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Joint liability for unpaid invoices

1 Billy and Sasha decide to go into business together following the completion of their studies at university. After extensive market research they write up a business plan for an online florist to be named Fusion Flowers. 


Sasha has recently inherited $50,000.00 which she car..es as startup capital. Billy doesn't have any savings but contributes his van, Mob and other equipment. They agree to lease a small warehouse space from which to operate the business. 
The pair agree that Sasha will pick up the flowers each day from the Flemington Markets while Billy will manage all customer enquiries and both will undertake deliveries. Profits will be split 50:50. 


After the first two weeks of operations, they are struggling to keep up with the orders and decide to hire Jacob to take care of deliveries. 


Over the nerd month the following events unfold: 
- Without asking Billy, Sasha orders some very rare (and expensive) orchids from 0. Orchids believing that she would be able to sell them, however, Billy says he never would have agreed to this'd he had been asked. Och Orchids has demanded payment of the outstanding Invoice of $1,500 from Pity. 


While delivering some flowers the delivery driver gets caught in heavy traffic. Under pressure from Billy to get the flowers clevered on time to very Important ...met.. Jacob is speeding and crashes into a her stopped at a roundabout Nobody is injured and the flower van is protected by a bar at the front, howerer, there is $5,000 of damage caused to the other driver's car. 


Without consulting Sash. Billy started a separate business sell.ng flowers specifically for wedding. So far Fusion Powers haven't been supplying flowers to events as it would increase their insurance costs, however, Billy and Sashe have previously discussed the lucrative nature of supplying the wedding Industry. 


Discuss Billy's potential Suppor t your response with relevant case authorities. 

2. Blanca has recently Purchased a Sou. in MallacooTh. Originally her plan wasto move down there from Sydney at the end of 2017, however she has decided to wait a while as her father recently fell down some Waits and is now in need of full-time care. 
Bianca can't afford to leave the house empty as she is not curreThy working so she advertises it as a holiday renal in the local newspaper and online. Wassim sees the newspaper Hang, not reallang It is his cousin Blanca's house, and calls the number listed to make. enquiry. There is no answer so he sends the following text message: 


Hi. l would like to rent your house in 1Wallacoote for one MO. from 1 January 2018 for$2000.00. Please confirm how I should deposk the money and where I can pick up the key. 


On 10 D.ember 2017, Blanca replles that the house is already booked out between 1-7 January 2018 is available for a month from 8 January 2018 end confirms would co. $2000.00. 


The following day Wassim phones Bianca to obtain her bank account details and realises he has been speaking to his cousin. Upon realising This Bianca says she will 'do him a d.1' but acknowledges that 'I can't let you have It too cheap as I still have a big mortgage to pay on end I'm not currently wading' Bianca says '1 will rent you the house fora month from 8 January for $1200.00, being $300/week, inclusive on power, Internet and cleaning.' Wass., says 'that sounds perfect' and agrees to transfer full payment by 20 10.ember 2017. 

3. Find a written contract that is available online. It must he an Austinlian contract and you should include a UPI_ link to the contract above your answer. 


Describe and classify four terms from the contract as either a conWtion, warranty or intermediate term, explaining why you believe each term would be classified this way. Your responses MUST be supported with relevant case authorities.


What impact does the classificWon of a term as a condition, warranty or intermediate term have on the remedies avM1.

Joint liability for unpaid invoices

1. Issue:

  • Is Billy liable to pay Ooh Orchids the outstanding of fifteen hundred dollars for the purchase of flowers by his partner Sasha?

Partnership law in Australia is governed by the statutory provisions of Common Law of Australia. It can be stated that each of the states in Australia has its own separate statute which govern the provisions of partnership in that particular state. However the Federal statute governing the principles of partnership is the PARTNERSHIP ACT 1963.

