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

Concise Australian Commercial Law

tag 4 Downloads8 Pages / 1,794 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Using the Common Law of Agency, advice Paratol Ltd on their legal position?
 
 

Answer:

Issues

According to the scenario of the case, the Australian based pharmaceutical wholesaler PharmCo negotiated a distribution agreement with Paratol Ltd in the month of January 2015 in keeping with which Paratol was required to release a large stock of painkillers for distribution to PharmCo for a valuation of $2,00,000. The company was given a grace period of six months to pay off the amount. The major issue that was identified in the case was related with providing of guarantee letter from the asset manager in order to ensure that if default is made by PharmCo, liquidating its assets would amount to $2,00,000. The guarantee was signed by the Processing and Payment Department of Goldman Asset Management (GAM), which manages the complex finances of PharmCo. After it was received by Paratol Ltd, it commenced its delivery of stock to PharmaCo. However, PharmCo defaulted on the payment on December 2015 due to its insolvency and the company was found to be operating under huge loss since the past eight months. In this context, Paratol Ltd claimed its debts against GAM that did not accept the liability of paying off the same. It stated that the Guarantee and Valuation Department is responsible for signing the guarantee rather than the Processing and Payment Department. Furthermore, the manager also claimed that the document was signed by GAM for verifying the signature of PharmCo but not to ensure its liquidity and accept its guarantee. There was no such information mentioned in the guarantee document regarding the acceptability of guarantee that through which GAM would be held liable. In practice, the signature of the manager was for verifying the signature of PharmCo for limited purpose that was unknown by both the companies. 

 

Rules

Analyzing the case scenario, it is revealed that there is an applicability of common law of agency that will help in advising Patrol Ltd on their legal position. The law of agency completely deals with contractual, non-contractual and quasi-contractual fiduciary relationships involving an individual known as agent[1]. The individual is generally given the authority to take action on behalf of a party for the purpose of creating legal relationships with a third party. The law represents equal relationships between an agent and principal through which the principal implicitly or explicitly provides authorization to the agent to work on behalf of him/her[2]. The agents are required to negotiate with the third parties on the principal’s behalf for entering into a contractual relationship[3]. The common law of agency in Australia comes under Victorian Legislation and the Agents Act 2003[4]. The law further states that the liabilities and reciprocal rights between an agent and principal reflect legal and commercial realities. The law categorizes agents into three different classes that include universal agents, general agents and special agents. Universal agents possess the authority to perform on behalf of the principal and they may also have professional relationships or hold power of attorney[5]. General agents possess limited authority for conducting transactions for a continuous time period and finally the special agents possess the authority for conducting specified or single transaction over a limited time period[6]. There are various statutes formulated by the Australian government that generally regulate the activities of the agents and these include:

  • Auctioneers: Auction Sales Act 1958 (Victoria);
  • Estate agents: Estate Agents Act 1980 (Victoria);
  • Finance brokers: Consumer Credit (Victoria) Act 1995 (Victoria);
  • Travel agents: Travel Agents Act 1986 (Victoria);
  • Mercantile agents: Goods Act 1958 (Victoria); and
  • Insurance agents: Instruments Act 1958 (Victoria), Credit Act 1984 (Victoria)        

The law also demonstrates the liability of agents to the third parties and principal and the liability of principal to the agent. In context to liability of agent to third party, if the agent possesses apparent or actual authority, the agent will not be liable for the acts being performed within the authority’s scope until the disclosure of principal’s and agency’s identity[7]. In case the agency is partially disclosed or not disclosed at all, the principal and the agents both will be held liable. Similarly, with regard to the liability of agent to principal, if the actions of agent are without actual authority and the principal is bound because of possessing apparent authority, it is the liability of agent in indemnifying the principal for damage or loss occurred[8]. However, in context to the liability of principal to the agent, if the actions of the agent are within the range of provided authority, the agent must be indemnified by the principal for transactions made.       

The law of agency can be demonstrated with the help of a popular case, [Tooth v Laws (1888) 9 LR (NSW) 154]. According to the case, Laws (principal) held the position of hotel licensee who kept his name over the hotel door even though he did not possess any interest in the business. The agents who were conducting the business were supplied liquor by a third party, Tooth & Co. that took legal actions for the cost of liquor. As Tooth & Co. was not provided with the information that Laws was not conducing the business, he could not deny that the individuals who were conducting the business were acting as his agents. Thus, Laws was held liable for the particular action[9]. According to the law, the apparent authority may not be considered more important than the actual authority as at a majority of the circumstances the third party remains unaware of the agent’s actual authority. The similar incident can be demonstrated through the case of [Pacific Carriers Limited v BNP Paribas (2004) HCA 35] in which BNP Paribas was held responsible for the loss caused to Pacific Carriers Ltd due to arresting of their vessel for not providing relevant bills against the indemnity letters[10].  The Law of Agency also states that the agent possesses the authority to act for the principle only after having the actual authority to do so. This can be demonstrated through the case [Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480], in which Buckhurst Park Properties was held responsible for the damage caused to the opponent party[11]. The third parties are usually unaware of the agreements between the principle and the agent, thus they are also unaware of the agent’s actual authority that can be demonstrated through the case [Crabtree-Vickers Pty Ltd v Australian Direct mail Advertising and addressing co pty ltd][12].        

