Legal Analysis on Business Law

Question 1.1: Does the Advert and Rosanne’s Actions Create a Valid Contract?

Issue 

The advert on friends’ moisturizer and the actions of Rosanne creates a valid contract. The advertising company agreed to compensate $100,000 to any person who would get pimples after using the product twice daily for six months.  Rosanne took the challenge and used the product by closely following instructions on the product. In contract law, a valid contract as explained by Clarke (2010) is an expressed or written agreement amid two parties in the providence of a service or a product. 

Rules 

A contract refers promises or one promise that legally binds two parties. The Australian law as described by Clarke (2010) dictates that there should be an agreement that comprises of an offer and acceptance, consideration, intention of creating legal intentions, legal formalities, compliance, and legal capacity of the parties. An agreement is the first requirement of a valid contract that entails an offer and acceptance. It involves consensus or “meeting of the minds” amid two or more parties. The contract law suggests that while constituting an offer, no particular form is required. All that is required is communication between the parties that amounts to a promise.

Acceptance is an accurate statement (written, oral, or implied by conduct) by one party agreeing to offer and does not require any particular form. It requires communication for its effectiveness. According to the general rule, the conclusion of an agreement occurs where and when an acceptance of communication has been received. However, regarding material respect, if an agreement is uncertain, it does not institute a binding contract. This occurs in situations where the agreement is incomplete, ambiguous or vague or constitutes a mere ‘agreement to agree’.

Analysis 

Friends Essential Beauty gave an offer to any individual willing to use the Friends Moisturizer for six months. Rosanne, on the other hand, accepted the offer and used the product following the instructions on the jar. This created an agreement that makes the contract valid. Therefore, there was an agreement between the company and the customer (Rosanne). The two parties entered into a consensus even if there was no signing of any particular form. They achieved a promise through communication. 

Conclusion 

Rosanne accepted the offer by conduct from the Friends Essential Beauty. There was a conclusion of the agreement due to the received communication acceptance. In this case, the agreement may be termed as certain thus instituting a binding contract. This is because the agreement is precise, complete and confident. Therefore, the advert and the actions of Rosanne form a valid contract. Hence, Friends Essential Beauty Company owes Rosanne $100,000 voucher for five years beauty treatment.

Question 1.2: Is Ursula Obliged to Sell the T-Shirts at $5.00 to Sally. 

Issue 1

Ursula is obliged to sell to Sally the T-shirts at $5.00. He placed a deceiving advertisement on Phoebe’s salon indicating the price of T-shirts as $5.00 instead of $35.00. Ursula’s case is a misleading or deceptive conduct which is prohibited under the Australian law of 1974 trade and commerce section. The provision is found in section 18 of Australian Consumer Law (ACL). 

Rules 

The Australian Consumer Law prohibits enterprises and their employees from engaging in behaviors that truly deceive or mislead or are expected to deceive or mislead potential customers. This section involves all forms of communications and conduct including negotiations, advertising, letters, SMS, emails, and personal discussions among others. According to REIWA (2013), deceptive or misleading conduct may include leaving out or concealing significant information, not correcting a misunderstanding, staying silent about material facts, making inaccurate, exaggerated or false claims, not updating information that has changed, encouraging the wrong conclusion, and intentionally misleading or lying to the client. 

Analysis 

In this case study, Ursula acted against section 18 of ACL. They left out or omitted relevant information on the advertisement. Ursula is, therefore, guilty of presenting a deceptive or misleading conduct to the consumers. He thus made exaggerated or inaccurate claims to potential customers. It is for this reason that Sally decided to buy the t-shirts in bulk. However, making the sale would result in a loss of $600.00 which would cost the company a great deal. 

Conclusion

Ursula is obliged to sell the t-shirts to Sally as he represented a deceptive or misleading conduct

Issue 2

The actions of Ursula can also be termed as negligence. It is out of negligence that Ursula placed a wrong figure on the t-shirt. A tort of negligence according to CLE (2017) is an action of law created by a person to whom the wrongdoer/defendant owed a duty of care. The occurrence of liability is the breached duty of care that results to damage. 

Rules 

The action of a civil negligence is categorized into three categories that include: the defendant owing a duty of care to a plaintiff, breach of the duty of care, and irresponsible action. In the case study, the defendant was negligent because the risk was foreseeable, it was insignificant, and she failed to take precautions. This gives the plaintiffs reasons to sue the defendant. The plaintiff is owed by the defendant a duty of care which if breached becoming a court concern. In determining the breach, the court considers the foreseeability of a risk. They also consider the reasonableness of the actions of the defendant.  

