Legal Issues for Case Study 1

Legal Issue

The issue is to determine whether Jennifer and Betty have entered into a legal enforceable contract or not. Further, the set of remedies needs to be extended to Jennifer about her legal rights.

Two parties can enter into contractual legal relation when the following essentials exist between them.

• Presence of lawful offer and acceptance
• Valid consideration
• Capacity of the parties to enter into legal relation
• Intention on the part of parties to form contractual relationship

If any of the above essential is not present then the parties cannot enact a legal enforceable contract. However, the absence of intention of the parties to form the legal relation is a key issue when the contractual parties are bound with the domestic relationships such as mother-daughter/ son, husband-wife, and grandmother/father- grandson/daughter and so forth. It means, when the parties are in domestic relationship and clearly indicate the intention to enter into contractual relation then only the contract is said to be enforceable between the parties.  

Further, when any of the party does not have intention to form legal contract with the other party then no enforceable contract would be formed between the parties. Therefore, the parties cannot demand to satisfy the contractual obligations arising from such arrangements. The evidence of this aspect is highlighted in Jones v Padavatton  case, where no contract was formed between the parties. It was highlighted in this case that the court in contracts between parties having social relationships would have the default assumption that intention to create legal relations does not exist and the same would need to be proved to the court through evidence.

Application

It is apparent from the case facts that Jennifer and Betty (grandmother of Jennifer) have entered into a contract. According to the contract, Betty promised to Jennifer that if she will come to Mount Gambier and start living there with her, then she will transfer the ownership of her house to Jennifer. Jennifer decided to live in Mount Gambier with Betty. Later on, Betty refused to transfer the ownership to Jennifer. It is apparent that both the parties are in domestic relation and hence it would be assumed they did not have any intention to make any legal relationship at the time of contract. Also, there is no circumstantial evidence in this case which could potentially reflect on the existence of intention to forge legal relationship. Hence, it can be said that no enforceable contract is enacted between Jennifer and Betty because of the absence of intention of parties to enter into contractual relation.

Conclusion

Jennifer and Betty have not enacted a valid enforceable contract because of the absence of intention to create legal contract. Hence, Jennifer would not be able to sue Betty for not transferring the ownership of house in her name.

Legal Issues for Case Study 2

Legal Issue

The issue is to determine whether any enforceable contract has been formed between Sanche and Richard or not.

Applicable law

When the offeree has sent the acceptance with additional conditions against the initial offer than this conditional acceptance would be termed as counter offer. In this regards, the counter offer would result in termination of the initial offer and hence, initial offer would not be available for acceptance. Moreover, according to the judgement given in Entores Ltd v Miles Far East Corporation case, when the acceptance has been sent through electronic mode of communication such as mail and fax, then the acceptance becomes enforceable only when the mail, fax has received by the respective offer within the given time frame.

Application

It can be seen from the given case information that Sanche (offeror) has sent offer to Richard (offeree) to sell 1974 Holden Monaro for the consideration of $60,000. He has clearly mentioned that the offer would remain open for the acceptance till 5 pm of 3 February 2015. Richard has received the offer on 3 February and has made a conditional acceptance which has been communicated through a phone message. He has made the condition to buy the Holden Monaro for $55,000. It can be seen that additional condition has resulted the counter offer against the original offer and hence, the initial offer would not be available for acceptance.

However, Sanche did check her phone message later on the same day and as soon as he cheked the same, the counter offer became valid. Moreover, later on, Richard has ready to purchase for $60,000 and hence, sent the acceptance through mail which has received by Sanche on 4 February.  However, this would not result in formation of a legal contract consideration that the original offer was already terminated due to counter offer being sent by Richard and received on Sanche on 3^rd only.

Conclusion

It can be said that Richard and Sanche have not enacted a valid enforceable contract. Hence, no contractual liability is present for the given parties.  

Legal Issue

The key issue in the given case would be to opine on whether the contract entered into by the agent would be enforceable at the end of the principal or not. Further, it also needs to be ascertained as to whether the potential contractual liability arising out of agent enacted contracts would be borne by the principal or not.

Legal Issues for Case Study 3

Applicable law

In the agency relationship, the authority to act on behalf of the principal is extended to the agent. This authority may be explicit or apparent. If any outsider or third party enacts a contract with the business which is executed by the agent, then such a contract would be considered valid irrespective of whether the agent had the requisite authority to execute the contract or not. The only exception to this rule is when the third party has reasonable suspicion before acting the contract that the agent may not be authorised to enact the contract but still go ahead with the enactment.

