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5 Apr

LAW6000 Business and Corporate Law


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LAW6000_Assessment 2_Case Study
Subject Code and Name
LAW6000 Business and Corporate Law
Assessment 2 Case study
2000 words +/- 10%
Learning Outcomes
This assessment addresses the following subject learningoutcomes:b) Demonstrate a sound comprehension of the essentialelements required to create, manage and discharge acontract and assess the remedies available for breach ofa contract;c) Examine legal principles related to creation and operationof various forms of business organisations and criticallyevaluate their effectiveness across a range of businessscenarios.d) Explain the processes for incorporating, managing andwinding up of a company, including key director duties,the importance of the Corporations Act 2001 and the roleof regulatory bodies.e) Evaluate the role of agency in contract formation fordifferent business vehicles and identify the associatedrisks such as vicarious liability for negligent acts.f) Employ legal skills (statute law and case law), criticalreasoning and make informed judgements as to likelylegal outcomes of a range of business scenarios.
By 11:55pm AEST/AEDT Sunday of Week 9 (Module 5.1)
Total Marks
100 marks
Context:This assessment allows students to solve practical problems that arise from a fact scenario and togive appropriate advice to clients.LAW6000_Assessment 2_Case StudyInstructions:There are five case studies you are required to critically analyse.With respect to each case study:✓ Identify the legal issue(s) arising from the facts of the casestudy✓ Identify the appropriate legal rules that requires discussion in the case study✓ Apply the law to the facts of the case study✓ Reach a conclusion/ give practical advice to your client.Your analysis should refer to appropriate cases and statutes and be referenced using the APAReference system.Submission is through SafeAssign by 11.55 AEST Sunday of Week 9 of the relevant trimesterLAW6000 Assessment 2 Case study analysisQuestion 1 (20 marks)Sharleen owns a vintage furniture store in the south east of Melbourne. There are a few such storesscattered in the area. Sharleen’s store imports vintage furnishings from various European countries.Sharleen recently completed a very successful end of year sale and now hopes to replace old stock withnew stock from overseas. She already placed an order for the stock some months ago and she needs thenew season furnishings urgently. The sale went very well and 70% of her stock was sold. She is aware that ifshe does not get the new stock in on time from overseas, she will lose a lot of money in sales. Her cash flowwill be adversely affected and she will not be able to pay her rent, telephone and electricity costs. She willalso struggle to meet employee salaries and the substantial payments on her overdraft with her bank. Infact, if her order from overseas is not delivered on time to her business, Sharleen is likely to facebankruptcy.She contacts the delivery company, Overseas Fright Solutions Pty Ltd, with which she has been dealing for anumber of years. Davinder is the director and owner of this company. He is now aware of Sharleen’sfinancial problems and instead of charging his company’s normal delivery fee of $6,000 per delivery, whichthe parties have already agreed upon, Davinder now advises Sharleen that his company cannot deliver thegoods for the agreed price and that if she wants them, she will need to pay $12,000 per delivery. Sharleen isvery unhappy with this news but reluctantly agrees because of her desperate financial position.It takes three delivery trips for the goods to be received at Sharleen’s business and she pays the higher pricefor each delivery. The total payment is $36,000.Sharleen is distressed and seeks your advice.REQUIRED:With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise Sharleenas to her common law rights against Davinder and/or Overseas Fright Solutions Pty Ltd. Use appropriatecase law in support of your answer.(20 marks)Question 2 (20 marks)Jim Blonde is a former defence consultant who now works for Intelligent Sellutions Pty Ltd, a company thatdeals with modernising motor vehicles so that they can self drive. Jim is skilled in the area of artificialintelligence and autonomous vehicle technology, having worked in the area during his consultancy.Intelligent Sellutions Pty Ltd has hired Tom Stone, a GPS navigation expert, to build a suitable navigationsystem that will allow autonomous cars to safely navigate any road network. A written contract was signedbetween the parties. Tom is a high achiever. He attended Massachusetts Institute of Technology (MIT) andgraduated with the highest honours at age 16. He knows almost everything relating to navigation scienceand technology. He is a professional engineer and can craft any kind of navigation device. Tom is famous forcreating the intelligent navigation systems that are used in the new futuristic defence aircrafts.LAW6000 Assessment 2 Case study analysisJim Blonde told Tom that it was essential that the navigation system was safe and that it should be able toupdate itself for at least 5 years. He added that the system ought to work on marked roads and unmarkedroads. Tom replied “All of our navigation systems are intelligent and can be used all over the universe onany terrain. We have it sorted. They will also update themselves for upto 10 years.” The two agreed on thisverbally and this statement was not incorporated into the written contract.The cost of developing the navigation system was $500,000, to be paid in two instalments: at the start ofthe work and the balance on completion. Intelligent Sellutions paid $200,000 while the work was beingcarried out.When Tom indicated that he had finished the work, Intelligent Sellutions ran some tests on the navigationsystem as soon as they received it. Jim Blonde installed it in one of the cars that they were working on andtook it out for a drive. Immediately the car reached a busy unmarked road, the navigation system failed andthe car stalled and would not move any further. As a result, Intelligent Sellutions refused to pay Tom,arguing that the navigation system was not safe and did not work according to their agreement.REQUIRED:With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise IntelligentSellutions of their common law rights against Tom Stone as they seek to rely on his assertions. Useappropriate case law in support of your answer.