According to section 14 of the Partnership Act 1963, each partner within a firm is jointly liable with the other partners for the liabilities incurred by the firm. However this provision of the statute is only applicable to the not incorporated limited partnerships. The principles of Partnership have been discussed elaborately in the remarkable case John Grimes Partnership Ltd v Gubbins [2013] EWC

Therefore after analyzing the rules as stated above in the Partnership Act 1963 it can be said that Billy is liable to pay the amount as the transaction with Ooh Orchids was done in the name of Fusion Flowers. Although Billy was not informed of Sasha’s decision of purchasing flowers from Ooh Orchids he is still jointly liable with Sasha to pay the outstanding amount to the aforementioned party according to the provision stated in section 14 of the Partnership Act 1963.    

Conclusion:

Thus to conclude, it can be stated that Billy would be liable jointly with Sasha to pay the outstanding amount of fifteen hundred dollars to Ooh Orchid even though he was not aware of his partner’s decision to purchase orchids from the aforementioned party.

  • Is Billy liable to pay the damages for the accident caused by Jacob?

In the notable case Prince Alfred College Incorporated v ADC [2016] HCA 37 the principles of vicarious liability was discussed elaborately. It can be said that Vicarious Liability is a form of secondary liability and the principles of the same are governed by Common Law. Vicarious liability states that acts of the agent will be indemnified by the principle. It can be noted that the Employer will be held liable by the third party for the acts committed by his employee. However, it is to be mentioned that the employer will only be considered liable for the acts of his employees if such acts committed by the employees were within the scope of their employment. To determine whether an employer is vicariously liable the application of three tests are essential as stated in the case Hollis v Vabu Pty Ltd (2001) 207 CLR 21. The tests are: Control Test, Organization Test and Sufficient relationship test

It can be said that Jacob was delivering the flowers as per the instruction of Billy which satisfies the provisions of the control test as stated above. Jacob was delivering the flowers on behalf of the company Fusion Flowers while the accident was committed. This satisfies the conditions of the Organizations test. It is rob be mentioned that Jacob was rushing to deliver the flowers on the instructions of Billy and as his agent. Therefore it can be established that a sufficient relationship existed between the two.

Conclusion:

1. Thus to conclude, it can be stated that Billy will be considered vicariously liable for the accident caused by Jacob and will e liable to pay the damages.  

  • Is Billy rightful in delivering flowers to weddings without consulting Sasha?

Vicarious liability in case of accidents caused by employees

According to section 6 of the Partnership Act 1963, partnership is defined as the relationship between the people who wish to carry on business with an objective of earning profit and has the same objective

The principles of partnership in Australia are governed by the Partnership Act 1963. According to section 10 of the aforementioned act, it can be said that any act committed by any of the partners in a firm will be binding upon the entire firm. The liability of such actions of partners will be borne jointly by all the partners of the firm as stated in section 13 of the act. However, according to section 35, if a partner carries on business of the same nature as that of the firm without the consent of the other partners, he would be held liable to pay to the firm all the profits made by him.    

It can be said that Billy is a partner on Fusion Flowers.  Billy cannot venture to deliver flowers to weddings without consulting his partner. Billy’s decision of delivering flowers to weddings would be considered an act of competing against the partnership firm, Fusion Flowers as stated in section 35 of the aforementioned Act. If Billy carries on his separate business, he would be liable to pay the profits made from his business to the firm.    

Conclusion:

Thus to conclude, it can be said that Billy is not legally permitted to carry on a separate business of the same nature as Fusion Flowers, in which he is a partner.

2. Issue

  • Are three elements of contract established in the contract between Bianca and Wassim?

Relevant Rule

The key elements of Contract are:

