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CHAPTER 1: AN INTRODUCTION TO LAW AND THE AUSTRALIAN
LEGAL SYSTEM
I. THE DEFINITION AND FUNCTIONS OF LAW
1. Defining law
- Natural law : a universal understanding of what was right and wrong, fair and unfair, just
and unjust - the "law" that underpins universal human rights law today
- Positive law: "law" as the body of rules that regulates the relationships between the members
of society and between the government and its citizens so as to avoid conflict and promote social
cohesion
- Law: a body of enforceable rules, made by the state - the parliament and the court - the
parliament and the court - that is enforceable by the state.
- Commercial “law” consists of contract law, corporations’ law, consumer law, tort law,
product liability law, partnership law, and agency law which are made by the courts and
parliaments that apply to the business world and are enforceable by state-backed sanctions.
- The breach of a law results in sanctions or penalties
- Differences between legal laws and non-legal laws:
Reporting obligations: Binding precedent is a decision of a court that binds judges in a lower court in the same court hierarchy.
In considering whether a contract is a standard form contract, not something that the
court must consider. Whether the price payable takes into account the specifics of the
party and the : transaction
One of the “practical benefits” received by Roffey in Williams v Roffey Bros &: Nicholls (Contractors) Ltd [1990] 1 All ER 512 is that Roffey did not need to find another subcontractor
2. The functions of law
Changing the Constitution: Section 128 of the Commonwealth Constitution provides that the Constitution can be: changed by referendum that requires a “yes” vote by the majority of voters and in a majority of States
By the majority of voters and in a majority of States Refers to actual rights under the law w circumstances are likely to affect the consent of one or both : parties to a contract: mistake & duress and undue influence.
Simon and Stella, both of full legal capacity, agree to go on a date. Stella is to pay for the : dinner, but she is running late and does not meet Simon at all. Simon is embarrassed and: angry and calls Stella the next day to threaten to sue her for his taxi fares and dinner : expenses. Simon will not succeed in his claims because Simon and Stella did not intend the agreement to create legally enforceable : obligations Farah agreed to take care of an elderly woman Marge and in return was provided with a :house to live in that was promised by Marge to be Farah’s after she died. Farah cared for the : woman for 23 years, but upon Marge’s death Farah discovered that their oral agreement : was never put into writing. The woman’s son moved into the house and Farah made a claim : to the house. The court is likely to apply the doctrine of part performance. “I’ll pay you $3,000 if you complete a total rewrite of chapters 12 and 15 of this : textbook.” is most likely to be considered an offer. Contracts voidable by a minor do not include those not binding unless ratified by the minor during their minority. Hierarchy of courts: High Court is higher than the Federal Court of Australia in the federal court system. Lower than the Federal Court of Australia in the federal court system: 1. Supreme Court,
- Magistrates Court, and 3. Federal Magistrates Court Where an agreement has been made during the course of trade or commerce between businesses, the situation will commonly indicate that the parties intended to create binding legal relations.
3. Rule of law: importance to commercial life
Consolidating statutes, 2. judge-made law, and 3. equity. Which are some of the main features of the Electronic Transactions Act 1999 (Cth): all of the above: the validity of electronic transactions, recognition of writing by electronic means recognition of retaining information in electronic form.
The doctrine of precedent: With respect to a case being decided under the appellate jurisdiction of the Country Court of Victory, a decision of the appellate division of the District Court of New South Wales on the same Commonwealth legislation is persuasive.
The main legal issue in Felthouse v Bindley (1862) 11CB (NS) 869 was generally silence lack of action does not constitute acceptance of an offer. Separation of powers: The Governor is not one of the three branches of the Commonwealth government in Australia. The three branches are 1. the executive, 2. the judiciary, and 3. the legislative.
Criminal offences: The committal hearing is held before most summary offense matters with respect to criminal offences. Criminal offenses are indictable offenses are generally the more serious offenses, summary offenses are determined by a magistrate without a jury, and the prosecution must prove its case beyond a reasonable doubt. Public and private law: Criminal law (public law) is not classified as private law. Private law: 1. The law of contract, 2. the law of property, and 3. The corporations law.
