Get Instant Help From 5000+ Experts For
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
myassignmenthelp.com
loader
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
wave

Scenario One: Sale of a Painting

1. Vera is a well- known painter of landscape scenes of high artistic merit. She wishes to sell her latest painting which she called “Dawn “. She considers this to be her best painting in the previous 10 years. She asked Siddo to sell the painting for her for $40,000. She told him that she was prepared to accept less than $40,000 for a quick sale but under no circumstances sell it for less than $32,000 without her written approval.

Assume the following alternative circumstances:

a. Siddo sold the painting to Queenie for $20,000. 


b. Siddo bought the painting for himself for $32,000. He later sold it for $38,000 to Elly, a friend of his. 


c. Siddo sold the painting to Isobel for $32,000. Isobel loves Vera’s paintings and considered that she was getting a bargain at $32,000. She was overjoyed with her purchase and said to Siddo: “I am so pleased that you gave me this opportunity to buy
such a beautiful painting that I am giving you $3000 for yourself”. She then gave him $3000. 

You are required to:

Discuss the legal position of the parties in each of the above separate circumstances.


Refer to relevant legal authority in support of your answer.

2. Joan is an intelligent 17-year-old who came to Australia a few years ago. With the help of friends she bought a small courier business and with great skill she has operated and increased the profits of the business. She needed a new car for her personal pleasure as well as for occasional use when her delivery van, which she needed for her courier business, is in
for repair or servicing. That happens about three months out of each year. 

She went to Frank’s Used Cars Pty Ltd in Sydney and discussed with the owner, Frank, cars that may be suitable for her needs. She decided to buy a second-hand Swift sedan for $49,000 and paid $4,000 deposit. Frank agreed to provide the balance of the purchase price through a loan from his company. Frank told her that the car would give worry-free service for at least twelve months without the need for major repairs.


An agreement was signed which provided that Joan would repay the price to the company over twelve equal consecutive monthly instalments, with an interest component included at a rate of 25%. Frank required security for the repayment of the loan and interest and asked for a guarantee of the contractual obligations from Joan’s parents, Karl and Maria, who arrived from Poland 12 months ago to join their daughter. Karl is a lecturer in biology at a large university and has a good knowledge of English. Maria is intelligent but has little education and can barely read or write speak English.


Joan told her parents that the amount of finance was only $25,000 and that the loan repayments will not extend beyond 3 months. She said that she can then repay everything because the bank has agreed to provide her with finance in 3 months’ time. In fact, she had not approached any bank for a loan. Frank knows of this conversation but does not know about the level of knowledge of English of either parent, nor that are the parents close to divorce. Karl and Maria signed the guarantee in Frank’s office and were given a copy of the guarantee for their records.


Six months after the purchase the car needed major repairs. Joan stopped payments under the agreement. Frank sent a letter to Karl and Maria and threatened that unless they paid all instalments within 7 days he would sue Joan and them for the whole debt.
You are required to:


Advise Joan, Karl and Maria of their legal position regarding their possible rights and liabilities.


You are not required to discuss the National Consumer Credit Legislation (V&L 24.1) nor any Act of Parliament that relates specifically to motor dealers (see V&L 22.140).


Do not discuss Karl and Maria’s possible rights/actions against Joan.


Assume all relevant events take place in New South Wales.

Scenario One: Sale of a Painting

1. Case facts: Vera is the famous painter, and she painted various landscape scenes which are of high artistic merit. She recently painted one more landscape scene and named it Dawn. This painting is considered one of the best paintings of the Vera.

Later, Vera appointed Siddo as an agent for the purpose of selling her painting. She expects $40000 sale price for her painting, and instruct Siddo not to sell the painting for less than $32000, without taken written approval from her.

a. Issue: painting is sold by Siddo to Queenie for $20000 only?

Law: Law imposed number of duties on agents, and agent owned these duties not only towards the principle but towards third party also. There is fiduciary relationship between agent and principle, breach of duty can be considered as breach of trust. Some of the duties of agent are stated below:

  • Agent is under obligation to follow the instructions given by principle and also the terms related to his authority. In other words, agent must not act out of the scope of his authority. However, if any specific instructions are given to agent by principle, then agent must follow those instructions. In case agent fails to follow the instructions given by the principle then it is considered as breach of duty.
  • Agents are under obligation to perform their work with reasonable care and skills. I case law Mitor Investments Pty Ltd v General Accident Fire and Life Assurance Corp Ltd and Australian Insurance Brokers (WA) Pty Ltd [1984] WAR 365. In this case, insurance brokers were appointed by the owner of the hotel. Owner appointed insurance brokers for the purpose of insuring the hotel against damaged caused by storm, tempest and flood. Broker after receiving instructions from the owner of the hotel, conduct insurance with General Accident Fire and Life Assurance Corp Ltd. Insurance was taken by brokers against the flood, but insurance policy did not include damage caused by sea.