  • Agreement- In the remarkable case, AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454it was held that there has to be an agreement between the parties intending to form a contract. For an agreement to be formed an offer is essential. The offer must be conveyed by the offerer to the offeree. It is to be mentioned that for the contract to be legally binding upon the parties, the offer must be valid, unambiguous and complete in all senses. The parties of the contract must enter into such agreement consensually. For the agreement to be formed the acceptance of such offer is essential.
  • Consideration- In the remarkable case Carlill v Carbolic Smoke Ball Company[1892] EWCA the consideration of a contract was analyzed by the court of appeal of Australia. Consideration of a contract is the price that is asked by the offerer for offering the product or service to the offeree. It is to be stated that consideration is required to be present in a contract to be legally binding upon the parties. Consideration must be legal in nature. In the case Wigan v Edwards (1973) 47 A.L.J.R. 586 it was held by the court that it is the duty of the promisor to determine the consideration amount and the promisee will not proffer anything and call it consideration.
  • Intention to create legal relations- In the case Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309it was established that the party, Air Great Lakes Pty Ltd had no intention to enter into an agreement which is legally binding on the party, therefore the contract was not found to be valid. Thus it can be stated that both parties to a contract must be willing to establish the intention to create legal relations between them for a contract to be valid otherwise the contract would be merely reduced to an agreement.
  • Capacity to contract- The parties entering into contract must have the capacity to contract. It is to be stated that minors and people who were under the influence of psychoactive substances such as alcohol and will not be considered to possess the capacity to contract. In the case Blomley vs Ryan (1956) 99 CLR 362it was held by the court the defendant was not in his proper state of mind while he entered into the contract. It was established that the defendant was under the influence of alcohol while he entered into the contract therefore he lacked the capacity to enter into a legally binding agreement

The offer of renting the house was conveyed to Wassim by an advertisement in a newspaper. The rent of the apartment was also mentioned to Wassim by the offeror. The news of acceptance of offer was conveyed to Bianca by Wassim over telephone. It can be mentioned that the terms of the offer were miscommunicated to Wassim initially. However, later the offer was again communicated to Wassim by Bianca personally. It can be said that the new terms of offer were accepted again by Wassim willfully, intending to create legal relations. Therefore after analyzing the facts of the case, it can be stated that a contract was formed between the parties. The contract would be legal binding upon the parties.

Conclusion:

Thus, to conclude it can be said that the three elements of contract are established in this contract.

3. https://www.ebay.com.au/help/policies/member-behaviour-policies/user-agreement?id=4259

Terms of the contract

  • Using eBay- It can be stated that Ebay clearly mentions the way customers should avail eBay services. Customers are prohibited from posting content in inappropriate categories of Ebay. The infringement of policies, laws and third party rights of eBay is prohibited. It can be mentioned that if eBay services are used by any customer who has not attained the age of eighteen, he will not be able to enter into legally binding contracts. The user agreement also states that customers must not copy or redistribute the content of eBay or infringe copyrights of the products of eBay. It can be stated that the terms of using eBay are the conditions of the contract
  • Abusing Ebay- eBay talks about the steps that can be taken if the conditions of using eBay as mentioned earlier are violated. It can be noted eBay might suspend and terminate their services to customers if it is found that the customers have violated some of the terms and conditions of using eBay as stated earlier. The suspension of services being provided to customers can be considered to the conditions of the contract.
  • Money Back guarantee- It is to be mentioned that the money back guarantee policy of eBay is a part of the user agreement. However, buyers and sellers must comply with the policies and terms of the user agreement and accept eBay to be the final authority to make decisions when an agreement cannot be reached between buyers and sellers.
  • International sale- It can be stated that sellers can sell their products internationally if they list their items on the international websites of eBay. However, eBay has the discretionary power to restrict the sale of the products listed by the sellers to international buyers. This can be considered to be an intermediate term in the contract.

In case of breach of conditions of a contract, the non-breaching party would be entitled to claim compensation and the contract would be repudiated. In case of breach of warranty of a contract, the non-breaching party would be entitled to claim compensation. However, in the latter case the contract would not be repudiated. In case of breach of intermediate term, the loss of the non breaching party would be considered while calculating the damages to be paid to him.     

Reference:

John Grimes Partnership Ltd v Gubbins [2013] EWC

Prince Alfred College Incorporated v ADC [2016] HCA 37

Hollis v Vabu Pty Ltd (2001) 207 CLR 21

AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454

Carlill v Carbolic Smoke Ball Company [1892] EWCA

Wigan v Edwards (1973) 47 A.L.J.R. 586

Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309

https://www.ebay.com.au/help/policies/member-behaviour-policies/user-agreement?id=4259

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