Assignment on HI6027 Business & Corporations encompasses regulations &laws which direct towards enforcement of rules

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HI6027 Business & Corporations



Contract law basically encompasses regulations and laws which are directed towards enforcement of some specific promises. In Australia, this law is fundamentally governed by common law however increasingly statutes supplement common law of the contract focusing mainly on consumer protection area. Contract law includes elements such as contractual formation, content, and scope of the contract, avoidance of the contractual obligations, Remedies for breach of contract and termination as well as the performance of the contracts. Corporation's law of Australia has a legal structure that comprises a particular National statute which is Corporations’ act 2001. 



(a) John is bound by a kind of permanent employment contract for purchasing tools, however, he has a training contract with his employer of plumbing. However, he has made a contract with the plumbing entrepreneur about receiving the training after his schooling finishes off. Therefore, in this case, John has already bought a specific kit of tools for the plumbing apprenticeship that will start as soon as he finishes his school in the next 6 months. However, being at the school John quickly learns about Stock Market as well as invests in the Apptools Limited together with Buzz Tools Limited. The training contract of John and the plumbing employer was about to start after his school completes. This signifies that John did not hold any kind of duty of care towards the plumbing apprenticeship during that particular time period until and unless his school finishes.

(b) No, he cannot enforce the contract for gaining profit from the sale of the Apptools shares because he is only 16 and shall be considered as a minor. He is incapable of contracting with any party. Also, soon after the liquidation of Buzz Tools where John has invested his money, he may not gain his share of profit from the company. Since he went into a contract without the consent of court then it is an offense under Australian consumer law. This shall not include any kind of breach of Duty as well and John can easily gain the profit on money that was partly paid up. In this context, the defendant is John whereas the plaintiff is the employer of plumbing apprenticeship.

(c) In this case, the liquidator of Buzz tools now wants to recover money which was owned over shares of Bosch tools from John. This is absolutely appropriate and there is a full right of the liquidator to take such action. 


Within a contract, both of the parties are legally obliged for carrying out his or her part of the bargain and the party whoever fails to undertake these can be considered in the breach of contract. Any Court may require that the persons for putting things correctly either by meeting the terms of the contract or by compensating the losses or damages. An example of contract law case is winter versus Nemeth [2018] NSWSC 644 . Four elements necessary to be in a valid contract is an offer, acceptance, the intention of creating a legal relationship and consideration for that offer.

For John, the contract with plumbing apprenticeship is quite valid as it constitutes all of the four mentioned elements. 

Defendant in this kind of cases is highly responsible for the harms or damages that he or she could have out looked by his or her actions. However, if, the defendant causes damages which are outside the scope and possibility of risks for sin by the defendant, the plaintiff shall not be able to prove that actions of defendant where proximate causes of plaintiffs damages. 


a) In this context, another element of contract can be explained which is the breach of Duty. This depicts that the plaintiff must prove that the defendant has breached his duty of care to the plaintiff. The defendant can breach the contract by not exercising reasonable care in order to fulfill the duty. Here, John has not conducted any breach of his duty towards the apprenticeship because he started investing in the stock market while being at the school and not after its completion. Considering this case there was no as such cause where John could harm the plumbing employer because whatever and however he acted was before the terms of contract with the apprenticeship . 

b) The other element to be discussed is the damages. For any contract to form, both parties should have a contractual capacity. When any person whoever lack this capacity to enter into a contract then the contract cannot be enforceable against them. Therefore, using the profit from investing on Apptools limited, he cannot enforce the contract. Only if the court provides consent for John to make contract then it would be legally binding according to Section 6 of Minors Contracts Act of 1978 (SA) . Another important thing that comes in front is that a minor who is under the age of 18 years is not legally eligible for buying stocks and shares by opening his or her account . A usual rule under Australian common law can be stated that any contract formed by the minor can be voidable. Since John has involved his broker and opens to the account of buying and selling shares, therefore, his broker is also involved equally in the illegal online business.

c) This is because when Buzz tools were in action John has invested his money on those shares. In fact, after the liquidation of the venture, John was half paid off the investment he already made and therefore it is fully dependent upon liquidator whether he can sue the money from the liquidator or owner. 


Therefore, it can be stated from the above case that the contract can be formed only when there is an agreement between the two parties and a consideration. A breach of contract is also discussed where John invested in Buzz tools and it resulted in the liquidation of the company.



