Fundamental Concepts Of Contract Law, Tort Law, And Business Structures Essay. (70 Characters)

Question 1

Question 1
Mark is the owner of a distinctive and expensive mountain bike. Mark agrees to sell the bike to his friend Jane for $5000. Jane pays Mark in case for the bike, however, Mark keeps possession of the bike in order to make some repairs and touch up the paint work. Mark sends the bike to the bike shop to be fixed. Whilst the bike is at the shop, Stan offers Mark $6000 for the bike. Mark agrees to sell the bike to Stan and rings to the bike shop to tell them to release the bike to Stan when he comes to the shop. Stan tells Mark that he will pay the bike shop bill and gives him $6000 in cash. Stan picks up the bike. When Jane comes to collect the bike, Mark gives her the $5000 back and tells her that he has changed his mind.

Advise Jane of her rights under contract law against Mark

Question 2

Aurelie is a successful ballerina but a promising career has been cut short by a serious injury to her right knee. She has torn the anterior cruciate ligament in this knee and requires surgery. She attends the Glades Private Hospital for the surgery to be performed by Dr Stephens. Before being taken to the operating room Aurelie is given a pre-med to relax her. As she is waiting to go into the operating room a nurse checks her details. She is asked which knee is being operated on and in her ‘relaxed’ state points to her left knee. The nurse places a cross on this knee with a coloured pen. Dr Stephens operates on Aurelie’s left knee and finds a perfectly intact cruciate ligament. He then operates on and repairs Aurelie’s right knee. When she awakes she is horrified to find that she cannot move either leg. Discuss whether Aurelie has an action against wither the Doctor or the Hospital.

Question 3
Michael, Sujan, and Karamjit (‘the three friends’) have decided to start a business when they finished their degrees in Human Movement at the end of the year. They are unsure as to what form of business entity they should use. Their fellow students have told them about sole traders, partnerships and companies but the three friends are confused and have come to you for advice.

Michael is quite wealthy, and his major concern is that he is not left with the debts of the business if it fails.

Sujan is happy to take risks, but Karamjit is ‘risk adverse’ (ie does not like taking risks).

All three agree that:

they want a form of business structure that will enable them to sell quickly and cleanly if the business succeeds and they want to sell, and

they should choose a business structure that will them to raise capital easily in the event the business is successful and they want it to expand.

Required: Having regard to the characteristics of the three friends referred to in items (1) to (3) above, advise the three friends on what form of business entity they might utilize for their prospective business. Explain why you make your recommendation. Explain too why you did not recommend the other two forms of business entity.

Question 4
Arabella purchases the Super Mixer, which she saw advertised on television. The advertisement promised customers a mixer capable of preparing twice the average cake mix in one go. Upon taking delivery of the Super Mixer, Arbella discovers that it lacks the power referred to in the advertising. In reality, the Super Mixer is no faster than Arabella’s conventional mixer and more complex to use and clean.

Advise Arabella on her rights and potential remedies under the ACL. 

Issue

What are the rights of Jane under contract law?

The principles of the contract have been based on the Common Law in Australia. Five essential elements are necessary that are required for a legally binding contract that firstly there must be an agreement between the parties. Secondly, there must be a consideration between the parties. Thirdly, there must be proposal and acceptance between the parties. Fourthly, There must be a consent between the parties. Fifthly, the capacity of parties to enter into the legal relations, for example, the party must have a sound mind and has attained the legal age. The intention is required that the parties are required to enter into the legal relations. There is required to be certain for example the contract has to be complete, clear, certain and binding. In Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 (1 September 1982) case, it has been held by the Court that when the consideration has been taken by the parties that means the contract has been made between the parties. The defendant has been held liable for the breach of the contract. The defendant will be liable on the breach of contract to pay the damages to the other party (Law, 2018).

The facts of the case:

• Mark agrees to sell the bike to his friend Jane
• Jane has paid the amount to Mark for the bike
• The possession was with mark for some repair works and denting and painting
• Stan than offered to buy his bike
• Mark sold his bike to Stan for the amount and was told to Jane that he has changed his mind

It has been applied from the rule that mark has taken the amount from the Jane that means that the essential of the contract has been fulfilled of a contract. The other elements such as consent were there between Mark and Jane. Both the parties are in a capacity to bind in a contract. It is the agreement between the parties. The intention has been there of both the parties to create a contract. All the essentials of the contract have been fulfilled between Mark and Jane. Mark after making an agreement has sold the bike to another party that means Mark has breached the contract. In breach of contract, Jane has the right to demand the damages as established in the case Shevill v Builders Licensing Board. Mark is liable to pay the damages to Jane.

