Fundamentals Law in Australia

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Table of Contents

Introduction
Law of torts
Laws of contract
Sales of goods and services
Employment contract
Breach of warrant of authority
References

Introduction

The law is supposed to create a balance in all the powers of the society including: political, social, military, legal, economic and cultural¹ (Cheeseman, 2010). The law is also supposed to bring freedom to members of the society and cause them to enjoy their freedom by being secured (Welch & Pacifico, 2000). Besides these roles, law in the modern society is structured in way that the regulators of the law or the institutions controlling the law cannot be controlled or regulated by the law (Currie & Cameron, 2001). The structuring of the legal system in Australia is such that the law only prevents people from doing certain things (Cheeseman, 2010). Even within the business environment, the law helps to control and regulate every activity (Cheeseman, 2010). This paper looks at some of the topics relating to fundamentals of law.

Law of torts

Tort can simply be defined as a civil wrong; hence it affects the business environment. It affects legal forms of business in specific scenarios (Deakin, et al., 2007). It makes the forms to either be preferred or less preferred depending on the scenario (McKendrick, 2005). The liability of tort emerges from breaching duty primarily fixed by the law. Such a duty is generally towards people and its breach is redressible by an action of unliquidated damages (Deakin, et al., 2007). When beginning a business, the first decision of selecting the appropriate form of business is usually the most difficult. This is because there several types of business form and each has scenarios in which they are preferred or not preferred by the law (Deakin, et al., 2007). All these scenarios need to be put under serious considerations before deciding the exact business form that best suits a company. The forms of business include: corporate, sole proprietorship, franchise, S corporation, limited liability Company, limited liability partnership, and partnership (Currie & Cameron, 2001). According to the terms of employment contracts for companies and partnerships, all agents committing torts either intentionally or unintentionally would make the employer be liable for their actions (Deakin, et al., 2007).

Laws of contract

A contract can be defined according to law as an agreement enforceable at law between two or more parties. The basic intention of contracts is to make legal obligations between the parties involved. Therefore every element of the contract has to be in writing although the agreement can also be orally (Currie & Cameron, 2001). There are essentials aspects that make a contract valid or invalid (Cheeseman, 2010). In a contract, there has to be an offer and acceptance, an intention to create legal relations, consideration but in parole cases parties must have the capacity to contract, and lastly, the parties must consent free from fraud or force (McKendrick, 2005). The contract is usually in the form of a document tailor made to suit the needs of a business (Gerven, 2004). Some companies would prefer to print their sales contract at the back side of business transaction documents such as invoices for the sake of convenience. This means that whoever they transact business with and agrees to purchase their goods or services agrees to the terms of the contract (Coase, 2003)

When a contract is referred to as unconscionable, its terms are excessively unfair and unreasonable to one of the parties in the contract⁵ (Welch & Pacifico, 2000). These unfair terms make the affected party to complain and call for a cancellation of the contract. When a contract is deemed unconscionable, it fails to be enforceable since the considerations are inadequate and grossly dishonest. Three issues raised in a case of unconscionable include the degree of honesty, fairness and competency (Cheeseman, 2010).

Sales of goods and services

The laws of sales of good defines a contract of sales as a contract whereby the seller, transfers or agree to transfer the property in goods to the buyer for a monetary consideration called a price (Ross, 2007). Both the actual sale and an agreement to sale are included in the terms of agreement of the contract of sale (Welch & Pacifico, 2000). There is a distinction between the two; the contract is called a sale where the transfer of property takes place at once. An agreement of sale exists where the property is not to pass until sometime in the future or some conditions are fulfilled (Cheeseman, 2010).

Whenever there is a contract of the sale of a good in a deliverable state, the property of the good passes to the buyer when the contract is made (Currie & Cameron, 2001). It is of no importance if the time of the delivery or the time of the payment is delayed. Whenever there is an unconditional contract for the sale of a good, the owner or the seller is bound to do something to a good for the purpose of putting it into a deliverable state (Deakin, et al., 2007).

Where there is a contract for the sale of a specific good, the seller is bound to measure, weigh, test or do something to the good for the purpose of ascertaining the price of the good (McKendrick, 2005). The property fails to pass until the act or thing has been done and the buyer has noticed thereof. Whenever the goods are delivered to the buyer on approval or on sale or return, the good therein passes to the buyer. However this is only confirmed when the buyer has signified his or her approval to the seller by performing an act that implies the transaction has been adopted (Cheeseman, 2010).