Analysis 

Ursula owed Sally a duty of care. His negligent action caused inconveniences to Sally who was making sales based on the pricing in the advertisement. Ursula breached the negligence law as he failed to offer a duty of care to Sally, his actions were careless, and he breached the duty of care. He is, therefore, guilty, and Sally should use this in her favor. However, although there are many reasons Ursula should sell the t-shirts to Sally at $5.00, having realized the tort before making the sale releases him from the negligence law. 

Conclusion 

The neglect was not intentional, and he may, therefore, be exempted by law like in Holmes v Mather (1875) LR 10 Ex 261 case.  

Question 1.3: According to the Electronic Records have the Massage Beds Been Sold?

Issue 

Whether the massage bed will be sold to Emily at $2500 or $3000 depends on the time both parties received and read the email. Emily’s email with the acceptance of $2500 was received at 9.40am and read at 9.45am. On the other hand, Friends Essential Beauty received the email from Emily in their inbox that they were willing to pay $3000 at 9.30am but they read it at 10.00am. By use of the electronic records, Friends Essential Beauty will sell their massage beds at $2500

Rules 

The Australian Consumer Law (Cth) (ACL) governs the consumer law in Australia in Schedule 2 of the Competition and Consumer Act 2010 (Cth)). The ACL establishes that pricing is a significant component as it helps consumers in making informed decisions in the marketplace. Agreeing on pricing is a form of contract between parties. According to the Attorney-General’s Department (2010), the provision of a contract occurs in the pricing of products and services that are acquired collectively by parties within a contract. 

Analysis 

Consumer law thus binds friends Essential Beauty and the GOT Beauty Parlour. The two parties agreed to make a business transaction where GOT Beauty Parlor intends to buy six massage beds from Friends Essential Beauty. The agreement on pricing according to electronic records will be $2500 as that is the amount that was received by GOT Beauty Parlor. The duration on which that sum was received and read by the company forms the pricing agreement between the two companies. GOT Beauty Parlor will have made an informed decision in relation to the fair price deal it received from Friends Essential Beauty. 

Conclusion 

Therefore, based on the electronic records, the massage beds will be sold sold at $2500 which is the amount that was read and confirmed by GOT Beauty Parlor before the Friends Essential Beauty read their email. 

Question 1.4: Is Ursula Bound by the ‘Restraint’ Clause in the Letter? If so, Why? If Not, Why Not?

Issue 

Whether the restraint clause binds Ursula in her contract letter depends on whether she signed it during the hiring process. In an attempt to protect their goodwill, Friends Essential Beauty included a restraint of trade clause to their employees. The restraint clause is meant to prevent departing employees like Ursula from taking customers after leaving the company. The Friends Essential Beauty Company includes the clause during recruitment of their employees highlighting that employees should not be employed in beauty salon within a five kilometer radius from its location. Ursula threatened the company that she would get employment from GOT Beauty Parlor which is their competitor. This is against the agreement she signed that indicated that she is not supposed to work within a 5-kilometre radius from the company within two years. 

Rules 

Mostly, clients have access to mailing lists, business contacts, confidential information, and trade secrets, which they may poach customers of their former employers. In protecting legitimate interests of proprietors, Latimer (2012) explains that a restraint of trade clause (covenant) is included in employment clause for limiting competition from an ex-employee or employee. The validity of a restraint of trade clause is sensible amid parties and in the public interest, and to employees’ legitimate rights in practicing their profession and business and in selling their expertise. Restraint of trade clause was illustrated in the case of Buckley v Tutty [1971] HCA 71where the Rugby League transfer system in the 1960s tied their players where any club wanting him would pay a transfer fee where the player accessed just a small percentage. This restrained players from moving from one club to another. 

Analysis 

Ursula already threatened the Friends Essential Beauty of getting an employment from the firm’s competitor. Ursula may have had access to Friends Essential Beauty confidential information, and he is in a position of using it to the detriment of the company. Also, Ursula had personal contact with the customers of the enterprise, and she may use the connections to entice the clients away. Restraint trade clauses also prevent key staffs from being poached or recruited by former colleagues. Friends Essential Beauty may, however, have issues in enforcing the restraint of Ursula as her own wrongful led to the termination of the contract. This may make the company forfeit the rights of enforcing a post-employment restraint that is found in the employment agreement. Also, Ursula may join the company of her choice if the restraint was not well drafted. 

Conclusion 

However, the Friends Essential Beauty Company has the right to restrain Ursula if their restraint of trade covenant is well drafted; Ursula had read and signed the restraint before entering into an employment contract with the company, and because they had good reasons for terminating Ursula from the workforce. Therefore, Ursula is bound by the restraint trade clause in her employment contract.

Question 2.1: What Else Does the Landlord Need to Provide to You, and Identify 5 Pieces of Information That Must be Included, in Relation to the Rental Property?

Issue 

After the close of the gift shop next door, the landlord makes the approach of expanding my business space. He presents me with a standard leasing contract and a lease addendums. He should also provide information to ensure that the agreement runs smoothly.

