country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Question:

Discuss about the Business Commercial Transaction.

 

Answer:

Parties

The assignment covers the business and commercial transactions in consideration to the “Australian Consumer Law and Commercial Transactions”. The concerned parties in the assignment are Fred, Southpac Bank, Fred’s parents, John and Abacus and Associates. Fred graduated in marketing subject and started his own advertising consultancy business that succeeded until two years. He wanted to expand the business after two years of success and approached John to prepare the business plan. John was a client manager in Abacus and Associates, an accounting practice firm. John’ service with the firm was under an agreement that the outside clients’ advice should be approved and signed by the partner of the firm. Other parties i.e. Southpac Bank and Fred’s parents are the parties provided loan to the Fred based on the business loan provided by John and his firm.

 

Issues

In the present situation, issue that have been observed are negligent misstatement made by John and his accounting firm, Abacus and associates, Liabilities of John and accounting firm towards the Southpac Bank and Fred’s parents for presenting the negligent misstatement. These issues have been raised because the business plan that was created by John in approval with Abacus and Associates did not contain true and complete information. The business plan did not contain the liabilities and obligations towards John and there was no identification of national competitor in the same business industry. Fred also discovered that the business plan prepared by John and his accounting firm had understated the cost of business setup. The same business plan had been forwarded to the Southpac Bank and Fred’s parents to borrow loan amount for the purpose of business development. Since both the parties i.e. Fred’s parents and Bank had approved and sanctioned loan to Fred for 5 years period, John and Abacus and Associates are liable to provide negligent misstatement. Due to such incorrect misstatement, Fred incurred losses and was unable to pay back to the Bank loan, his parent’s loan amount and lease rentals. Fred had to experience legal actions from the Bank and lessors who provided the place on lease because of the incorrect and negligent misstatement.     

Rules

According to the section 18 (1) of Australian consumer Law, any statement provided by the parties to the business or agreement is deceptive, misleading or negligent is prohibited for the business consideration (Barker 2015). It states that any statement which have been either omitted or wrongly presented and that the presence of such statement provides material information to the parties would fall under the category of negligent misstatement. Further, negligent misstatement is an actionable claim under the common law that represents the intention of the provider of the statement is to deceive the receiver of the statement. In case the negligent misstatement is proved before the court, then the party can claim for the damage as per section 236 of “Australian Consumer Law” (Lasker, Klein and Barago 2015).

 

Application

Considering the rules and provisions on negligent misstatement and the present situation of the case, it has been analyzed that the business plan presented to Fred was contained with negligent misstatement. John and the accounting firm, Abacus and Associates willfully omitted the terms of John’s liability and deliberately understated the cost of business setup. Further, the parties also excluded to present the identification of a national competitor of Newtown in the same industry. According to the facts of the case, John was an old friend of Fred agreed to create business development plan for Fred and presented him after few days. However, John did not get the approval from his firm’s partner as per the employment terms and condition. On the other hand, John handed a letter to the Bank and Fred signed by the firm’s partner that mentioned the parties does not own any liability for the accuracy of the information.

As a matter of fact, two situations arise in the present situation, one is the omission of important information and other is misleading information in the business plan. Another situation is the presentation of letter that stated the company has no liability on accuracy of the information. According to the case decision of Google Inc v ACCC, it had been concluded that the company was not involved in presenting the misleading information since it was lack of understanding at the reader’s part. On the contrary, it may be noted that the business plan provided by John did not contain the correct and complete information. Hence, it can be said that the there was negligent misstatement made by John to the defendant Fred.

Further, as per the common law the superior party to the contract or action for providing misleading information of misstatement by the respondent also held liable. In the present case the misleading information had been given by John but his accounting firm Abacus and Associates also held liable. According to the employment terms and conditions, John did not get the business plan approved by the firm’s partner but the letter has been signed. Therefore, the firm and the partners are partly responsible for approving the letter without approving the business plan. Based on the case of Lister v Hesley Hall Ltd vicarious liability had been imposed on the employer for unlawful and illegitimate acts of the employees because of the employer’s superiority level and authorization rights. Mere presentation of the exclusion of liability in the letter does not waive the responsibility of the superior and contractor.

 


In addition to this, approval of bank loan was also given by Southpac Bank on the basis of Fred’s application as well as the business plan. In this situation the signed letter mentioning the exclusion of liability of the contractor or party to the agreement cannot be regarded as clear evidence for stating all the required material and correct information. For any business transaction or business action significant documents like agreement between the parties, documents of business plan or any other specific documents are required. All such documents should be accurately and appropriately drafted with the approval of concerned parties. In case the documents are discretely drafted with the intention to deceive the respondent party then the creator of such documents would be held liable for negligent misstatement.