Also, any contractual obligation that arises on account of the conduct of the employee would have to be borne by the employer. This concept is called as vicarious liability whereby the employer on account of being the superior party would have to compensate for the wrong or negligent acts of the inferior party i.e. employee. This principle would still be applicable in the event of the employee conducting in a manner which was not authorised by the agent. While the principal would be liable to the innocent third party, the principal may recover damages from the agent for breach of duties of agent.

In the given case, Kevin is the principal and Ravi is the agent appointed for selling furniture. Kevin has clearly instructed Ravi not to sell a particular dining table for less than $ 7,000. Ravi advertises for the same through a local newspaper which is seen by Theresa who is keen to buy the dining table. Theresa offers $ 6,500 for the table which was readily accepted by Ravi. However, when taking delivery of the table, Theresa noted that the table has a huge scratch on the top. As a result, she declined to take the delivery of the table and demanded her money back which Ravi refused. The principle of vicarious liability would be applicable and hence the $ 6,500 would have to be returned to Theresa by Kevin. It is apparent that Theresa is innocent here since at the time of buying she did not know that Ravi is not the owner of the table. However, Kevin can sue Ravi for breach of duty and can attempt to recover damages caused.

Conclusion

In accordance with vicarious liability, Kevin would have to pay $ 6,500 back to Theresa irrespective of whether he has received the money from Ravi or not.  Kevin can recover the damages from Ravi by citing the breach of duties of the agent.

Legal Issues for Case Study 4

Legal Issue

The key issue to determine is whether there has been a copyright infringement owing to the actions carried out by Declan.

With regards to music and related creations, copyright is granted so that the intellectual property can be safeguarded and the benefits can be enjoyed by the creator. Copyright may be defined as the “exclusive and assignable legal right” to the original creator to perform, publish, record or any other use that may be deemed fit by the creator. This copyright is protected through the legal provisions highlighted in the Copyright Act 1968. In accordance with this Act, no individual or entity can infringe the copyright and hence for any usage of the copyrighted material must seek permission from the creator. In case the creation is used by an individual for commercial purpose without taking any consent from the creator, then the rights of the creator would be jeopardised and lead to legal dispute where damages would be awarded to the creator.

In the given case, it is apparent that the music is composed by Trevor using particular software. Before releasing this music for sale, he plays the same for his friends including Declan. However, Declan after hearing Trevor’s music composes a song which is very similar particularly the chord. This clearly reflects that Declan has essentially copied Trevor’s song since the composition has been made after hearing the original composition by Trevor. Declan further used the tune for commercial purposes and this behaviour clearly amounts to copyright infringement. Trevor is the original creator and he must possess copyright to the song. Further, for the lost sales in Europe, Declan would have to provide compensation or damages to Trevor. Also, Declan would have to stop selling his pirated song.

Conclusion

It can be concluded that indeed Declan has infringed the copyright regarding the song composed by Trevor. As a result, Trevor can sue Declan for breach of copyright and hence recover damages to the extent of profits lost on sales in Europe. Also, an injunction would be issued forbidding Declan from repeating such acts in the future.

Legal Issue

The key legal issue is to determine if the restraint of trade clause inserted during the sale of hair-dressing business is legally enforceable in its present form or not.

Applicable law

In accordance with the decision in Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd case, a restraint of trade clause would be held valid if either of the parties can prove that the clause is reasonable. In order for the restraint of trade clause to be reasonable, it is essential that it should seek to protect the legitimate business interest of the purchaser of the business. Also, to assess the reasonableness of the restraint clause, other factors such as nature of business, geographical and time constraints along with relative bargaining power would be considered.

In the given case, it is apparent that even though a hairdressing business has been purchased but the purchaser (Maddie) has inserted the restraint of trade clause which bars the seller (Clare) from conducting any business in Adelaide for a period of 10 years. Clearly, the restraint of trade clause is not reasonable since it extends to other businesses which are not related to the hairdressing business. Also, the time frame of 10 years does not seem reasonable for the nature of business.  Also, it is noticeable that Clare has opened a café to which Maddie is objecting which is clearly unreasonable since opening up of the café does not impact Maddie’s hairdressing business adversely.

Conclusion

There is no breach of contract in the given case considering that the restraint of trade clause is unreasonable.

References

Davenport, Shayne & Parker, David, Business and Law in Australia, (LexisNexis Publications, 2^nd ed., 2014)

Gibson, Andy & Fraser, Douglas, Business Law, (Pearson Publications, 8^th ed., 2014)

Latimer, Paul, Australian business law, (CCH Australia Ltd, 24^th ed., 2005)

Pendleton, Wayne & Vickery, Roger, Australian business law:  principles and applications, (Pearson Publications, 5^th ed., 2005)

Pathinayake, Athule, Commercial and Corporations Law, (Thomson-Reuters, 2nd ed., 2014)