Application

Application of the above stated rules in relation to the particular case scenario would serve beneficial for Paratol Ltd as an effective advice on its legal position that will further help in resolving the identified issues. Applying the common law of agency in the case scenario, GAM would not be held responsible for the failure to repay the credit amount to Paratol Ltd rather PharmCo is liable to pay off its debts to the company. GAM signed the letter of guarantee at the authority of PharmCo in which the company was considered to possess enough liquid amounts to pay of the debts if any default is made. According to the Law of Agency Act, the agent is not held liable for performing any type of acts under the authority of the principal rather the principal would be held responsible for the act. The law is only applicable if the name of the principal and the agents both are disclosed to the third party. It is advisable to Paratol Ltd to claim the due amount from PharmCo even though it has become insolvent. The company may make use of the reserves or the personal savings/current accounts of the business partners of PharmCo in order to pay off the debt of Paratol Ltd. Furthermore, the manager of GAM also claimed that she did not sign the guarantee for ensuring the liquidity of the company rather the signature was for the verification of PharmCo’s signature. Paratol Ltd is thus advised to act legally against PharmCo to recover the debt amount that was due as a result of insolvency. A similar scenario can be found in the case of [Watteau v Fenwick [1893] 1 QB 346] in which the principal was held responsible for all the acts that were conducted by its agent as regards to  the third party involved in the agreement[13]. 

 

Conclusion           

From the overall case scenario, it is evident that the Paratol Ltd is advised to claim the credit amount of $2,000,000 from PharmaCo itself rather than considering GAM liable for the loss being suffered due to the insolvency of PharmaCo. GAM was the agent who was given the authority to act on behalf of PharmaCo and the law considers the principal as liable of any damages or defaults made in the contract. Thus, according to the law the agent is not responsible for any type damages caused to the third party of the contract if it is given complete authority by the principal company to act on its behalf. 

 

References

“Australia,” Fox Williams, Last modified June 10, 2016, 

Anson, William Reynell, Jack Beatson, Andrew S. Burrows, and John Cartwright. Anson's Law of Contract. United Kingdom: Oxford University Press, 2010.

Anyanwu, Chika. "Challenges to privacy law in the age of social media: An Australian perspective." Australian Journal of Communication 40, no. 3 (2013): 121.  

Barton, Charmian. "Status of the Precautionary Principle in Australia: Its Emergence in Legislation and as a Common Law Doctrine, The." Harv. Envtl. L. Rev. 22 (1998): 509.

Braithwaite, John, John Walker, and Peter Grabosky. "An enforcement taxonomy of regulatory agencies." Law & Policy 9, no. 3 (1987): 323-351.

Cheer, Ursula. "How the law attempts to deal with hoaxes and pranks in the media that lead to harm." Findlaw (2012): 21-48.

Donaldson, Lex, and James H. Davis. "Stewardship theory or agency theory: CEO governance and shareholder returns." Australian Journal of management 16, no. 1 (1991): 49-64.

Eisenberg, Melvin Aron. "The responsive model of contract law." Stanford Law Review (1984): 1107-1167.

“Freeman & Lockyer -V- Buckhurst Park Properties.” First Mag. Last modified June 23, 2016,

Granville, Johanna. "Dot. con: the dangers of cyber crime and a call for proactive solutions." 

Hawkins, Keith. Law as last resort: Prosecution decision-making in a regulatory agency. United States: Oxford University Press on Demand, 2002.

King Edward, V. I. I. "Prank call with tragic consequence." LAMP (2013): 31.

Mulheron, Rachael. The class action in common law legal systems: a comparative perspective. London: Bloomsbury Publishing, 2004.

Paul, Simone, Peter K. Smith, and Herbert H. Blumberg. "Investigating legal aspects of cyberbullying." Psicothema 24, no. 4 (2012): 640-645.

“Pacific Carriers v. BNP Paribas.” Clark, David Martin. Last modified June 23, 2016, 

Turner, Clive, John Trone, and Roger Gamble. Concise Australian Commercial Law 3rd edition. United States: Thomson Reuters, 2014.

Download Sample

Get 100% money back after download, simply upload your unique content* of similar no. of pages or more. We verify your content and once successfully verified 100% value credited to your wallet within 7 days.

Upload Unique Document

Document Under Evaluation

Get Credits into Your Wallet

*The content must not be available online or in our existing Database to qualify as unique.

Cite This Work

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

My Assignment Help. (2017). Concise Australian Commercial Law. Retrieved from https://myassignmenthelp.com/free-samples/concise-australian-commercial-law.