The other instance is when the buyer fails to denote his or her consent to the seller. However the buyer retains the good for a period of time longer than that of the fixed time for return of the goods. Both the buyer and the seller of goods are entitled to rights when engaged in a contract of sales (Ross, 2007). The buyer can choose to decline a good after purchase is made in case there is a breach of contract or in the case of a contract considered unconscionable (Ross, 2007). One of the most working defenses in cases where a buyer sues a seller for breach of warranty is to rely on contract disclaimer, if it was ever signed (Cheeseman, 2010). During a warranty of fitness, the buyer solely depends on the choice made by the seller to select a good that fits the purpose in which the buyer intends to fulfill. The seller, based on the awareness of all the features of the goods he or she is selling, then would recommend a specific good to fit the purpose.

Employment contract

According to the terms of employment contracts for companies and partnerships, all agents committing torts either intentionally or unintentionally would make the employer be liable for their actions (Ross, 2007). Obedience is one of the aspects of employee-employer relationship. But, the obedience is expected to be lawful. Every work that an agent is expected to carry out is supposed to be in accordance to the terms of the employment (Welch & Pacifico, 2000).

Breach of warrant of authority

If an agent acts for the principle without the latter’s authority, the agent is personally liable for breaching the warrant of authority (Welch & Pacifico, 2000). A detour normally occurs whenever an agent physically departs from the stipulated service of the employer to perform acts that are personal and not defined in the terms of employment (Ross, 2007). It is a form of tort however, it constitute only minor departures (Ross, 2007). In such cases the employer or the principle cannot escape from vicarious liability which will be imposed against. For major forms of departure that amounts to serious disobedience of the principle’s instruction, the employer usually is relieved from being liable (Welch & Pacifico, 2000).

Case 1: Angelo and Christie

In any lease transaction, there are several legal issues involved. A lease is defined in legal terms as a contractual agreement where a user pays an owner of an asset to use the asset (Deakin, et al., 2007). The user is referred to as the lessee while the owner is referred to as the lessor. When the asset is tangible, the agreement will be referred to as a rental agreement. In the case of Angelo and Christie, the caravans are the tangible properties in which Angelo leases to Christie for some rent. Leases can be cancelable whereby termination of the agreement can either be done by the owner or the user of the asset.

However, there are also other cases where a lease cannot be terminated or canceled. In such cases, the lease is referred to as non cancelable lease. Within the lease, there are clearly stipulated guidelines for the responsibilities of each party involved in the agreement (McKendrick, 2005). Sometimes the local laws automatically act as the guidelines for the individual responsibility of each party involved in the lease. Generally, when the rental payments are made after the agreements, the lessee has exclusive use and possession of the asset or property (Currie & Cameron, 2001). The owner or any other person is not expected to interfere with the use of the property by the tenant not unless upon invitation by the lessee (Cheeseman, 2010).

The first legal issue involved in the case Angelo is lease renewal provision. The tenant or Christie has a right to renew the lease for an additional time period that wishes to. Angelo cannot take away this right on the grounds of being the lesser of the caravans. There has to be a contract provision within the lease to allow Angelo to take away the rights of the lease or to terminate the lease. When the Christie’s one year term ended, she had the right to renew the lease. However, the renewal comes with room for negotiation with regards to payment or rental increase (Cheeseman, 2010). In case 1, Angelo wanted to increase the rent for the caravans after the expiry of the Christie’s first year term. Therefore according to the law, this move is legal as the lessor has the right to renegotiate the rents.

In some cases, the lease can clearly state that the terms of rent are to be agreed upon by the lessee and the lessor at the time of renewal. In such as a case, the verbal agreement that Angelo and Christie engaged in would be appropriate. In other cases, the lease can state that the market rent dictates how much the lessee is supposed to pay in form of rent (Ross, 2007). Therefore, if the lease agreement between Angelo and Christie stated that the market rate of rent is to be used for settling the payment agreement, then clearly any verbal agreement cannot legally hold. It is not expected that there be conflict between what is agreed orally and what is written in the contract (Cheeseman, 2010).

The other legal issue involved in the case is that of nuisance. This is a common law tort. Tort can simply be defined as a civil wrong; hence it affects the business environment. It affects legal forms of business in specific scenarios (Deakin, et al., 2007). It makes the forms to either be preferred or less preferred depending on the scenario (McKendrick, 2005). The liability of tort emerges from breaching duty primarily fixed by the law. Such a duty is generally towards people and its breach is redressible by an action of unliquidated damages (Deakin, et al., 2007). The nuisance occurred when Christie held loud parties to cause offence and annoyance in the other neighbors. They complained about the noise that came from Christie’s parties. As a landlord, Angelo expects complaints relating to noise once in a while (McKendrick, 2005). It is wrong for Christie to hold loud parties with noises that create discomfort to the other neighbors. Basically, the other neighbors have a right to relax and enjoy themselves within their families and the entire community. If the lease gave provision that address the issue of noise in the neighborhood, Christie has no right to violate these provisions (Ross, 2007).