It has been analyzed that Mark has breached the terms of the contract. He has taken the consideration from the Jane and then sold the property to many people. Mark has breached the contract and he has been liable to pay the damages to Jane.

Can Aurelie take action against the doctor or the hospital?

Question 2

Under Tort Law, many of the relationships have been defined where a person owe duty of care in respect to others. One of such relationship is of a doctor and a patient. This relationship is of a fiduciary nature. Being of a professional position it becomes the responsibility of a doctor to act in a fair and responsible manner while dealing with the patient. Negligence is an important term of a Tort Law. It is defined as a situation where a person fails to act similar to a reasonable person or may say act in a negligent manner. For a valid claim under negligence, some condition needs to be satisfied, which are mentioned as below:-

• There must be a duty of care.
• Defendant must breach such duty.
• Cause of aforesaid breach, a loss must occur to plaintiff.
• There must be a direct relation between the act of negligence and loss of the plaintiff.

In the field of medical, the case of Rogers V Whitaker (1992)[1992] HCA 58; 175 CLR 479, is an important one to study. In this case, it has been given that a medical practitioner owes a duty of care in respect to patients. As patient trust on their doctors, it becomes responsibility of doctors to act in the best interest of the patients or else they can be held for negligence under Tort Law.

Vicarious liability is another concept, which states that an employer is always liable for the torts of it is employees. However, the employer is not responsible in those conditions where an employee act outside of his/her granted powers (Steele, 2017). While discussing the various aspects of tort law, mention is also required of contributory negligence. It is a situation where along with the defendant plaintiff also failed to take care of himself/herself and contribute to the negligence (Ca.practicallaw.thomsonreuters.com, 2018). The existence of contributory negligence reduces the amount of damages.

In the given case, Aurelie was patient who had a serious injury in her right knee. Further, she visited Glades Private Hospital for the treatment of her injury. Before the operation, the hospital provided her a pre-med in order to relax her for the operation. When a nurse came to visit her, she asked for some details from Aurelie. By the discussion held between Aurelie and nurse, the nurse misunderstood the details and marked a cross on the left knee of Aurelie. This mark was a sign that left knee is required to be operated. Dr. Stephens operated her left know first and thereafter treated her right knee, which was actually injured. Here, to state that doctor has acted negligently. Applying the decision of the case of Rogers V Whitaker, the doctor was required to act in a responsible manner. Further all the necessary conditions for the successful claim under negligence are also satisfied.

Question 3

Firstly, doctor owed a duty of care in respect to  Aurelie. Secondly the same breach the duty and failed to act as a reasonable person. Aurelie suffered with a loss in the form of physical injury as she was not able to move. At last the only reason behind this was the negligence of doctor as he was required to operate only right knee. Further applying the provisions of vicarious liability, the hospital will also be held responsible for the negligence of it is employees i.e. doctor and nurse.

At last, contributory negligence cannot be applicable here as in this case, nurse and doctors are expected to be an expert. Because of health situation of Aurelie she was not expected to guide them.

It can say that Doctor and the hospital have the duty of care towards the Aurelia and both of them will be held liable to provide damages to her.

It is required for Michael, Sujan and karamjit too know the advantages and disadvantages of the three of business structure:

• The company has its separate legal identity
• The identity of companies is different from its shareholders
• The company have the right to sue someone on the breach of any laws and can also be sued
• The liability of owners or shareholders is limited to the extent of shares in the company(El-Sayed, 2014)

• The cost of incorporation of the company is costly than the other forms of business structure
• The financial details of the company have to do open every year in public
• The process of dissolving the company is complex
• The legal requirements are complex
• In some cases, the directors are also been held liable for not meeting the company's debts (Form A Company, 2018)

• It is easy to establish and the cost to start-up is less than the company
• The capital is more available for the business
• It has a greater borrowing capacity
• High calibre employees have been made partners (Young, 2018)

• The liability of the partners for the debts of the business is unlimited
• Every partner will be liable for the company's debts
• There is a risk of disagreements and friction among partners and management
• each of the partners is an agent and liable for the other partners

• A sole proprietorship is functional and tax advantages in comparison with the other business
• It is easy to setup than other forms of business
• The owner has the full control over the business
• The sole owner is the beneficiary of all the benefits

• The disadvantage of the sole proprietorship is that all liability will occur on solely
• The owner will be liable personally for all the debts
• It can only have one owner that also the disadvantage of the sole proprietorship

It has been recommended to three of friends that they must form a company that can help to raise capital and to expands their business. The liability is limited in the company and it is easy to sell if succeeds. However, the company is difficult to wind up but can be sold with the clean methods.

