Explain, with proper legal reasoning, whether the company is liable to pay the claim

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Question - Boris signed a contract to work for Foodies Pty Ltd as an auditor. According to the terms of the contract, his compensation was $750 per week with a subsidy of $200 per week for legitimate business expenses. Boris and the company both knew that the amount specified for Boris' expenses would only be less than $75 per week, but a higher amount was stated to lower the amount of income tax that he will need to pay. Four months after, Boris' employment was terminated. He initiated action against the company for four weeks' unpaid wages but not his unpaid subsidy (also four weeks' worth). Explain, with proper legal reasoning, whether the company is liable to pay the claim?

Answer -

As per contract law, an agreement enforceable by law is known as a contract. Employment is a legal contract that binds both the parties. In the given scenario, Boris' employment has been terminated within four months of his employment. It was a written (expressed) contract with the terms of payment of auditor's compensation of $750 weekly for the services rendered by him and $200 weekly in relation to legitimate business expenses.

After the termination of the contract, Boris' is entitled to his unpaid wages for 4 months along with the amount of subsidy as signed by the company ($200). This is because during the implementation of the contract, the company was aware of the actual subsidy expenses but chose to misrepresent it on the contract and Boris signed the agreement.

In this case, it was the fault of the company and fraud on behalf of the company and the auditor to reduce the taxes to be paid by him. In this scenario, company will have to settle the claim of Boris for the unpaid wages for four weeks of his employment. This was also fraud conducted on behalf of the auditor to reduce his amount of taxes. However, because the company has already signed the contract with the auditor to pay him the compensation of $750 along with business expenses of $200, the company will be bound to adhere to the terms of the contract and not paying the same will lead to breach of the contract wherein Boris will get several modes for discharge of the contract.

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