(20 marks)Question 3 (20 marks)Benedicto and Prakash are the directors and shareholders of a “Healthy Solutions Pty Ltd” which importspersonal protective equipment from the European Union for sale to various local health institutions. Thecompany has a large warehouse where it keeps its goods, and distributes all its products from there.Two months ago, the company entered into a contract to supply a large local health care provider withdisposable face masks. Benedicto and Prakash were excited and they ordered a large shipment from theEuropean Union to enable them honour the contract. The company ordered sixty shipments of face masksfrom their supplier and have paid a large deposit. The shipping company which brings the goods intoAustralia is now waiting for payment.Healthy Solutions makes its first delivery but soon thereafter there are concerns about the safety of thistype of mask. The government issues a order banning these masks and specifies that only “N95” masks canbe used in the health services sector. As a result the health care provider cancels all further orders. HealthySolutions now has no future revenue. They have huge stocks of masks which cannot be sold. The shippingcompany needs to be paid. There are various other bills due to the tax office. Employees and other serviceproviders have also not been paid. It is not certain how all these expenses will be met.LAW6000 Assessment 2 Case study analysisBenedicto and Prakash are desperate, and do not know what to do. They approach you for advice onwhether the company is insolvent, and if it is, what they must do.REQUIRED:With reference to relevant sections of legislation, use the IRAC legal problem-solving approach to adviseBenedicto and Prakash on whether their company, Healthy Solutions Pty Ltd, is insolvent and if it is, whatare the implications of such insolvency for Benedicto and Prakash and for the company in relation to anyaction which they may take.(20 marks)Question 4 (20 marks)Mrs Donovan bought shares worth $170 000 in Digi-money Enterprises Pty Ltd when the company wasincorporated by her friends John and Jessica Rych. At the time this was equivalent to 10% of the issuedshares. John and Jessica Rych took up 35% each and the remaining 20% was were taken up by their sonPaterson.Digi-money Enterprises Pty Ltd was run very profitably for several years. Dividends were regularly paid outof the profits of the company for the first 4 years. In the fifth year, there was a disagreement between MrsDonovan on the one hand and John and Jessica Rych on the other.Subsequently, the company paid no dividends. The company however paid hefty salaries, bonuses anddirectors fees to the Rych family. They retained additional funds in the Retained Earnings account, and didnot allow Mrs Donovan to inspect the records of the company. This effectively ensured that the Rych familyreceived a steady income stream, while Mrs Donovan received no funds from the company for the next 3years.She has tried to sell her shares but under the constitution of the company, the Rych Family are the onlyones she is permitted to sell to, and they offered her $17,000 for her investment.It is now four years since Mrs Donovan received a dividend from the company, and she has come to seekyour advice as to her position. She believes that the company is being run solely to benefit the Rych familyand that she has been oppressed by their actions.REQUIRED:With reference to relevant sections of the Corporations Act 2001 (Cth) and appropriate case law, use theIRAC legal problem-solving approach to advise Mrs Donovan whether she has any recourse.(20 Marks)LAW6000 Assessment 2 Case study analysisQuestion 5 (20 marks)Beatrice is a very successful business person. She owns Build Better Enterprises, a large business in SouthAustralia that manufactures made-to-order bathroom fittings, targeting the rich and famous. She hasworked very hard to grow the business.Despite all the money that Beatrice has made in the business, she has no close family around her and is notable to create any meaningful relationships. She is extremely busy but sometimes gets very lonely.Beatrice is now approaching 70 years of age and feels that she needs help with running her business.Beatrice has a niece, Shanice, who is an accountant working for a large accounting practice in Darwin.Beatrice asks Shanice to move over to South Australia and help her run Build Better Enterprises.Beatrice promises Shanice that she would give Shanice 50% of her business, Build Better Enterprises, ifShanice works for her for 3 years.Shanice has just settled into a new dream position at the accounting practice. She also has just moved into anew home which she purchased with her partner Marcello, who also works in Darwin. Marcello does notwant to relocate. Because Marcello refuses to relocate, Shanice and Marcello’s relationship breaks down,and Marcello starts a new relationship with another woman.Shanice and Marcello sell the house. She then quits her job and moves to South Australia to start a new lifewith her aunt. After eight months together, the relationship between Shanice and Beatrice breaks downand Beatrice throws Shanice out of her house and her business. Shanice is angry as she has lost everything.REQUIRED:With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise Shanicewhether she can successfully sue Beatrice under contract law. Use relevant case law to support yourarguments.(20 Marks)LAW6000 Assessment 2 Case study analysisLearning Rubric: Assessment 2
Assessment Criteria
Distinction(Advanced)75 -84%
High Distinction(Exceptional)85-100%
Evaluation ofinformation selectedto support the casestudy30%
Limited understanding ofkey concepts required tosupport the case study.Confuses logic andemotion. Informationtaken from reliablesources but without acoherent analysis orsynthesis.Viewpoints of experts aretaken as fact with littlequestioning.