Hotel was damaged because of cyclone and owner file claim against the insurance company. Claim made by owner was failed because policy does not include damage caused by sea. Later, owner of the hole sue insurance brokers for failed to follow the instructions given by the owner and also for negligence (Rasmuson, 2001).

It must be noted that principle is also liable for the acts done by agent, and some of these liabilities are stated below:

  • Principle is under obligation towards the third party to fulfill the promise made by the agent.
  • If agent fails to act within the scope of his/her authority then principle is liable towards the third party, but this liability arises only when agent act in the ordinary course of agency.

However, principle has right to sue agent for damages in case agent fails to follow the instructions given by principle, act with due care and skill.

There is general rule that agents are not liable towards the third party, but this general rule has some exceptions also. As per this exception if agent acts out of the scope of their authority or act as they were principle then in such case agents are also liable towards the third party (Us Legal, n.d.). 

Application: presently, Vera gives instruction to Siddo to not sell her painting for less than $32000 without her written approval. Siddo fails to follow the instructions given by Vera and sell the painting for $20000 to Queenie. Siddo is under obligation to perform his functions as per the instructions given by Vera and with due care, but Siddo fails to fulfill his obligations. Therefore Siddo is liable towards both Queenie and Vera.

Conclusion: In this case, Siddo is liable towards both Queenie and Vera and following are the remedies which are available to the parties:

Vera can claim damages against siddo for fails to perform his duty with due care and skill, and also for not following the mandatory instructions of principle.

Scenario Two: Sale of a Car with a Loan and a Guarantee

Both siddo and Vera are liable towards the Queenie, and Vera is bound to sell the painting to Queenie for $20000.

b. Issue: Siddo purchased painting from Vera for $32000 and sell the same to Elly for $38000?

Law: there is fiduciary relationship between agent and principle, and both own fiduciary duty towards each other.  In case Hospital Products Ltd v United States Surgical Corporation (1984–85) 156 CLR 41, Court held that number of cases are there which highlight the fiduciary relationship between specific classes of people, and these peoples are fiduciary responsible towards each other. This can be understood through example, principle and agent, doctor and patient, etc.

It must be noted that, agents are liable to act in good faith and in the best interest of their principle. However, it is the duty of agent not to make any secret profit in the ordinary course of agency.

It must be noted that agent are not liable only towards the principle, but law imposed various obligations on agent towards the third party also. One of those obligations is warranty related to authority, and as per this warranty when agent perform their actions on behalf of the principle then they provide implied warranty to the third party that they have authority to act in particular matter.

In case such authority is not given by the principle to the agent, then third party can sue the agent for breach of warranty. However, third party can only sue agent under this issue and not the principle. Third party has no right to sue the agent under this issue if they already had information related to lack of authority (McCarthy, 2004).

Principle is liable towards the third party in following situations:

  • Vicarious liability. This can be understood through case law Sweeney v Boylan Nominees Pty Ltd t/as Quirks Refrigeration (2006) 226 CLR 166. In this case, Court stated that if employee commit any civil wrong then employer is also vicariously liable for the acts of the employee.
  • If agent commit any tort while acting as an agent, then principle is liable for such tort.

Principle can sue agent also for breach of fiduciary duty and following rights are available to principle:

  • Principle can claim for amount of profit which is secretly made by the agent in the ordinary course of agency.
  • Principle can refuse the agent’s claim related to commission and indemnity against the liability, if agent acted against as the principle them and not as an agent (Pant, 2001).

Application: in the present case, siddo purchased painting from Vera for $32000 and sell that panting to Elly for $38000. In this Siddo share fiduciary relationship with Vera, and he breaches his fiduciary duty by making secret profits. Siddo make as secret profit of $6000 by selling the painting of Vera.

However, Siddo also breach warranty related to authority towards the Elly by acting that he has authority to sell the painting for $38000.

Conclusion: siddo breach fiduciary duty own towards the Vera, and warranty related to authority, and following remedies are available to the parties:

Vera has right to claim $ 6000, that is the amount of secret profit made by Siddo by selling the painting of Vera to Elly, and she also has right to refuse the claim made by Siddo related to commission and indemnity.