"Concise Australian Commercial Law." My Assignment Help, 2017, https://myassignmenthelp.com/free-samples/concise-australian-commercial-law.

My Assignment Help (2017) Concise Australian Commercial Law [Online]. Available from: https://myassignmenthelp.com/free-samples/concise-australian-commercial-law
[Accessed 12 July 2020].

My Assignment Help. 'Concise Australian Commercial Law' (My Assignment Help, 2017) <https://myassignmenthelp.com/free-samples/concise-australian-commercial-law> accessed 12 July 2020.

My Assignment Help. Concise Australian Commercial Law [Internet]. My Assignment Help. 2017 [cited 12 July 2020]. Available from: https://myassignmenthelp.com/free-samples/concise-australian-commercial-law.


With time, MyAssignmenthelp.com has become one of the best college essay writing services. Our all rounded services give students the confidence to overcome assignment related issues. Our services are fast enough to meet most urgent deadlines. We are capable of delivering fast essay writing services with the help of our specially designed provisions and writers' teams. Our urgent essay help services guarantee most rapid delivery of assignment solutions. Some of our most popular essay services are application essay help, exploratory essay help, literary review essay help and argumentative essay help.

Latest Business Law Samples

LAW101 Fundamentals Of Law

Download : 0 | Pages : 4

Answer: Negligence Issue:The issue that gave rise to this particular discussion is whether Stan has any rights to file a suit against Wendy for his own physical injury? Rule: Negligence is an act on part of an individual who tries to neglect his/ her duty of care that causes injury to another be it in physical form, mental or even economic. Negligence is deemed to be an act of carelessness on part of an individual that causes harm to an...

Read More arrow Tags: Australia 8 Fundamentals of Law Sttots College 

U50032 Coursework Assessment Information

Download : 0 | Pages : 7
  • Course Code: U50032
  • University: University Of Technology Sydney
  • Country: Australia

Answer: Introduction The company Carillon has been in news  because of its corporate failings. The purpose of this paper is to analyze the situation of Carillion which has been subjected to corporate failing in the light of directors’ duties and insolvency law in UK. The paper also provides the steps which stakeholders and shareholders of Carillion may have taken against the directors for their actions under company law. ...

Read More arrow

AB444A12 Programme: BTEC Higher National Diploma

Download : 0 | Pages : 20
  • Course Code: BUSN20016
  • University: CQ University
  • Country: Australia

Answer: Introduction: In the following report, an effort has been made to chalk out the tax environment of the UK. In pursuance of that the roles and responsibilities of the tax practitioners, the details of the documents required for the purpose of calculation and other matters like the capital gain tax and calculation of adjusted taxable profit have been properly discussed. TASK 1: The responsibility of the tax collection has been vested ...

Read More arrow

HI6027 Business And Corporate Law 5

Download : 0 | Pages : 6

Answers: 1 A sole trader is considered as an individual or any entity who practices a business alone. It is measured as the easiest method of occupation and the inexpensive procedure of the commerce where other than the sole trader no other person or entity shall be obligated for the profits incurred and the losses in the business. A Company is mentioned  as any body or organization that is devouring a separate individuality separately f...

Read More arrow Tags: Australia Rozelle 8 business and corporations law Holmes Institute 

HA2022 Business Law 4

Download : 0 | Pages : 7

Answer: 1: The national sporting organizations in the territory have maintained various rules or laws to maintain their organization. There are several sporting organizations such as the Australian Football League, National Rugby League and many others. The Directory of the Sports of Australia has restricted the particulars of these organizations, in addition to it is recognized the people of the organizations who are concerned in the improve...

Read More arrow Tags: Australia 8 business law Holmes Institute 
Next
watch

Save Time & improve Grade

Just share Requriment and get customize Solution.

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

1,360,163

Orders

4.9/5

Overall Rating

5,081

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 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

453 Order Completed

98% Response Time

Howard Asuncion

LLM in Criminal Law

London, United Kingdom

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

248 Order Completed

100% Response Time

Lloyd Bernabe

MSc in Accounting

London, United Kingdom

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

798 Order Completed

97% Response Time

Benjamin Blakeman

MSc in Medical Technology

London, United Kingdom

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

good it was perfect clear answer just what i need for ode thank you so much!! clear and in steps

flag

User Id: 304633 - 12 Jul 2020

Australia

student rating student rating student rating student rating student rating

The current help needs to improve on his English writing. While the coach was helpful in providing the content, I had to rework the context of whole paper to make it readable for the level of output expected. But overall it was helpful since I don't ...

flag

User Id: 223122 - 12 Jul 2020

Australia

student rating student rating student rating student rating student rating

Work is perfectly written, though not graded yet but I’m being optimistic that a good grade will be awarded.

flag

User Id: 369420 - 12 Jul 2020

Australia

student rating student rating student rating student rating student rating

It was well written and I\'m 100% satisfied. The expert knew exactly what to do and finished well above my expectations.

flag

User Id: 332269 - 12 Jul 2020

Australia

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