Corporate Law Essay: Dali Painting Contract Breach

Executive Summary

The report has focused on corporate law for breach of contract between Jen and her client over Dali paintings. There are several laws which are applied to this case in order to resolve the conflict under legitimate Australian Law. According to Australian Consumer Law (ACL), fair trading is necessary to maintain within a business that is not properly followed that arose a range of problems for both the parties. It has also focused on liability of Master Plate to pay for tablecloths to Irish Linen Ltd and assumption of Carvers Pty Ltd for sealing the deal with Master Plate. Product liability laws deal with legislation relating to consumer protection. The law makes imposition of statutory obligation that offers strict liability for statutory guarantee and safety defect on the manufacturer. In order to offer transparent system of application, it is crucial to action on implementation of industry-specific legislation.

Part A: Contract law question

Issue

Corporate law for breach of contract between Jen and her client over Dali paintings

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Rule

Competition and Consumer Act 2010: The client can successfully get out of contract by applying legitimate Australian law and legislation. According to Competition and Consumer Act 2010, the client can claim Jan under counterfeiting that enforces part to cancel an agreement. Under section 278 (1), the client can make a counter-claim for relevant liabilities (Legislation.gov.au, 2019).

Law of Negligence and Limitation of Liabilities Act 2008: On the contrary, the Law of Negligence and Limitation of Liabilities Act 2008 are also applied against the client due to negligence in agreement. As per the law of Negligence, the agreement can be argued or counter-claim under a duty of care in which client has not gone through legitimate process or policy before involving into the agreement.

Analysis

Jen owns a Dali painting that she thinks is original and displayed in her office. One of her clients has seen the painting and offers an attractive amount that is 50,000 dollar. After some days, the client came to know that the painting is not genuine during appraised for insurance purposes. By comparing the original price in market, the client came to know that a very good price of this painting is about only 1500 dollar (Erdiaw-Kwasie and Alam, 2016). Hence, the client can take a legal action Jen under Australian Law and Legislation for successfully get out of the contract along with penalty for counterfeiting.

There are several laws and legislation that can be applied to this case in order to resolve the conflict under legitimate Australian Law. According to Australian Consumer Law (ACL), fair trading is necessary to maintain within a business that is not properly followed that arose a range of problems for both the parties. Jan has to pay some capital as a penalty about 1000 dollar due to involve in counterfeiting under Competition and Consumer Act 2010. By applying this law in a case study, an agreement can be cancelled an under unfair contract terms and unsolicited consumer agreement of ACL. In arguing with this legislation, Limitation of Liabilities Act 2008 is also applied that implies that the client has not followed a legal and legitimate process before involving into an agreement as per the Duty of care under negligence law (Choice.com.au, 2019). By applying this law in this case, it is asserted that the client is not totally liable to get total money that he offers to Jan that is 50,000 dollar. As suggested by Liu (2017), these laws and legislation support the client to get out of the agreement positively. Similarly, Competition and Consumer Act under Section 45 stated that an agreement cannot be applicable in case if any parties are trying to gain maximum profit against the agreement. In regard to Jan, it is observed that she is unaware of the authenticity of a painting. Under division 3 of Law of Negligence 2008, the client has to bear some amount cost due to breach of liabilities and factual causation in order to get out from the agreement successfully (Law.unimelb.edu.au, 2019). These law and legislation are required to implement vigilantly to make sure the client justices under legitimate Australian law and regulation.

In the case of O'Brien v Dawson (1942), there had breach of contract law. In the case there was termination of contract was done by the offender and court had penalized for breach of law in the case. There was further declaration of common law perspective which can be integrated into the termination of contract due to breach. In case of Jen, trusts of the client were violated. However, the seller in this case can claim that there was lack of knowledge about the Dali paintings. Proper process of appraisal can be required for insurance purpose (Mees and Smith, 2019). It was later found that the painting only costs $1500 rather than $50,000. Thus, according to contract law, there is enough scope of the client to get out of this deal. There is further proof of insurance company that this Dali painting is not genuine. There can be aspect of making the argument in present case for providing sufficient advice. The client has to be given opportunity to get out of the deal through proper way of negotiation. The case of BURTON -v- JACKMAN (2014) deals with breach of contract in terms of product damages. The defendant in the case argued that there were damages in product which is against their contract. Thus, it is crucial that adequate compensation is made for the case of law breach.