Elly can claim for damages, because Siddo breach warranty related to Authority by acting out of the scope of his authority.

c. Issue: Isobel purchased painting made by Vera from Siddo for $32000, and she is extremely happy from this purchase. She believes that she purchased the painting in discount, and because of this belief she gave extra $3000 to Siddo for himself?

Law: if third party gives any amount to the agent then such amount is considered as consideration or commission. In case any consideration or other valuable thing is received by the agent from the third party without the knowledge of the principle then agent is liable towards the principle for:

  • Civil wrong
  • Under both State and Commonwealth legislation.

Principle has right to refuse the agent’s claim related to commission and indemnity against the liability, if agent acted against as the principle them and not as an agent (BP, 2007).

Application: in the present case, Isobel belief that she gets the painting in discount and under this belief paid extra $3000 to Siddo. This amount can be considered as commission, and it is not in the knowledge of Vera. Therefore, Siddo is liable towards the Vera under Civil wrong.

Conclusion: in this case, secret commission of $3000 is made by the Siddo from Isobel, and this commission is not in the knowledge of Vera. Therefore, Siddo is liable towards Vera under civil wrong and Vera can refuse the claim made by Siddo related to compensation and indemnity.

2. Case facts: Joan purchased car for her business from Frank’s Used Cars Pty Ltd, and before purchasing the car she explain all her requirements to the Frank. She purchased second-hand Swift sedan for $49,000, and paid $4000 as deposit amount. For further amount she requested loan from the Frank’s company.

Before purchasing the statement, frank made clear statement to Joan that company will give 12 months services for car and no major repairs is demanded by the car.

For the purpose of given security for the loan, Joan approached her parents that is Karl and Maria. Joan’s parents joined her 12 months ago in Poland. Karl has good language of English but Maria does not have any knowledge related to English language.

Joan told her parents that amount of loan is only $25000, and time period of loan will not extend beyond 3 months. She further stated that for repaying the loan she contacted with bank, and bank is agreed to provide her finance within the period of 3 months. In reality, she did not contacted with any bank for providing finance. Frank was completely aware about the conversation held between Joan and her parents. Karl and Maria agreed to provide guarantee, and copy of guarantee is given to them.

After the period of 6 months, car needs major repair and Joan fails to make payment as per the contract. Frank send warning letter to Karl and Maria.

Issue: legal position of Joan in this case?

Law: rights and obligations of party are determined through terms of the contract, and these terms can be considered as essential feature of the contract. There are two forms of the terms that are warranty and condition. Whether term is warranty or condition, it is determined through intention of the parties at the time of making the contract. This can be understood through case law Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd (1938) (SR) (NSW) 632. Court stated that, for the purpose of determining whether term is condition or warranty, Court consider the whole contract. Court also consider the importance of the term which means if promise is of such important nature that promisee would not enter into the contract without such promise then such terms was considered as condition.

Condition is the term which directly relates with the root of the contract, and if party fails to perform this condition then it results in cancellation of the contract. However, warranty is the term which is not directly relates with the roots of the contract. In other words, warranties are subsequent to the principle terms of the contract.

It must be noted that warranties are less important in comparison of conditions, and breach of warranties can only right to claim for damages (ACL, n.d.).

Application: in this case, frank made statement to the Joan that car does not demand major repairs in next 12 months, and on the basis of this statement Joan purchased the car from Frank. Therefore, this statement can be considered as condition of the contract. In next 6months from the date of purchase, car demands major repair which can be considered as breach of condition. Therefore, Joan has right to claim for damages or terminate the contract, or both.

Conclusion: in this case, there is breach of condition and Joan has right to claim for damages or terminate the contract, or both.

Issue: legal rights available to frank in this case? 

Law: in case breach of contract is of repudiator or anticipatory in nature, such breach can be considered as discharge of contract. However, it is necessary for discharge the contract by breach that breach must be of serious nature. In case of discharge of contract by breach, innocent party can cancel the contract.

Repudiatory breach is considered as breach, when party of the contract is not willing to perform the obligations of the contract, and they show their willingness for not performing the contract by their express or implied conduct. For the purpose of determining whether occurrence of repudiation was objective in nature, test was introduced by the Court (ACL, n.d.).

It must be noted that, right to terminate the contract is only exercised by the innocent party when they established that breach is of serious nature, and in case breach is not of serious nature then party have no right to terminate the contract and party can only claim for damages. Therefore, it is clear that seriousness of breach gives right to innocent party to terminate the contract. DTR Nominees v Mona Homes (1978) 19 ALR 223 and Hong Kong Fir Shipping v Kawasaki [1962] 1 All ER 474 was the case in which Court states that innocent party also has option to continue the contract rather than terminating the contract, if beneficial obligations under the contract was continued.