In this scenario, Poh and Adam are 2 of the young entrepreneurs who are aiming to form a small proprietary Limited association for operating a restaurant. Name of the company was decided to be Master Plate Private Limited. On 22nd of February Adam had entered into the contract with the Irish linen Limited for purchasing 18 monogrammed tablecloths. He has executed this contract and the name of the master plate Private Limited. On 24th of the February proposed company has been registered however it did not adopt the constitution. Adam as well as Poh both of them undertook 50% of issued capital and therefore appointed as the directors. As a result of the dispute between Poh and Adam regarding this contract with the Irish linen Limited it was not ratified by the Master Plate till 30th of March. On 1st of the actual item has ordered the restaurant quality cutlery from the Carvers Private Limited where Adam has a fixed company seal for the contract as well as signs over it. Therefore, Carvers Private Limited is entitled to make an assumption that a master plate is a trustworthy company where the contracts made with are fixed and written contract. Therefore, every element of the contract shall be met by both the parties. It has also observed that they will be paid for providing superior quality cutlery commodities to master plate owned by Adam and Poh. However, they should have looked into the fact that the contract signed with Irish linen Limited was not yet ratified by the master plate. Hereby, Carvers Private Limited can be considered as the plaintiff however Adam and Poh are the defendants. This was, therefore, a case of negligence on the basis of Carvers Private Limited as they did not properly go through the contractual agreements of Master plate.  

In order to understand the case of Irish linen Limited and master plate, it is important to once again go through the IRAC method which includes the four different yet major components in a case.



In the case law of Strickland v Rocla Concrete Pipes Ltd (1971), laws along with the proper connection to trading activities under constitutional corporations can be considered to be valid.  

According to the civil liability act of 1936, under the Australian constitution, any kind of breach of Duty has a compensatory action towards the damages that it causes . Defendant in this type of cases is responsible for the harms that he or she could have neglected by her or his actions. According to corporations act of Australia established in 2001, no particular business can use proprietary Limited at the end of its name before registration of it. This has resulted in misinterpretation of Irish linen Limited while signing the contract . 

If the dependent cause some damages or injury which are the outside boundary of risks forcing by the defendant and plaintiff cannot everything that actions of dependence where proximate causes of such damages. Here the proximate cause can be ratification of the contract because the defendant Adam and Poh who is the owner of Master plates could have foreseen that Irish linen Limited shall be supplying their tablecloths to the company after 30th March. 

It is to be noted that before starting a business or trading of services and goods within Australia the business must have the Australian business number or ABN. In order to set up a proprietary business, Master Plate must have gone through some necessary steps such as: Deciding for setting up the company for themselves or any other service provider, choosing a company name, choosing up the share structure, deciding for the shareholders, establishing company rules and norms, determining the territory of registration, nominating principal place of the business as well as completing relevant paper works or online forms . 

Before making any kind of investment or contract, Irish linen Limited must have ensured that master plate is registered according to corporations act of 2001 and with Australian securities and investment Commission permits. 


Corporations act can be regarded as fundamental legislation that regulates almost every company within Australia. It also regulates some matters like operation and formation of companies fundraising and takeovers as well as duties of the officers. In this case, Irish Linen Limited comes under corporations and section 45 (a) of corporations act of 2001 defines the proprietary Limited organisations . On the other hand, according to Section 144 of corporations act, any organisation must display the name properly before doing any business but with reference to the case, it can be stated that before proper registration and commencement of business, Adam and Poh have already used the name of Master plate for their business. Once the business gets registered as per section 165 of corporations act any entrepreneur should use ‘Pty Ltd’ at the end of his/her business name. 

These are the physical damages are injurious which are caused to any kind of property or individual. Failure of incorporating reasonable care can resultant consequences such as actual damages to the property of the person towards whom the defendant owes a care duty. Considering the case scenario damage that is occurred to Irish linen Limited is in terms of money for which master plate is liable to compensate. Here apology is not admissible under any kind of civil proceeding as per section 74[2] of civil liability act of 1936 . Therefore, proper compensation in terms of money is needed and can be claimed by the Irish linen Limited. Claims for these damages which have risen out of the breach basically proceed in County Court or Supreme Court however occasionally are issued under magistrates Court. Adam and Poh are therefore responsible for the breach of contract that has been undertaken with Irish linen Limited. 


Therefore from the above two scenarios where is a clear conception of contract and corporations law and the IRAC method to be used in cases of negligence. The advantage of being a proprietary limited company is that the regulatory burden is comparatively lower than it is in the public company. Reports which are needed to be provided to shareholders and regulated every year must be more limited in this kind of company. It is observed that a plaintiff who can bring any action should show that the defendant has been liable for the actual injury and serves the duty of care together with being negligent. Courts can consider relevant and relatable circumstances like contributory negligence and consent. Amount of the damages basically depends on the seriousness of the injury and therefore the expenses are supposed to be recovered.

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