Resembles a recall orsummary of key ideas.Often conflates/confusesassertion of personalopinion with informationsubstantiated by evidencefrom the research/coursematerials.Analysis and evaluation donot reflect expertjudgement, intellectualindependence, rigor andadaptability.
Supports personalopinion and informationsubstantiated byevidence from theresearch/coursematerials.Demonstrates a capacityto explain and applyrelevant concepts.Identify logical flaws.Questions viewpoints ofexperts.
Discriminates betweenassertion of personal opinionand informationsubstantiated by robustevidence from theresearch/course materialsand extended reading.Well demonstrated capacityto explain and apply relevantconcepts.Viewpoint of experts aresubject to questioning.Analysis and evaluationreflect growingjudgement, intellectualindependence,rigor and adaptability.
Systematically and criticallydiscriminates betweenassertion of personal opinionand information substantiatedby robust evidence from theresearch/course materials andextended reading.Information is taken fromsources with a high level ofinterpretation/evaluation todevelop a comprehensivecritical analysis or synthesis.Identifies gaps in knowledge.Exhibits intellectualindependence, rigor, goodjudgement and adaptability.
Effectivecommunicationwhile giving advicesto client20%
Difficult to understand foraudience, no logical/clearstructure, poor flow ofideas, argument lackssupporting evidence.Audience cannot followthe line of reasoning.
Information, arguments andevidence are presented in away that is not always clearand logical.Line of reasoning is oftendifficult to follow.
Information, argumentsand evidence are wellpresented, mostly clearflow of ideas andarguments.Line of reasoning is easyto follow.
Information, arguments andevidence are very wellpresented; the presentation islogical, clear and wellsupported by evidence.Demonstrates culturalsensitivity.
Expertly presented; thepresentation is logical,persuasive, and wellsupported by evidence,demonstrating a clear flow ofideas and arguments.Engages and sustainsaudience’s interest in thetopic, demonstrates highlevels of cultural sensitivity
LAW6000 Assessment 2 Case study analysis
Effective use of diversepresentation aids, includinggraphics and multi-media.
Correct citation ofkey resources andevidencePercentage or marksfor this criterion10%
Demonstratesinconsistent use of goodquality, credible andrelevant resources tosupport and developideas.
Demonstrates use ofcredible and relevantresources to support anddevelop ideas, but theseare not always explicit orwell developed.
Demonstrates use ofhigh quality, credible andrelevant resources tosupport and developideas.
Demonstrates use of goodquality, credible and relevantresources to support anddevelop arguments andstatements. Shows evidenceof wide scope within theorganisation for sourcingevidence
Demonstrates use of highquality, credible and relevantresources to support anddevelop arguments andposition statements. Showsevidence of wide scope withinand without the organisationfor sourcing evidence
Application ofknowledge topractise whileprovidingappropriate adviceto clients40 %
Limited understanding ofthe internal and externalbusiness environment.Lacks a global perspectivefor potential market andtrends.Uses a limited range ofinformation as the basis ofrecommended practice.
Understands the internaland external businessenvironment includingcommercial context andmarket forces.Understands local andglobal markets/trends.Accesses relevantinformation.Adequately utilisesinformation from a varietyof sources.Gathers/utilises competitorknowledge.
Understands the impactof financial, social,political, environmentalissues on the business.Demonstratescommercial awarenessof productdevelopment/serviceprovision.Understands thebusiness. Can prepareand presents businesscases/proposals..
Evaluates the impact offinancial, social, political,environmental issues on thebusiness; and where relevant,as they relate to differentcountries where the businessmay operate.Demonstratescommercialawareness of productdevelopment/serviceprovision and costrelationships.Understands the business andits risks. Can prepare andpresents businesscases/proposals.
Demonstrates culturalsensitivity. Analyses theimpact of financial, social,political, environmental issueson the business; and whererelevant, as they relate todifferent countries where thebusiness may operate.Critically demonstratescommercial awareness ofproduct development/serviceprovision and costrelationships. Holisticunderstanding of businessand its risks. Assesses theimpact of information andcommunication systems onthe operations of thebusiness.Critical understanding of theglobal market opportunitiesand competitive environment.

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