort law or quasi-contract to win the case.
Although the simple contract was formed between the two parties because there was an agreement, intention, and consideration of services and goods exchange, it cannot be legally enforceable. Indeed, to be counted valid, it should have been compiled in the written form and signed by the tradesperson and the organization (Gibson and Osborne, 2020). Thus, neither parties’ terms and conditions are legitimate in this situation. Still, the tradesperson may use the concept of the quasi-contract, which is “an agreement imposed by law … irrespective of whether there is an agreement between the parties” (Gibson and Osborne, 2020, p. 100). Moreover, he can utilize the law of negligence that requires the product manufacturer to be liable for preventing dangerous effects of the items it sells (Gibson and Osborne, 2020). However, the original terms of the involved sides do not apply because they never confirmed with their signatures that they agree to these conditions.
An additional way for the buyer or seller to win the case is by providing the documentation and emails used for information exchange. For example, as in the court case of Lee Road PTY Ltd v. Catanzarity & Anor, the former was confirmed to be correct since the judges found faxes to be valid (Gibson and Osborne, 2020). Thus, if the tradesperson can demonstrate that the documents contained the promise of a safe product, then other methods, tort and negligence laws, will not be required. In fact, the opposite is also true because the seller can also provide the emails, and if statements there support the organization, it may win. This conflict and damage could have been prevented if the parties had agreed to their terms and conditions before they started to fulfill their responsibilities. Moreover, if the purchased product required specific instructions to be used, the buyer should have requested them before beginning to work with the potentially dangerous item.
In summary, this case is complicated, but my overall conclusion is that legally neither of the parties can claim their terms should apply. If the organization and the tradesperson wanted their conditions to be enforceable in court, they should have considered writing and signing the contract. Therefore, they will need to seek other ways to receive or, in the instance of the seller, avoid remedies.
The “ABC” course
One thing that has become essential in the contemporary world is intellectual rights and properties. In fact, Carl’s case is an example of a situation when moral considerations and reliance on other individuals’ word is insufficient. This example demonstrates the importance of creating written contracts in situations when one’s invention or creation is at stake. Since the presenter produced the “ABC” course, including its content, delivery, learning objectives, and draft syllabus, he should be the one holding it. However, this role was given to another person from the Training Company. If I were the presenter, I would hope to receive a remedy from this company, applying the promissory estoppel concept.
The cases when the innocent parties were harmed due to the absence of a contract and their intellectual property was used, the promissory estoppel allows to recover the damage. According to Gibson and Osborne (2020), this rule “will allow a promise to be enforced even though the promisee has not provided consideration for that promise” (p. 158). However, six considerations should be made for the estoppel to be legally enforceable. First, the plaintiff assumed or expected a particular legal, contractual relation would exist with the defendant (Gibson and Osborne, 2020). Second, the defendant made the plaintiff believe that the agreement would be formed (Gibson and Osborne, 2020). Third, the innocent party abstains from acting to acquire intellectual property in anticipation of a contract (Gibson and Osborne, 2020). Fourth, the defendant knew about the situation, and fifth, the plaintiff’s inaction would result in a detrimental outcome (Gibson and Osborne, 2020). Lastly, the defendant failed to act and prevent an unfortunate result for the plaintiff (Gibson and Osborne, 2020). For Carl’s and the Training Company’s situation, all the points can be applied, and hence it can be resolved using the promissory estoppel doctrine.
The innocent party, the presenter, can obtain commercial and legal remedies. Specifically, the court has the power to make the Training Company repay a particular amount of money to Carl for using the course he created. Another possibility is that the judge may temporarily prohibit the firm from utilizing the “ABC” course before remedies are paid. In fact, the latter is a likelier outcome of the case because the application of the promissory estoppel doctrine “is really limited to only a suspension of the promisor’s rights, not a termination of them” (Gibson and Osborne, 2020, p. 162). The amount of compensation for the presenter may either be established by him or the judge.
To summarize, this apparently unfair situation can be resolved in favor of the presenter, who is considered an innocent party whose intellectual property was openly taken away by the Training Company. The doctrine of the promissory estoppel can be applied in this case to stop the firm from using the course developed by Carl and make them pay him remedies. Overall, to prevent such situations in the future, Carl should first sign the contract with any company before providing all the materials for the courses he invents.
Clauses
Our company signed a new contract with the CASE college’s library to provide them access to our database of scholarly articles and books. Our organization, the seller, owns the NERD database, where students and researchers can retrieve papers and textbooks in natural sciences. The contract is signed for the period of one year, which will need to be renewed after that time ends. This report aims to explain six terms in our agreement: force majeure, indemnities, intellectual property, liabilities, payment, and pricing.
The first concept mentioned in the contract between the CASE’s library and NERD is force majeure. This term can be understood as any unforeseeable circumstances that prevent one of the parties from fulfilling their duties according to the contract. For example, environmental disasters, terrorist attacks, armed conflicts, and wars are considered force majeure. In such cases, the parties’ responsibilities will be postponed until the time when these circumstances disappear.
The second term used in this document that needs to be explained is indemnities. This concept means that the party that fails, for some reason, to complete one’s part of the contract is obliged to repay remedies to the party affected by this delay. Furthermore, indemnities are applicable in cases when one of the parties breaches its liabilities listed in the agreement between CASE and NERD.
The third concept utilized in the contract is intellectual property rights. Examples of intellectual properties are trademarks, designs, copyrights, and patents (Gibson and Osborne, 2020). It is critical to note that all works available on our database belong to the authors or publishers. Thus, our partner in this agreement will be asked to discuss with students and instructors the importance of giving appropriate credits when using information from these sources.
The fourth term in this agreement is liabilities and especially caps. Liability is an obligation under the contract that cannot be transferred to third parties (Gibson and Osborne, 2020). It means that the NERD company cannot ask other databases to fulfill its duties for CASE because they may lack specific documents needed for students and instructors in this college. Furthermore, if the contractors fail to complete the agreement terms, especially if they breach their liabilities, they will be obliged to pay a fixed or capped sum.
The last two concepts that need to be articulated are payment and pricing. The latter indicates the cost of the NERD’s services, while the former is the amount of money CASE will be required to pay annually to the promisor for using its database. Other types of money transfers will also be called “payment.” For instance, remedies for certain breaches of liabilities and other forms of monetary exchange between the partners are described as payment in the contract.
Conclusion
In summary, understanding the terms used in a contract between business partners, buyers, sellers, and other parties is essential. This report defined such six concepts as payment, pricing, liabilities, force majeure, indemnities, and intellectual property. These terms are crucial for the seller, the NERD database, to provide high-quality service to the buyer, the library of the CASE college. Moreover, if disputes appear, the NERD’s leaders should know the details of the agreement and the reasons for potential financial losses.
Reference List
Gibson, A. and Osborne, S. (2020) Business law. 11th edn. Pearson Australia.