Civil and criminal law: The document filed by the defendant is called a writ is with respect to civil law. True: 1. The typical purpose of a civil action is to obtain damages, 2. under civil law, one person may sue another who has committed a wrongful act, and 3. interrogatories and discovery are procedures that are available in civil proceedings. Federal system: Australia is a federal system, with two legal systems for each citizen.
A contract dividing the proceeds of a cocaine importing venture that has no technical defects and that is not overly harsh and unfair to either party is void. If one party has threatened another party to enter into a contract, the element that is missing is real genuine consent
Substantive and procedural law: Substantive law refers to actual rights under the law.
A partnership between husband and wife is a type of agreements in which types of agreements is there a presumption that parties intendto be legally bound.
Living arrangement between mother and daughter Agreement between father and daughter Dinner arrangement between friends
Court hierarchy: Local or Magistrates Courts are the lowest courts in the state hierarchy. Criminal proceedings: An indictable offense is a more serious criminal offense. Law reports: decisions of the High Court of Australia found only online in the Commonwealth Law Report.
Sources of law: the two main types of law in Australia are statute law and judgment-made law.
The promissory knew or was reckless as to whether the promisee intended to act in that is not one of Brennan J’s six criteria for estoppel from Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. 3 of 6 criteria: The promissory induced an assumption, the promisee acted in reliance on that assumption, and the promisee will suffer a material loss if the assumption is not fulfilled.
Incorporated limited partnerships have been introduced in all Australian States and Territories. as an agent, a partner is able to bind the other partners and, as principal, be bound by the actions of the other partners, in New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania provision for limited partnerships is made in the Partnership Act, and the Partnership Act provides that the rules of the common law and equity are to continue in force except insofar as they are inconsistent with the Act.
CHAPTER 2: AN INTRODUCTION TO LAW AND THE AUSTRALIAN
LEGAL SYSTEM
- Under s 115 of the Corporations Act 2001 (Cth), the maximum number of persons who may form a partnership for the acquisition of gain is 20,
- Under the Corporations Regulations 2001 (Cth), reg 2A.1.01, partnerships of more than 20 partners may be formed for certain professions/callings, and
- The Corporations Regulations 2001 (Cth), reg 2A.1.01 sets a maxima of partners for medical and legal practitioners, veterinary surgeons, patent and trademark attorneys, sharebrokers and stockbrokers and pharmaceutical chemists.
A limited partner does not have the right to inspect the books of the firm is regarding limited partnerships.
- A limited partner must not take part in the management of the business and does not have power to bind the firm,
- If a limited partner partakes in the management of the business, he/she is liable as a general partner, and
- Any differences arising as to ordinary matters connected with the firm’s business are to be decided by a majority of the general partners.
Sections 18 and 29 of the Australian Consumer Law are relevant to : Misrepresentation.
2. Considerations A firm’s assets as contributed by partners to make up capital losses need not be applied to pay the firm’s debts/liabilities to non-partners is regarding dissolution of partnership. _ In the event of dissolution, losses must be met first out of profits, followed by capital, then by partners in proportion to their share of profits, _ After dissolution, each partner is entitled to advances and residue by the firm, and _ After the dissolution, each partner’s authority to bind the firm continues, so far as necessary for winding up partnership affairs and completing unfinished transactions. Partnership may be formed in order to undertake a single business transaction. Carrying on a business implies repetition (Smith v Anderson (1880) 15 Ch D 247), In Khan v Miah [2000] 1 WLR 2123 it was held that work, such as finding, acquiring and fitting out a shop/restaurant, is undertaken with a view to profit, In Keith Spicer Ltd v Mansell [1970] 1 All ER 462 it was held that ordering goods and opening a joint bank account in contemplation of a business are insufficient for a partnership.