Moreover, the misstated business plan prepared by John and his firm also deceived
Fred’s parents as they provided loan to Fred $20,000 to be repaid in 5 years. However, the loan from parents was taken by Fred without letting John know therefore, it can be argued that John and his firm are not directly liable for misstatement. Besides, the firm Abacus can be held vicariously liable for representing misleading information in the business plan as well as approval of letter without approving the document of business development plan. In this situation, John’s liability to the parents can be excluded as decided in the case of Olley v. Marlborough Court Hotel (1949) based on the contract law. In case of presentation of misleading document to Fred’s Parents by one party i.e. John can be held for vicarious liability because the disclaimer made in the letter was not a part of the business plan and agreement.

Likewise, Abacus and Associates is vicariously liable to the Southpac Bank because the disclaimer in the forwarded letter was not a part of the loan application disclosures and document of business plan. Apparently, it has been clarified in the legislation that the party to the contract or agreement is required to disclose all the necessary facts including the exclusion liability clause. However, in no case the party is allowed to present the misleading or inappropriate information with the intention to deceive the other party. Accordingly, John is responsible to present the correct and accurate information in the business plan since a mere disclaimer in the letter cannot exclude his liability.  

 

Conclusion

Considering the facts and discussion on the present case, it can be concluded that John presented the negligent misstatement in business development plan whereas Abacus and Associates is vicarious liable for such misstatement. Mere presentation of exclusion of liability in the letter cannot waive the responsibility of presenting the appropriate and correct information in the business plan. Therefore, John and his accounting firm both are liable for representing negligent misstatement. Further, the misstated business plan was also presented to the Southpac Bank based on which the bank approved the loan to Fred. Therefore, John is directly liable to the Southpac bank whereas Abacus and Associates is indirectly liable to the bank being a superior respondent. On the contrary, Fred’s parents also provided loan amounted to $20,000 on the basis of the business development plan prepared by John and his firm. Although obtaining the loan from parents was not communicated to John, he is still indirectly liable to present negligent misstatement. Since the plan was made under the authority of John’s accounting firm Abacus and Associates, the firm is also indirectly liable to represent negligent misstatement and providing misleading information. Declaration of exclusion of liability in the letter does not waive off the responsibility of John and Abacus to provide correct and appropriate information of the business development plan.

 

Reference List

Barker, K., 2015. Negligent Misstatement in Australia-Resolving the Uncertain Legacy of Esanda. Ch, 13, pp.319-344.

Lasker, E.G., Klein, S.A. and Barago, T.F., 2015. Taking the Product out of Product Liability: Litigation Risks and Business Implications of Innovator and Co-Promoter Liability. Def. Counsel J., 82, p.295. 

Battistella, C., De Toni, A.F. and Pillon, R., 2015. The Extended Map methodology: Technology roadmapping for SMES clusters. Journal of Engineering and Technology Management, 38, pp.1-23.

Dudin, M.N., Kucuri, G.N., Fedorova, I.J.E., Dzusova, S.S. and Namitulina, A.Z., 2015. The innovative business model canvas in the system of effective budgeting. Asian Social Science, 11(7), pp.290-296.

Frank, M.J. and Colarusso, J.C., 2016. Vicarious Liability May Apply: TCPA-Compliant Text Message Advertising in Franchise Systems. Franchise Law Journal, 35(3), p.421.

Lai, W.H. and Lin, C.C., 2015. Constructing business incubation service capabilities for tenants at post-entrepreneurial phase. Journal of Business Research, 68(11), pp.2285-2289.

Li, K.X., Wang, Y., Tang, O. and Min, J., 2016. Disclosure in insurance law: a comparative analysis. European Journal of Law and Economics, 41(2), pp.349-369.

Robinson, G., 2015. Construction Law-Texas Supreme Court Shields Design Professionals from Economic Liability in Negligent Misrepresentation Suits.SMUL Rev., 68, p.299.

Stevenson, K., Rowbotham, J. and Lowther, J., 2015. Reparation for Betrayal of Trust in Child Sexual Abuse Cases: The Christian Duty of Care, Vicarious Liability and the Church of England. Australian Feminist Law Journal, 41(2), pp.253-270.

Tan, D., 2015. Internalising Externalities-An Enterprise Risk Approach to Vicarious Liability in the 21st Century. SAcLJ, 27, p.822.

Tyagi, S., Choudhary, A., Cai, X. and Yang, K., 2015. Value stream mapping to reduce the lead-time of a product development process. International Journal of Production Economics, 160, pp.202-212.

Winer, L., 2015. Adding Skill Development to Graduate Marketing: A Case History. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 284-288). Springer International Publishing.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2017). Business Commercial Transaction. Retrieved from https://myassignmenthelp.com/free-samples/business-commercial-transaction.

"Business Commercial Transaction." My Assignment Help, 2017, https://myassignmenthelp.com/free-samples/business-commercial-transaction.

