Business Law Assignment: Critical Evaluation of Corporate Scenarios

Question

Task

The purpose of this business law assignment is to answer the below questions:

Answer

Business Law Assignment Question 1
Describe the federal and state court hierarchies, and explain their relationship to the doctrine of precedent?(Maximum 250 words)

ANSWER:
Australia has a hierarchical or tiered judicial structure as has most countries. In accordance with this structure, a court's place in a hierarchy reflects the kinds of cases it will hear and provides an appeal procedure mainly for a decision from a lower court to a higher court.

The state court hierarchies comprise the following:

Inferior courts: The inferior court is often stated as the magistrate court and even the local court. This particular court holds original jurisdiction mainly for minor matters, cases and disputes.

Intermediate courts: These courts have original civil and criminal jurisdiction and restricted appeal jurisdiction

Supreme courts: These courts have unlimited criminal and civil jurisdictions, as well as, appellate jurisdiction.

The federal court hierarchies comprise the following:

Federal circuit court: It is often stated as the federal magistrate's court where fewer substantive cases are heard, primarily in the areas of migration bankruptcy, business affairs, administrative, family disputes and commercial rules.

Family court: The courts hear lawsuits of all kinds involving family disputes and issues.

Federal court: In Australia, federal courts would hear cases and issues in the areas of labour relations, taxes, indigenous rights, corporate laws and trade laws.

The High court: The High Court is Australia's highest court and the highest court of appeal. The court would generally hear cases and matters relating to civil and criminal appeals and constitutional cases.

In creating a precedent, a courts hierarchy is instrumental. The Doctrine of Precedent states that, in circumstances in which the facts are the same, a Court must apply the rulings of the previous cases. In fact, if the previous case was brought before a higher court, a Court is obliged to do so under the same line (i.e., District Court must follow rulings of the Supreme Court).

If it comes from a Court in the same hierarchy and at a higher level, a precedent may be binding. In the context of WA, the Court of Appeal of the Supreme Court, which is the highest court in the jurisdiction - establishes the largest number of precedents.

Question 2
A company importing computer parts enters a contract with an Indian supplier who undertakes to supply for a period of 12 months various parts required by the importing company. The written contract includes the following terms:

• This contract is one of utmost good faith. The parties agree that this contract will not be enforceable in a court of law.
• The parties agree that this contract is non-reviewable in court; nor can any claim whatsoever be considered by any court, nor the validity of any term or claim that may arise between the parties.

After nine months, the importing company decides on their own to discontinue the agreement and stop paying for some parts that it has received. The supplier company wants to sue the importers to court but the importing company claims the contract is very specific about excluding the authority of the court in this particular agreement.

Discuss the rights of the Indian supplier. Can a court of law review the contract, and can the Indian supplier enforce their claim of payment against the customer?(Maximum 300 words)

ANSWER:
The contract was found to have been agreed by both parties for the last 12 months and the contract is one of the utmost good faith. It has also been found that both parties have decided that the contract in a court of law would not be enforceable. It was confirmed by both of the parties that the agreed contract cannot be reviewed before the court and any form of claims cannot be considered by any court. The agreement further specifies that any claim or term between the parties can become legitimate. After nine months, the importing company had decided to avoid paying for the received product and discontinue the agreement. Although the Indian supplier intends to sue and demand the payment against the buyer.

Here, both parties decided that it is not possible to enforce the contract before the Court, so the Indian supplier has the right to not review the contract before the Court. The same goes for the other party, and if the Indian supplier has made advance payments and refuses to sell the suppliers after a certain period of time, the other party could not have enforced the contract. The Indian court recognizes the principles of private international law and applies the choice-of-law clauses which both parties mostly agree on. It could be confirmed that the Indian supplier cannot sue the importer under any conduct or condition. The Indian supplier could not claim the payment. The Court of Law is not able to investigate the contract mostly because both parties have decided that no court should review any kind of claims. Even under the Indian agreement and contract policies, Indian supplier cannot claim.

Question 3
Ricky signed a contract to sell his slightly-used Suzuki Vitara Golf for $15,000 to an old friend Boris, after the latter threatened to tell Ricky's wife that Ricky is a discharged bankrupt. The vehicle still has a market value of $24,000. Boris told Ricky that if he didn’t sell his car to him, he will could always organise some of his former associates, who are all convicted felons, to visit Ricky and force him to do so.