In Mercantile Credit Co Ltd v Garrod [1962] 3 All ER 1103, damages were not recovered even though, from the plaintiff’s perspective, the sale of the car was within the usual course of businessé is x court finding.
- In Goldberg v Jenkins (1889) 15 VLR 36, the firm was not bound to the transaction because borrowing money on behalf of the firm at over 60% interest when comparable rates were between 6% and 10% was beyond ‘the usual way’,
- In Construction Engineering Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541, Hexyl was not liable because the construction contract appeared to be between Construction Engineering and Tembel,
- If judgment is obtained against one or more partners of a firm, no action may be taken against the other partners, even if satisfaction cannot be obtained from the partner(s) sued.
Damages may be recoverable for loss of profit is about damages. The onus of proving losses is on the plaintiff Damages are a common law remedy Damages are awarded to compensate a party for all losses caused by breach of contract
The partnership under the Act must be registered with ASIC does not apply to the Partnership Act
The Corporations Regulations 2001 (Cth), reg 2A.1.01 does not set a maxima of partners for : architects and accountants is regarding the written law. Under s 115 of the Corporations Act 2001 (Cth), the maximum number of persons who may form a : partnership for the acquisition of gain is 20 Under the Corporations Regulations 2001 (Cth), reg 2A.1.01, partnerships of more than 20 : partners may be formed for certain professions/callings The Corporations Regulations 2001 (Cth), reg 2A.1.01 sets a maxima of partners for medical and : legal practitioners, veterinary surgeons, patent and trademark attorneys, sharebrokers and : stockbrokers and pharmaceutical chemists
Separation of powers: The executive is the body that administers the law is about separation of powers in Australia.
Consideration need not be adequate is … statements about consideration. A gratuitous promise is enforceable if contained in a simple contract Good consideration may consist of performing an existing legal obligation Good consideration can be present, future and even “past”
Business law: Trade Practices Act 1974 (Cth) is no longer regulates business or commercial law Competition and Consumer Act 2010 (Cth) Corporations Act 2002 (Cth) The law of contract
Constitution: Section 51 Commonwealth Constitution grants concurrent powers to the Commonwealth Parliament
The promisor knew or was reckless as to whether the promisee intended to act in that is not one of Brennan J’s six criteria for estoppel from Waltons: Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. The promisor induced an assumption The promisee acted in reliance on that assumption The promisee will suffer a material loss if the assumption is not fulfilled
Court hierarchy: The highest court in Australia is the High Court of Australia
The High Court’s decision in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 is” Extended the doctrine of equitable estoppels such that it applies even where there is no : pre-existing contractual relationship between the parties”
Sally puts up a sign stating that she has lost her dogs and will pay a reward of $100 for : their return to her within three days. Chang will not get the reward because he returned the dog knowing it was Sally’s, but : was unaware of her offer of a reward. Jim will not get the reward because he returned the dog but did not verbally : communicate acceptance of the offer to Sally
Nadia will get the reward as she returned the dog to the RSPCA Isabel will get the reward because she was only one day late in returning the dogs (and to : not give her the reward would be unreasonable) 2.2.3. EXCEPTION Jack was subpoenaed to give evidence on Rods behalf. Jack claimed Rod promised him : $2000 to give evidence. Jack would not recover that money - Jack’s public duty is to give evidence in response to that subpoena.
Where the government makes a policy promise and a citizen relies on it the court will always regard that policy commitment as a binding contractual obligation is about the contractual obligations of government policy proposals. 1. The courts tend not to assign contractual obligations to government policy promises,
- Where the government enters into an ordinary commercial agreement to buy services, the law of contract regulates this agreement, and 3. In Australian Woollen Mills Pty Ltd v Commonwealth of Australia (1954) 92 CLR 424, the government’s wool subsidy was found to be an administrative scheme and not contractual obligations.