Conclusion

The case of Jen and her client can be considered in the light of the breach of contract law. There was provision in the law that states lack of knowledge about the Dali paintings. Thus, Jen cannot be blamed directly for breach of contract in the present case. There needs to be association of insurance for determination of authenticity of the painting. Competition and Consumer Act 2010 can be invoked in the present case for proper compensation. It is further important to determine aspect of cost of the painting. Collection of the painting has been made by Jen without proper knowledge about authenticity of the painting. Thus, the present case can be considered in the light of managing lack of trust scenario, as stated in the case. Requirement of original product can be determined through insurance purpose. Further, advice can be sought from court cases to determine the amount of compensation. Client of Jen can show proof of insurance appraisal procedure for revealing that there is lack of genuineness in the painting. Thus, the client of Jen has considerable advantage in getting out of this contract. According to Law of Negligence and Limitation of Liabilities Act 2008, there was negligence on the part of Jen, as she had not verified authenticity of the painting. Thus, proper compensation has to be offered to client, as there is aspect of negligence on the part of Jen.

Reference list

1. Choice.com.au (2019), Limitation of Liabilities Act 2008, Available From: https://www.choice.com.au/shopping/online-shopping/buying-online/articles/counterfeit-goods [Accessed on 14 May 2019]
2. Erdiaw-Kwasie, M.O. and Alam, K., 2016. Towards understanding digital divide in rural partnerships and development: A framework and evidence from rural Australia. Journal of Rural Studies, 43, pp.214-224. Available at: https://apo.org.au/sites/default/files/resource-files/2015/12/apo-nid137851-1170171.pdf [Accessed 12/5/19]
3. Law.unimelb.edu.au (2019), Australian Consumer Law (ACL), Available From https://law.unimelb.edu.au/data/assets/pdf_file/0005/2877782/AGLC3.pdf [Accessed on 14 May 2019]
4. Legislation.gov.au (2019), Competition and Consumer Act 2010, Available From: https://www.legislation.gov.au/Details/C2013C00620/Html/Volume_3#_Toc368657561 [Accessed on 14 May 2019]
5. Liu, S., 2017. Globalization as boundary-blurring: international and local law firms in China’s corporate law market. In Law and the Market Economy in China (pp. 231-264). Routledge. Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1015.6383&rep=rep1&type=pdf [Accessed 12/5/19]
6. Mees, B. and Smith, S.A., 2019. Corporate governance reform in Australia: a new institutional approach. British Journal of Management, 30(1), pp.75-89. Available at: https://onlinelibrary.wiley.com/doi/pdf/10.1111/1467-8551.12298 [Accessed 12/5/19]

Part B: Corporate law question

Issue

Liability of Master Plate to pay for tablecloths to Irish Linen Ltd and assumption of Carvers Pty Ltd for sealing the deal with Master Plate.

Rule

Product liability act 2018:

Product liability laws deal with legislation relating to consumer protection. The law makes imposition of statutory obligation that offers strict liability for statutory guarantee and safety defect on the manufacturer. In order to offer transparent system of application, it is crucial to action on implementation of industry-specific legislation. Claim of product liability deals with integration of liability regime. Fair practice of trading further can be made with utilisation of this liability law. In the business deal, parties involved are free for the contract agreement and implication can be made on common statute or common law.

Litigation & Dispute Resolution 2019

Purposes of the act include illegal activities in business deal. Protection in case of business deal can be considered for analysis of risk activities. Participation of inherent risky activities can further be considered for avoidance of mental harm. There can be amendment of the law for ensuring that significant risk factors are eliminated successfully. The litigation and dispute resolution act can be considered for determination of analysing significant risks for ensuring that sufficient numbers of tablecloths are provided.

Analysis

In the case two young entrepreneurs Adam and Poh decided to enter into the business of restaurant. They named the company “Master Plate Pty Ltd”. There was an agreement between Irish Linen Ltd and Master Plate Pty Ltd for supplying tablecloths. The company did not have constitution and both Adam and Poh have equal representation in company’s share. Suddenly a dispute occurs between Master Plate and Irish Linen. Thus, that contract was not ratified by the company. On the contrary, Adam entered into agreement with Carvers Pty Ltd. for sealing contract. Thus, the case seeks to analyse assumption of Carvers Pty Ltd. However, Irish Linen offered tablecloths to the company but no payment was made. According to Lazar (2018), there needs to be determination of liability of payment.