Advise Ricky on whether he has any remedies to have the contract declared void and get his car back. (Maximum 300 words)

ANSWER:
In the provided case, it was found that Ricky and Boris had signed a contract in which Ricky is selling Suzuki Vitara Golf to Boris for around $15,000. Suzuki Vitara Golf's present market value is $24,000 approximately. It has been identified that Boris is also an old friend of Ricky. Ricky would suffer an enormous loss but the contract is signed after Boris threatened to tell Ricky's wife that Ricky is discharged bankrupt. Furthermore, Boris threatened Ricky to arrange for a former friend, who are convicted felons, to visit his home and compel him to sell the car if he did not sell it to him. It is clear that Ricky's decision was taken under pressure and also under threat.

Here, the parties could be distinguished based on power. Boris could be stated as the stronger party as he misusing his powers and advantage to gain value. On the other hand, Ricky could be considered as the weaker party as he is selling a product with a higher market value at a much lower price. Ricky was influenced by the power of Boris to sign the contract and it could be voided by the “undue influence” clause. The clause makes a contract void when an individual is able to persuade another’s decision mainly due to the relationship between the two parties. Here, one of the parties has much higher power than the other party and the party with the higher party influences the other weak party to gain benefit or value. If a party is influenced by the power of the other party, the contract could be turned void through undue influence. Here, Boris had been using his powers to threaten Ricky in two different ways. In one way, Boris was blackmailing Ricky and threatened to tell his wife that Ricky is discharged bankrupt. Boris also threatened Ricky by stating that his convicted felon associates would force him to sell the car. Ricky can use the undue influence clause to turn the contract void.

Question 4
If Helen enters into a contract and there is an exclusion clause in an unsigned document she has been given what questions would you need to consider to determine whether the clause forms part of the contract?

Advise Helen with reference to decided cases. (Alternatively: “You are required to cite relevant Australian cases to support your advice to Helen.”) (Maximum 175 words)

ANSWER:
Certain key questions should be taken into consideration for Helen to analyze the exclusion clause in an unsigned document. These questions are concerning;

Notice of the exclusion clause of Helen

• Is the exclusion clause taken to the notice of Helen?
• Did the other party take reasonable steps to bring the cause of Helen’s notice? Time of bringing exclusion clause to notice
• Did the exclusion clause taken to Helen’s notice occur before she entered into contract or after she entered into the contract?

The Council of the City of Sydney v. West (1965) 114 CLR 481

In this case, the court of law can apply the four-corner law that a party cannot exclude any liability of losses arising due to their negligence. Helen can use the law in case of an exclusion clause in an unsigned document.

Question 5
What happens when a contract is discharged? (1 mark) List the ways in which a contract can be discharged (6 marks). (Maximum 150 words)

ANSWER:
A discharged contract relieves the parties from their duties or obligations mentioned to be performed. The parties will no longer be bind by the terms of the contract entered between them. There will be no more contractual obligation between the parties involved. The contract will be discharged by performance, repudiation, mutual consent, and time lapse. The contract is discharged by performance when the contract is fulfilled. When both parties mutually agree to discharge the contract on their terms. When the contract time is lapsed and when the contract is repudiated by the parties.

Question 6
A group of health-conscious Buddhists have bought shares in a company that manufactures alcoholic beverages. About 400 members of that group are now shareholders and holding various amounts of shares. The members of the group who are now shareholders are not against the tobacco company making money. They are only concerned that the company is not implementing the right Occupational Health & Safety (OHS) standards, and that, moreover, it is not doing enough to prevent under-age smoking in Australia.

Explain the rights of these members to question the company directors in a members’ meeting regarding the company’s operations.

What are the rights of members to actually call an extraordinary meeting in order to discuss a particular environmental issue that has arisen since the last meeting of members was held? (Maximum 300 words)

ANSWER:
While a general meeting ordinary must be convened regularly (1 time per year in general ) to approve the accounts for year end, the extraordinary general meeting is convened only when exceptional decisions must be made.An EGM is necessarily assembled when the decision is made to modify the articles of association of the company.Since this is a meeting that goes beyond the normal framework, and which will address essential subjects in the life of the company, the invitation to the EGM must respect certain rules.

An extraordinary general meeting can be called by the directors or the Board of Directors , and as many times as necessary. It is quite possible to hold an AGO and an EGM at the same time: this is called a mixed assembly. Exception: in an SARL, only the manager has the capacity to convene a general meeting, whether ordinary or extraordinary. Unless it is an absolute emergency, the partners must be convened at least 2 weeks in advance, by registered letter with acknowledgment of receipt.