Civil and criminal law: The document filed by the defendant is called a writ is with respect to civil law The typical purpose of a civil action is to obtain damages Under civil law, one person may sue another who has committed a wrongful act Interrogatories and discovery are procedures that are available in civil proceedings
Where the government makes a policy promise and a citizen relies on it the court will : always regard that policy commitment as a binding contractual obligation is about the contractual obligations of government : policy proposals. The courts tend not to assign contractual obligations to government policy promises Where the government enters into an ordinary commercial agreement to buy services, : the law of contract regulates this agreement In Australian Woollen Mills Pty Ltd v Commonwealth of Australia (1954) 92 CLR 424, the : government’s wool subsidy was found to be an administrative scheme and not contractual : obligations
With respect to the contractual capacity of corporations, s 124 of the Corporations Act : 2001 (Cth) gives them all the legal capacity of a natural person (together with some additional powers that can : only be exercised by a corporation)
In Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, the court : recognised Innominate term which later became part of Australian law in : Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115.
2.2. Contracts under seal A unilateral contract does not require consideration but simply a promise to perform an : act is sufficient is about bilateral and unilateral contracts. More than one party is required for both bilateral and unilateral contracts Both parties are obligated to perform their promises in a bilateral contract Only one of the parties is obligated to perform an action in a unilateral contract
Federal system: Australia is a federal system, with two legal systems for each citizen. Australia is a federal system, with one Constitution and a number of non-lawmaking : States and Territories Australia is a unitary system, where the States and Territories are constrained in their : law- making powers by the Commonwealth Australia is a federal system with three branches of government: the judiciary, the : executive and the Crown.
Ratio decidendi*: The ratio decidendi of a case is the reason given for deciding the case
Compensatory damages are also known as actual ordinary damages
Where an event occurs that is not the fault of either party that causes a fundamental : change to the nature of the contract and the parties obligations and although the contract : covers that eventuality, it would cause hardship to one party to enforce it is not a type of termination Termination by bankruptcy When the parties have fully and exactly performed their obligations to each other under : the contract When a deed displaces a simple contract
A contract may be illegal as performed where only one party performs it in an illegal : manner. A contract that is legal as formed will be legal as performed The courts are most likely to find a contract illegal and unenforceable where a statute : penalises the way it is performed
Any illegal conduct will make a contract illegal as performed
A legal right has been infringed but there is no actual loss is when nominal damages awarded.
Where the subject matter of the contract is an apartment in a complex of 20 apartments is a circumstance where specific performance would be ordered
The remedy of restitution is based on the concept of unjust enrichment where the defendant is unjustly enriched at the plaintiff’s expense
Restitution: was not awarded in the case of Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 as : the contract was not in writing as required by statute and therefore not enforceable. May be awarded where there is less than substantial performance Is said to be based on unjust enrichment Is subject to a number of defences, such as estoppel
Injured feelings or disappointment are not usually compensated for with payment of damages
With respect to substantial performance and partial performance. partial performance is where a party voluntarily accepts less than full performance by : the other party
Owing to the Commonwealth’s limited lawmaking powers under s 51 of the : Constitution, it applies only to corporations is with respect to the Australian Consumer Law. It is contained within Schedule 2 to the Competition and Consumer Act 2010 (Cth) It applies to conduct engaged in outside of Australia The Australian Consumer Law is applied in each State and Territory
Not a remedy for unconscionable conduct & A criminal prosecution An injunction Ordinary damages A pecuniary penalty
A criminal penalty can be sought for a breach of s 18.
pyramid selling is unfair practice involves participation in a trading scheme where persons at the : top receive most of the benefits
In Baltic Shipping Co v Dillon (1993) 176 CLR 344 case the court recognise that damages for disappointment and distress : could be available subject to certain limitations Chris maintains that a document that he and Kathy have signed is a binding contract. : Kathy maintains that it is merely a receipt and does not include all the terms of their : agreement. parol evidence may be admissible.
That : the goods are acceptably fit for the consumer’s purpose is not an element required for acceptable quality of goods.
It must complement an express term of the contract is not an element requiring satisfaction before the court will : imply a term into a contract.
In the situation where one party has repudiated the contract and the other party has ignored the : repudiation, termination not available.