Rules 

Renting home and property in Australia is governed by a set of laws referred to as Residential Tenancies Act 1989 (the Regulations) and Residential Tenancies Act 1987 (the Act). One of the important legal documents between a landlord and a tenant is lease contract. This manuscript should be read and understood by the two parties, where they answer all questions while resolving any dispute before the signing of the agreement. This document is the sole contract governing the landlord-tenant relationship for the period of the tenancy. The lease thus acts as a solution after a dispute occurs between the two parties. 

The landlord may also provide the tenant with lease addendums. Wasden, (2010) explains that lease addendums is a separate lease contract that is signed by a tenant together with the lease contract which addresses various policies. One of the information that the landlord should give the tenant is the maintenance of the rental property. He should stipulate specific support that should be provided by resident and that which he is to provide. Often, the lease contract highlights the specific responsibilities for each party. However, certain maintenance duties on the property are provided by the law on both the tenant and the landlord. 

Analysis 

The landlord should give the tenant information on the tenant’s responsibilities to safeguard the property. Some of the obligations of the tenants in safeguarding include proper garbage disposal, keeping the property clean and sanitary, obeying the regulations of the landlord, use of plumbing facilities, electrical fixtures, and appliance safely, and prevent friends and families from damaging the property. Collection and paying of rent are valuable information that a landlord should provide to a tenant. Before signing a lease contract, the owner should explain and restrict the form in which he accepts the payments on rents, either by cash or certified check. 

The landlord should also give information on the due dates of rent and late fees. The dates should be governed by the lease which also stipulates the fines to incur in case of late payments. The landlord should also give information to the tenant on any authorized agents that may deal on his behalf. They include personal representatives, agencies, and management companies. 

Conclusion

The two documents presented by the landlord legally bind the tenant and the landlord. The information given is also important in ensuring smooth running of the agreement.

Question 2.2: What are Your Obligations and Liabilities under Clause 5.1?

Issue 

The lessee is obliged by the clause 5.1 to give consent to the lessor on any processes that are to be undertaken on the land. The consent should be in written form to show that the lessee agrees to the process. The lessee will have some obligations and face liabilities.

Rules 

The consent should be written within seven days after receiving a receipt from the lessor of a written request to carry on the proceedings. The lessee can continue with waxing during the periods of the repairs. The tenant has the right to agree or disagree with the operations that the landlords prepare to perform. 

Analysis 

The wide inside arch between the two spaces will create double space for the lessee. This is a long-term advantage on the part of the business as space will enhance the outlook of the operations in the salon while reducing congestion in the enterprise. There is a connecting door between the two salons which is a positive thing that the lessee is contented with. As the lessee of the property I am obliged to give consent on any operations undertaken in the business being operated. It is the tenant’s obligation to live in the area as he feels suitable to his liking and on which he is okay with the connection door between the two salons.

The noise that will result from the operations will distort the operations of the salon. This will create losses on the part of the company. The lessor is not liable to refund any losses incurred during the process of the repairs thus leaving the company at a loss. The only trade that continues while the operations are on-going is waxing. Regarding the businesses that are performed daily, waxing cannot cover a good percent of the income to be earned during the operation duration.

Conclusion 

Using the clause 5.1, I as the lessee disagree on allowing the landlord to carry out the termed operation on the property as it will distract my peace and the operations of the business. This will lead to the incurrence of loss on the part of the firm for the two weeks services are to be taken.

References

Clarke, J. (2010). Overview of Australian contract law. Australian Contract Law. Retrieved from https://www.australiancontractlaw.com/law.html

CLE. (2017). Continuing Legal Education (CLE): CRIMINAL NEGLIGENCE. Legal Aid Queensland. Retrieved from https://elo.legalaid.qld.gov.au/webdocs/dbtextdocs/internal/irregseries/cle/2003/criminalnegligence.pdf

Attorney-General’s Department (2010). Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 (1st ed., pp. 167-175). Canberra: Office of Legislative Drafting and Publishing, Attorney-General’s Department. Retrieved from https://www.legislation.gov.au/Details/C2007C00261/55040ea7-94ed-45b4-b498-6b7bdbbc6edb

Holmes v Mather, LR 10 Ex 261 (1875).

Latimer, P. (2012). Australian Business Law 2012 (31st ed.). Wolters Kluwer Business.

REIWA. (2013). Mandatory CPD 2013 Australian Consumer Law. Government Of Western Australia Department Of Commerce Consumer Protection. Retrieved from https://www.commerce.wa.gov.au/sites/default/files/atoms/files/aclpmmanual2013.pdf

Wasden, L. (2010). Office of the Attorney General Landlord and Tenant Guidelines (1st ed.). Retrieved from http://www.ag.idaho.gov/publications/consumer/LandlordTenant.pdf

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