IRAC Legal Problem-Solving Approach for Various Legal Issues

This assessment allows students to solve practical problems that arise from a fact scenario and to give appropriate advice to clients.

Matilda opened an accounting business and contracted with Quick Computers Ltd to supply her with the latest computer system by no later than April in the year. Quick Computers Ltd was two months late in delivering and installing the system. As a result, Matilda lost $25,000 in ordinary revenue. However, she also lost a lucrative contract to do a one-off urgent auditing job for a busy new client. Matilda bought the computer system expecting that it would be available to help with these contracts. Required With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Matilda as to the damages that she may recover. Please explain fully, using relevant legal authority. 

Albert runs a business which has a turnover of more than $1m. It is profitable and definitely has good long term prospects as an accounting software distributor. Albert decides to register a company, ‘MoneyBags Pty Ltd’, and to transfer the business into that company, which he then plans to sell. MoneyBags Pty Ltd is sold to an investor who asks that Albert stay on as the director and manager of the company. The investor organises a contract that requires Albert, as part of the purchase of his company, to promise not to compete against the company in any capacity within a 25 kilometre radius of the company’s location. Albert is also Required to promise that he will not use any of the intellectual property or trade secrets of the company in any other enterprise. Albert signs the agreement. Albert leaves the company after only 6 months employment due to a dispute over his working hours. Albert’s wife registers a new company, ‘MyBags Pty Ltd’ to run an accounting software business, similar to the one that Albert previously established. Albert is employed within the company but is neither a shareholder nor director.

The investor in Albert’s original company is concerned and threatens to take legal action against both Albert and MyBags Pty Ltd. Required: With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Albert whether he can rightfully work for MyBags Pty Ltd and what rights the new owner of MoneyBags Pty Ltd may have against Albert? 

Rounder Tyres Pty Ltd was a company that conducted a tyre wholesale business. The Racer family held all the shares in the company and Tom Racer and his wife Sally were directors. The company had not been doing very well for some months as there was fierce competition in the tyre market. In spite of this the board of directors kept on allowing the purchase of more tyres to store in the warehouse. It was clear that the last few orders could not be paid when the time for payment was due. At the time when the company was in a financially precarious position, the company granted a 5 year lease of the premises it owned at a fixed rent substantially below current market value to two of its directors.

Question 2

The lease contract included an option in favour of the tenants (directors) to buy the premises again at a fixed price substantially lower than the market value. The granting of the lease together with the option was authorised at a general meeting of the shareholders of the company. Five months after the lease was granted the company went into liquidation. The creditors are very upset as they believe the lease should not have been granted and they want to take action against Rounder Tyres Pty Ltd. Required: With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Explain whether the directors breached any of their duties owed to the company? If so discuss the defences (if any) that may be available to them. (20 marks)

Morris has become very interested in painting and sculpture. He works on his art hobbies after work and on weekends when he has plenty of free time. Recently he became interested in the idea of cement and concrete sculpture and decided to experiment in this field. Last week he purchased a small cement mixer for $6,500 from Stony Building Supplies. The cement mixer was manufactured by Concrete Bond Ltd. After work on Friday, he set the machine up and used it as directed. As soon as he switched the machine on he was horrified by the sound of a large internal explosion in the machine caused by a faulty machine part.The machine is now in a state of disrepair. Additionally, fragments from the machine shattered Judy’s windows. Judy is Morris’ next-door neighbour. Part of the shattered glass hit Judy in the face and eye. She is now hospitalised and will be unable to look after her elderly parents for the next few months. They rely on her for assistance with cooking, shopping and cleaning of their home. 

With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Judy whether she would be successful in negligence to recover compensation from Concrete Bond Ltd Please explain fully, using relevant legal authority. (20 marks)

Sarah recently sold Prakash 1000 hectares of what was verbally described as “prime agricultural land” for $ 850,000. During negotiations Sarah, knowing it to be untrue, told Prakash that the land was appropriate for all agricultural purposes. Prakash signed a written agreement which made no mention of the purposes for which such land might be employed (other than describing the parcel of land as “agricultural land”). After settlement Prakash took possession of the land and it now appears that much of it is not cleared, and without spending close to $1 million, it is probably only suitable as grazing land for animals and unsuitable for most crops. Prakash had intended using the land to grow wheat.

With reference to relevant legal principles use the IRAC legal problem-solving approach to advise Prakash of all alternative possible legal actions in common law against Sarah. Please explain fully, using relevant legal authority.