In the case, there was lack of disagreement between Irish Linen and master plate. However, agreement was made earlier. Thus, there is responsibility of the company of Ada and Poh to offer proper aspect of compensation. In the case of Clubb v Edwards Preston v Avery (2019), there is implication of ensuring final deal of law. In the case, the court has given verdict on the basis of final deal made between two companies. According to earlier agreement the company was supposed to get tablecloths from Irish LInen. Lack of formal agreement or ratification offers opportunity to master Plate, as the contract was not made (Rajapakse, 2015). The concerned contract law in the context of Australia can be applicable for providing guidance to present cases. Irish Linen can claim breach of contract as the agreement was not maintained by the company of two young entrepreneurs.

Assumption of Carvers Pty Ltd for sealing deal with Master Plate

Determination of appropriate case in legal consideration can be taken into account for sealing the contract deal. Product liability Act 2018 can be applied in the present case, as Master Plate has signed the deal with Carvers. There is further assumed that the current law can be used for buying products from Carvers. There can be association of entitlement which can be used for making a transparent system of law for signing this deal. Both Adam and Poh are responsible for ensuring that assumption is made on the basis of improving contract law (Giancaspro, 2017). The Irish company can take a view from other organisation for determination of improved contract in the present scenario of law. Entitlement of contract for Adam can violate basic principle of agreement. However, no formal and final deal was made between Carvers and Adam. This has enabled poor implementation of present contract law in partnership approach. In case of dispute occurs between Irish Linen and Master Plate over purchasing product, Product liability Act 2018 can be invoked. The purpose of this law is to offer protection to both the parties involved in the agreement. Exclusive jurisdiction further can be practiced for prevention of negligence during sealing a deal. Deal between Carvers and Master Plate can be fostered for bringing a better perspective of contract in the present case.

Liability of master Plate to pay for tablecloths to Irish Linen Ltd

On 1st May, Irish Linen delivered tablecloths to Master Plate; however, payment was not made for this deal. There can be further assumption in that deal to sign it with supplying tablecloths for assumption to offer better payment method. The deal can be considered in the perspective of Litigation & Dispute Resolution 2019. There can be determination of deal that can help make better assumption for proper way of entitlement. As suggested by Manderson et al. (2015), the federal system in Australia concerned with determination of jurisdiction that can be helpful for determination of jurisdiction. There is legal dispute, as no payment was made for providing tablecloths to Master Plate. Maynard v MoneyGram Payment Systems Inc (2018) case can be considered for process of judicial payment method to the desired applicants. Application of tribunal laws further requires to be initiated for integration of reasonable standard in this present case.

Conclusion

It can be concluded the dispute of the company of Adam and Poh with Irish Linen has to be resolved through existing legal system in Australia. Invocation of Litigation & Dispute Resolution 2019 can further be crucial to resolution of payment issues between Irish Linen and Master Plate. There is further case of ratification of law which cannot be done between the two companies. Disagreement with several issues ultimately leads to increased disputes between two companies. There is further entitlement of Carvers Pty Ltd for sealing the deal. Innovative procedure of dispute resolution can be adopted in the present scenario of managing the cases. Furthermore, option of mutual agreement between two parties in the case Master Plate and Irish Linen can be explored for resolution of payment issues.

Reference list

1. Giancaspro, M., 2017. Is a ‘smart contract’really a smart idea? Insights from a legal perspective. Computer law & security review, 33(6), pp.825-835. Available at: https://www.researchgate.net/profile/Mark_Giancaspro/publication/317354410_Is_a_%27smart_contract%27_really_a_smart_idea_Insights_from_a_legal_perspective/links/5c2d5891a6fdccfc707902d8/Is-a-smart-contract-really-a-smart-idea-Insights-from-a-legal-perspective.pdf [Accessed 4/5/19]
2. Lazar, A., 2018. Home-Sharing in South Australia: Protecting the Rights of Hosts, Guests, and Neighbours. UniSA Student Law Review, 3. Available at: https://www.ojs.unisa.edu.au/index.php/uslr/article/download/1494/929 [Accessed 3/5/19]
3. Manderson, A., Jefferies, M. and Brewer, G., 2015. Building information modelling and standardised construction contracts: a content analysis of the GC21 contract. Construction Economics and Building, 15(3), pp.72-84. Available at: https://epress.lib.uts.edu.au/journals/index.php/AJCEB/article/view/4608/4942 [Accessed 2/5/19]
4. Rajapakse, P.J., 2016. Contamination of food and drinks: Product liability in Australia. Deakin L. Rev., 21, p.45. Available at: https://ojs.deakin.edu.au/index.php/dlr/article/viewFile/718/664 [Accessed 1/5/19]