Does Arabella have rights and potential remedies under the ACL?

The business in Australia has to comply with the guidelines that have been issued by the Australia Consumer Law in the schedule 2 of Competition and Consumer Act, 2010 (CCA) it has been enacted by the parliament of Australia. This Act initiates on the various prohibitions on the misleading and false advertisements. In this Act states that the liability will occur on the organization in accordance with section 29 to issue false advertisements on the advertisements to the public in which they have made the deceptive and false remarks (Mladenow, Novak, and Strauss, 2015). This Act has been enacted with the objective to protect the consumers from misleading advertisements and to prevent from making false information in regard to the product specifications. The market has been highly affect by attracting the customers with the misleading information. In ACCC v H.J. Heinz Company Australia Limited [2018] FCA 360 (19 March 2018) case, the company has been found guilty by the court on providing misleading information to the customer. The company has been held liable to pay the damages to the customer which she has been taken place due to the product (Oscario, Sriherlambang, and Akbar, 2017).

The facts of the case:

• Super Mixer has been purchased by Arabella that she has seen in the advertisement
• The advertisement showed that it has a double capacity of the mixer to prepare the average cake in one go
• Arabella discovers that it lacks what it is shown in the advertisement
• In reality, the Super Mixer is not faster as it showed in the advertisement but also little complex to use and clean

It can be analyzed from the facts that the company has given misleading information to the customer Arabella and as per rule of Australia consumer Law schedule 2 that protects the rights of the customer from to being breach. According to the act it has been prohibited to issue false and misleading advertisements. The company, therefore, had been held liable to pay the damages. Arabella has the remedy to claim damages from the company as established in the case ACCC v H.J. Heinz Company Australia Limited [2018] FCA 360 (19 March 2018)

Conclusion

It can be concluded that the company has been liable to pay the damages to Arabella in accordance with the Australian Consumer Law.

References

ACCC v H.J. Heinz Company Australia Limited [2018] FCA 360 (19 March 2018)

Ca.practicallaw.thomsonreuters.com. (2018). Contributory negligence. [online] Available from: https://ca.practicallaw.thomsonreuters.com/3-107-[Accessed on 08/12/2018]

Competition and Consumer Act, 2010 (CCA)

El-Sayed, M.A., (2014) Advantages of the incorporation of 2-hydroxyl propyl beta cyclodextrin and calixarene as ionophores in potentiometric ion-selective electrodes for rivastigmine with a kinetic study of its alkaline degradation. Sensors and Actuators B: Chemical, 190, pp.101-110.

Form A Company. (2018) Step by Step Guide to Starting a Business in Ireland. [online] Available from: https://www.formacompany.ie/en/company-formations/ireland-step-by-step-guide.php [Accessed on 08/12/2018]

Law, S. (2018) The Transformation of Consumer Law in Times of Crisis: The Ex Officio Control of Unfair Contract Terms. In Transformation of Civil Justice (pp. 283-307). Australia: Springer

Mladenow, A., Novak, N.M. and Strauss, (2015) Online ad-fraud in search engine advertising campaigns. In Information and Communication Technology (pp. 109-118). Australia: Springer

Oscario, A., Sriherlambang, B. and Akbar, A. (2017) Building a Positive Brand Image Through Advertisement. Advanced Science Letters, 23(1), pp.207-210.

Rogers V Whitaker (1992)[1992] HCA 58; 175 CLR 479

Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 (1 September 1982)

Steele, J. (2017). Tort Law: Text, Cases, and Materials. UK: Oxford University Press.

Young, C.S.R. (2018) Conference keynote: Subject to Contract: Law as an Artistic Medium. Keynote given at'Art in Law in Art'international conference, Perth : University of Western Australia,.