3. Effect of non-compliance: the doctrine of part performance Non est factum means it is not [my] deed
Unliquidated damages are damages where the court is to determine the amount
With respect to legality of object, Illegal objectives will not affect a contract provided both parties have agreed to it.
Jaz approaches a salesperson on the forecourt to buy the car package she saw : advertised on television and is told that there were only two cars for sale as a part of that : deal and there are now none left. The salesperson tells Jaz that she would look much better : in the convertible model and although there is no deal on that car, it is only $50,000 more constitutes bait advertising
Parol evidence is not admissible to evidence whether a document constitutes a contract or merely a note. Will always be admissible to evidence duress Is admissible to evidence a collateral oral agreement Will always be admissible to evidence fraud
Where the performance of the contract is rendered illegal by the destruction of the : subject is not a situation where frustration would occur matter of the contract by one of the parties Long term serious illness of a person contracted to perform a personal services contract Where the government in exercising its powers has made completion of the contract : Impossible Where a change in the law renders performance of the contract illegal
Repudiation is the same as termination; the contract is at an end. Is where a party demonstrates an unwillingness to perform their obligations Gives an innocent party the right to terminate the contract Is where a party demonstrates an inability to perform their obligations
Where a contract is made in writing, the express terms of that contract are generally to be found in the writing
The plaintiff in an action under s18 of the Australian Consumer Law is required to prove : what the conduct is misleading or deceptive or likely to mislead or deceive
A party repudiates a contract when they are no longer able or are unwilling to perform their obligations
Sharma was selling his secondhand vacuum cleaner to Natasha and told Natasha that it : could “do all the rooms in the house ten times over without the filter needing to be : changed”. Natasha spent a few weeks shopping for other vacuum cleaners but eventually : returned and purchased Sharma’s, telling Sharma it was the cheapest she had seen in two : weeks and she liked the colour. When Natasha took it home she soon discovered that the : vacuum cleaner could only do one room at a time and then the filter would need changing. : Natasha cannot rely on Sharma’s statement for breach of contract because Natasha did not attach any importance to the statement when it was made.
In Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625, Gibbs CJ listed all but the : following various ways that a contract may be repudiated: “[I]f one party discharges [themself] from performance by agreeing to a new agreement : that supersedes the previous one”
A party repudiates contract when the party is able but unwilling to perform their obligations under it
Duress involves: Duress must be the only reason for entering into a contract is not accurate.
Delegated legislation: An example of delegated legislation is the Partnership Act 1958 (Vic)
Cribb v Korn (1911) 12 CLR 205 established the sharing of joint returns does not in itself create a partnership
A partner cannot pledge or sell partnership property, incur and pay debts on partnership : accounts or hire employees is … statement. A partner has express actual and implied actual authority to engage in certain activities with third: parties Contravention of an agreement to restrict a partner’s authority is not binding on the firm if notice : of the agreement has been given In Polkinghorne v Holland (1934) 51 CLR 143, the firm was held liable because Holland provided : the advice in his role as solicitor; thus in the ordinary course of the firm’s business
Each partner must take an active part in the direction and management of the firm regarding partnerships The second element of a partnership is carrying out a business in common To be a partnership there must be a mutuality of rights and obligations In Degiorgio v Dunn [2004] NSWSC 767 it was held that there was no partnership because the : business was not run “in common”
A partnership cannot be dissolved because the business is carried on at a loss.