In the case of Angelo and Christie, the provisions of the agreement seem to be open-ended (Welch & Pacifico, 2000). In such cases there can arise conflict either in the lesser’s right to renew the lease or in the rental payment agreement. As it can be noted that later on, Christie and Angelo after verbally agreeing and settling to 175 dollar per week, Angelo decides one day to ask Christie for the arrears in rent as a result of the difference between what was orally agreed by the two of them and what is in the lease. Christie may choose not to pay the arrears at the same time she may choose to pay the arrears based on the circumstance therein (Gerven, 2004). If she chooses to pay the areas, it will be because of the fact that she has caused offence to her neighbors by holding wild parties. In addition, the contract clearly says that rental term of payment is $200 and not $175. If Angelo decides to make this a court case, the court would consider the written agreement to have more weight than the oral agreement (Currie & Cameron, 2001).

On the side of the Christie, her only defense is the fact that there is room for negotiation with regards to payment agreements when renewing a lease. Because of the nature of such agreements to be open-ended, the court can intervene and offer guidance to settle the conflict regarding payment or rent. If Christie chooses to leave, she will have to pay the remaining rent until the end of her lease term. She also cannot make any other negotiations with Angelo because they are only made when the lease is being renewed. Because her side of defense is relatively weak, she will have no option but to pay the arrears.

Case 2: Angelo and Ali

In case 2 the main legal issue involved is breaking of a lease early. Ali wishes to terminate the lease two months before the expiry of the lease. In normal cases, residential leases have a binding nature. Both Angelo and his tenants are bound to the terms of agreement within the lease¹⁰ (Cheeseman, 2010). It should also be noted that there are instances when the lessee can wish to terminate the lease earlier than the expiry of the agreement (Cheeseman, 2010). In the above case, Ali categorically stated before he signed the lease, that he and his family were recent immigrants to Australia from a war zone. He needed somewhere quiet for his children to get over their fright and anxiety from the dangers they had faced while in the refugee camp (Deakin, et al., 2007). Angelo assured him that his needs and desires will be met while straying in his property. He specifically made references to the code of behavior stipulated in the lease agreement. But because of the loud parties held by Christie, Ali began to complain and told Angelo that he wants to leave since his need of peace and tranquility is not being met.

Ali can still afford to break the lease early but there some things that he has to consider. It generally does not matter what the lease says because the institution governing the relationship between a tenant and a landlord are the laws within a particular state¹¹ (McKendrick, 2005). These laws take precedence over the terms in the lease. Therefore, Ali needs to research and ensure that he or she make references to the overall institution governing the rental terms agreement between a lessee and a lessor. The laws can be retrieved from the internet because the most states posts governing laws online. The reason for Ali’s early terminations of the lease is very clear. First of all, the caravan that he has rented is inhabitable for him and his family because of the noises caused by Christie. Depending on the nature and extent of the damage, Ali can negotiate with Angelo to determine who owes the other and how much (Deakin, et al., 2007). It should be noted that Angelo has been aware of the noise going on for a sometimes and acted oblivious to the situation. This means that he is partly to blame for the damages caused as a result of the noise. In conclusion, Ali does not have to pay rent for the remaining months as a form of damages caused to the landlord, Angelo. When it comes to weighing the defenses of both sides, Ali has a strong defense.

References

Cheeseman, H., 2010. Business law, Legal environment, Online commerce, Business ethics and International issues. 3rd ed. Pearson/Prentice Hall, Upper Saddle River, NJ.

Coase, W., 2003. The Aims of the Law of Tort”, Current Legal Problems. 2nd ed. Hurt Publishing, Oxford.

Currie, T. & Cameron, G., 2001. Your Law. Nelson Thomson Learning,vol. 4, no.2, pp. 227-33.

Deakin, T., Johnston, H. & Markesinis, N., 2007. Markesinis & Deakin’s Tort Law. 2nd ed. OUP, Oxford.

Gerven, v., 2004. Cases, Materials and Text on National, Supranational and International Tort Law. 2nd ed. Hurt Publishing, Auckland.

McKendrick, E., 2005. Contract Law – Text, Cases and Materials. 2nd ed. Oxford University Press, New York.

Ross, M., 2007. Concurrent liability in tort and contract. Structural survey, vol. 5, no.3, pp. 78-89.

Welch, L. S. & Pacifico, A., 2000. Management Contracts: A Role in Internationalisation. International Marketing Review, vol. 7, no.4, pp. 34-45.

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