Application: in the present case, Joan fails to pay the installments of loan and amount of interest, and this can be considered as serious breach of the obligation. Therefore, it can be considered as breach as breach of contract by repudiation.

Conclusion: Frank has right to terminate the contract because breach of obligation is of serious nature.

Issue: what are the legal rights of Karl and Maria in this case?

Law: undue influence is occurred when any transaction take place between the parties in which there is equality of power, and it results in contract between the weaker party and dominant party. It is necessary for applicability of this doctrine that dominant party affects the consent of the weaker party. Consent of the weaker party is unduly influenced by the dominant party.   

Undue influence includes the state when weaker party trusts the dominant party or depends on dominant party. Some special relations are there in which undue influence can be present such as parent and child; solicitor and client, etc. in this burden of proof is on the dominant party.

Application: in this case, Joan’s parents sign the contract because they trust their daughter, and in this undue influence are present because relationship of parent and child exists in this case. Joan wrongly influenced her parents and also makes false representation.

Frank is also liable in this case, because he fails to provide independent legal assistance to Joan’s parents and include in unconscionable conduct.

Conclusion: Karl and Maria can terminate the contract on this basis.

References:

ACL. Performance and termination. Viewed at:  https://www.australiancontractlaw.com/law/termination.html. Accessed on 9th September 2017.

ACL. Terms of Contract. Viewed at: https://www.australiancontractlaw.com/law/scope-terms.html. Accessed on 9th September 2017.

ACL. Undue Influence. Viewed at: https://www.australiancontractlaw.com/law/avoidance-undue.html. Accessed on 9th September 2017.

BP, (2007). Secret Commissions - misleading & deceptive and possibly a crime. Viewed at:  https://www.bartier.com.au/insights/pssst-secret-commissions-misleading-deceptive-and-possibly-a-crime/. Accessed on 9th September 2017.

DTR Nominees v Mona Homes (1978) 19 ALR 223 and Hong Kong Fir Shipping v Kawasaki [1962] 1 All ER 474.

G E Dal Pont, Law of Agency (Butterworths, 2001).

Hospital Products Ltd v United States Surgical Corporation (1984–85) 156 CLR 41.

McCarthy, L. (2004). Vicarious Liability In The Agency Context. Queensland University of Technology.

Mitor Investments Pty Ltd v General Accident Fire and Life Assurance Corp Ltd and Australian Insurance Brokers (WA) Pty Ltd [1984] WAR 365.

Rasmusen, E. (2001). Agency Law And Contract Formation. Viewed at:  https://www.law.harvard.edu/programs/olin_center/papers/pdf/323.pdf. Accessed on 9th September 2017.

Sweeney v Boylan Nominees Pty Ltd t/as Quirks Refrigeration (2006) 226 CLR 166.

Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd (1938) (SR) (NSW) 632.

US Legal. Rights, Duties, And Liabilities Between Principal And Third Parties. Viewed at:  https://agency.uslegal.com/rights-duties-and-liabilities-between-principal-and-third-parties/. Accessed on 9th September 2017.

Cite This Work

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

My Assignment Help. (2021). Legal Analysis Of Two Case Scenarios: Essay.. Retrieved from https://myassignmenthelp.com/free-samples/law00720-legal-studies/franks-used-cars-pty-ltd.html.

"Legal Analysis Of Two Case Scenarios: Essay.." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/law00720-legal-studies/franks-used-cars-pty-ltd.html.

My Assignment Help (2021) Legal Analysis Of Two Case Scenarios: Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/law00720-legal-studies/franks-used-cars-pty-ltd.html
[Accessed 29 March 2024].

My Assignment Help. 'Legal Analysis Of Two Case Scenarios: Essay.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/law00720-legal-studies/franks-used-cars-pty-ltd.html> accessed 29 March 2024.

My Assignment Help. Legal Analysis Of Two Case Scenarios: Essay. [Internet]. My Assignment Help. 2021 [cited 29 March 2024]. Available from: https://myassignmenthelp.com/free-samples/law00720-legal-studies/franks-used-cars-pty-ltd.html.

Get instant help from 5000+ experts for
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing: Proofread your work by experts and improve grade at Lowest cost

loader
250 words
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Plagiarism checker
Verify originality of an essay
essay
Generate unique essays in a jiffy
Plagiarism checker
Cite sources with ease
support
Whatsapp
callback
sales
sales chat
Whatsapp
callback
sales chat
close