Fraser crashes his car with his friend Angus as a passenger. Angus is injured. Angus was : not wearing a seatbelt. Damages cannot be apportioned for breach of contractual duty of care where there is : contributory negligence. Liability would likely be apportioned between Fraser and Angus DamagesawardedtoAngus,if any,would be reduced this contributory negligence Angus’ contributory negligence relates only to his own safety,notto that of others Parent and child where the child is living independently is not one of the special relationships in which the onus of : proving that undue influence was not employed shifts to the denying Party
4.1 Contractual Capacity a court view substantial performance of a contract when The contract is complete, but the uncomplete portion may be allowed for as a reduction : of the full contract price
The plaintiff successful in Overseas Tankship (UK) Ltd v Miller Steamship Co Pty : Ltd (The Wagon Mound No 2) [1967] AC 617 (PC) when another plaintiff failed in the earlier : related Wagon Mound case because in the first case, the plaintiffs failed to show that a reasonable man would have foreseen : the risk of damage from the oil spill
In Tame v State of New South Wales (2002) 211 CLR 317 where Tame was given a false : blood alcohol reading part of the test of reasonable foreseeability is a question of fact
Nicola drives the forklift at her place of work, Rooze’s Roofing. Nicola always leaves the : forklift in a certain place where she has been told to leave it, with the forks up off the : ground. One afternoon a customer who is collecting goods from the workshop reverses his : car into the forks on the forklift. He is injured and his car is damaged.: What is the principle that would make Nicola’s employer liable for her actions Vicarious liability The reform to the law of negligence that took : place in Australia in the early 2000s does not apply to claims in contract law.
Partnerships can be dissolved because of mutual incompatibility,making it impossible for partners : to carry on a business
A creditor can enforce liability against an incoming partner whether another, she is a party to : the contract In the absence of special statutory provision, although each partner is liable with the others for : the whole of the debts of the firm, their liability is only joint A creditor can bring only one action against members of a partnership and any partner can insist : that the action be stayed until all other partners are joined as parties. A person admitted into an existing firm, liability may be incurred where it is specially agreed upon
Regarding partnership: a partnerships (or firm) is away of gathering resources or expertise for major projects In Popat v Schonchhatra (1997) 3 All ER 800, the Court decided Popat was entitled to half the profits on the sale of business and to a share of the profits : that had accrued after the dissolution of the partnership, but before the final settlement of : accounts.
The rule of law:Due process is closely related to the rule of law.
If one party has threatened another party to enter into a contract, the element that is missing is real, genuine consent
Section 15AA of the Acts Interpretation Act: Section 15AA of the Acts Interpretation Act 1901 (Cth) Provides that the purpose of the statute or its object should be the preferred method of : determining the statute’s meaning.
Common law: Common law is judge made law
Minors In Ashton v Pratt [2015] NSWCA 12 what was the main reason for the court deciding that : there was no intention to create a legally binding contract, the verbal language of the agreement greatly lacked detail from either party and did not : indicate definite obligations
Simone advertises a car for $4,000. John responds to the advertisement and asks : whether Simone will take $3,000. Simone says ‘no’, but that she will hold the offer open for : a week. The next day she sells it to Samantha. : Simone does not have to hold the offer open as no consideration was given
The legislature: Exclusive powers are those that can be exercised only by the Commonwealth
Why are illusory terms in a contract problematic: they are vague or ambiguous so they fail to create a legal obligation
Civil law and criminal law: Where an act is both a crime and a tort, the State may prosecute the offender for the crime, and the victim may bring a civil action
Peter verbally offers Tara his car for $5000. Tara refuses saying it’s not worth that, but : she will pay $4000. The status of Peter’s first offer has lapsed because of Tara’s counteroffer
Sources of law – statute: Statutes may not Override Existing Common Law Codify the law Bring new laws into existence Repeal laws
Separation of powers: Not one of the three branches of the Commonwealth government is in Australia is the Governor
In situations is the offer most likely not to have lapsed where Wrench had an option to purchase land but, unknown to Wrench, the seller died : prior to Wrench’s acceptance Reception of English law in Australia: Latin phrase explained the rationale for applying English laws to the new Colony of New South Wales, terra nullius
Andy promises Ellie $100 on her 21st birthday. If this promise was contained in a simple contract, the legal position is that such a promise is never binding as it must have consideration supplied by Ellie
In Elizabeth City Center Pty Ltd v Corralyn Pty Ltd (1995) 63 SASR 235, the option to exercise renewal of the lease, negated the postal rule because the notification was not sent by certified mail as required