My Assignment Help (2017) Business Commercial Transaction [Online]. Available from: https://myassignmenthelp.com/free-samples/business-commercial-transaction
[Accessed 03 April 2020].

My Assignment Help. 'Business Commercial Transaction' (My Assignment Help, 2017) <https://myassignmenthelp.com/free-samples/business-commercial-transaction> accessed 03 April 2020.

My Assignment Help. Business Commercial Transaction [Internet]. My Assignment Help. 2017 [cited 03 April 2020]. Available from: https://myassignmenthelp.com/free-samples/business-commercial-transaction.


MyAssignmenthelp.com delivers assignment help to millions of students of USA. We have in-house teams of assignment writers who are experts on wide ranges of subjects. We have appointed teams of native writers who provide assignment help to students in New York City and all over the USA. They are skilled assignment writers who successfully cater to search terms like do my assignment in the USA

Latest Management Samples

BO1BSRE301 Business Strategy Method

Download : 0 | Pages : 7

Answer: Introduction The purpose of the following report is to review a business case study of Mormor Magda’s ice cream and their performance in Swedish ice cream industry (Fundedbyme.com, 2019). As their business journey was not smooth and full of difficulties, this report will discuss organisational issues and try to provide recommendations to mitigate existing and future challenges. Overview of the case study Angela Hafstrom decide...

Read More arrow

MBA506 Negotiation Role Play And Summary For Negotiated Agreement

Download : 0 | Pages : 8

Answer: Stage 1: Pre-negotiation Client’s BATNA In simpler terms, the full form of BATNA is Best Alternative to a Negotiated Agreement. It is one of the most important tools, which are used by negotiators in order to handle the imbalances occurring during the negotiation of financial resources with the opposing party (Harvard University, 2012; Andrade et al., 2010; Kim & Fragale, 2005). Thus, the client’s BATNA is identi...

Read More arrow

CPCCBC5005A Select And Manage Building And Construction

Download : 0 | Pages : 3

Answer: In this project that is supposed to begin on the 13th January, 2019, I am going to use the layout below which will help me in the allocation and structuring of labour. It includes both the employees and subcontractors. Project Shedule Of Activities Below is the project schedule as it should be undertaken by both the contractors and the employees: ID Task Name Time 1  The total duration ...

Read More arrow

UUMG5200 Organisational Behaviour

Download : 0 | Pages : 17
  • Course Code: UUMG5200
  • University: UUNZ Institute Of Business
  • Country: New Zealand

Answer: Introduction Organizational behaviour is considered as the features and behaviour of employees to get interacted with each other in order to attain the common goals of the company. It has been found that organizational behaviour provides three main ways of understanding in the context of people as an organization, people as people and people as resources. A better understanding of organizational behaviour can facilitate manager of the...

Read More arrow

BSBMKG609 Development Of Marketing Strategies For Vision Statement

Download : 0 | Pages : 7
  • Course Code: BSBMKG609
  • University: APEX Institute Of Education
  • Country: Australia

Answer: Introduction  The paper is a combination of two tasks. First part includes a strategic report on Houzit and the second part includes a marketing plan of Houzit. Systematic structuring is followed in both tasks. Organizational Overview Strategic Directions And Organizational Objectives Vision Statement The vision statement of Houzit is- To be one of the national retail homeware brands, emphasizing on the various home makers&rsqu...

Read More arrow
Next
watch

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,241,609

Orders

4.9/5

Overall Rating

5,067

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 4/5

3076 Order Completed

99% Response Time

Emily Wei

Doctor of Philosophy (Ph.D) in Civil Engineering

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1265 Order Completed

97% Response Time

James Cook

Masters in Management

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1592 Order Completed

96% Response Time

Jane Sima

Ph.D in Psychology with Specialization in Industrial-Organizational Psychology

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

184 Order Completed

96% Response Time

Arapera Billing

Masters in Management, MMgt

Wellington, New Zealand

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Real quick. Writer gave my assignment so quickly...thanx for that. Love the recent reference of literature, dated only 2-3 years back! Haven\'t get result yet but feel like a good piece of writing.

flag

User Id: 331677 - 03 Apr 2020

Australia

student rating student rating student rating student rating student rating

got court my asst in misconduct but still, I want to Thanks for the team for responding for each message and also redoing the asset n having the changes as required by my tutor

flag

User Id: 307493 - 03 Apr 2020

Australia

student rating student rating student rating student rating student rating

Thanks for the team for responding for each message and also redoing the asset n having the changes as required by my tutor

flag

User Id: 307493 - 03 Apr 2020

Australia

student rating student rating student rating student rating student rating

Thanks for providing me the best solution and unique with good content and proper referencing style. I got 92% marks in this assignment. The professor was very glad and gave me very good remarks. Thanks

flag

User Id: 345833 - 03 Apr 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?