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FDN121 Business Law Semester 2

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FDN121 Business Law Semester 2

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Course Code: FDN121
University: Southern New Hampshire University

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Country: United States


Topic 1: Contract Law (1,000 words)
A good understanding of contracts is an essential component of business law. A contract is a legally binding agreement between two or more persons or entities. There are several important issues that must be addressed to ensure that a contract is legally binding. Please explain these issues (including reference to relevant statute and case law). In your answer, you must mention the following topics:
(a) Verbal and written contracts
(b) The essential elements of a valid contract
(c) The terms and conditions of a contract
(d) Standard form contracts and unfair terms
(e) The methods of bringing a contract to an end
Topic 2: Structure of the Australian Legal System (1,000 words) Australia has a ‘common law’ system of law which is based on the legal traditions of Great Britain. Please provide an overview of the structure and responsibilities of various parts of the Australian legal system. In your answer, ensure that you make refence to:
(a) Federation and the Australian Constitution
(b) The roles of the Sovereign, the Governor General and the State Governors
(c) Statute law and judge-made law
(d) The roles and structure of the Commonwealth Parliament and State (and Territory) Parliaments
(e) The matters about which the Federal Parliament can make laws
(f) The various Federal and State (and Territory) Courts
Topic 3: The Law of Negligence in Australia (1,000 words)
Negligence is a failure to exercise appropriate care in certain circumstances. InAustralia, the law of negligence considers that a person should exercise reasonable care in their actions and take account of the potential harm that they might foreseeably cause to other people or property. Please provide an overview of the law of negligence in Australia (including reference to relevant case law). In your answer you should comment at length on the essential elements of a negligence claim.


Q (a) Verbal and written contracts
Contract Law of Australia is governed by the common law. There are many independent contracts arrangements that used the verbal contracts that will work only if there have been no disputes. An agreement of handshake is still to be a contract and can be enforced by the Court.
Written contracts are more consistent for both the parties than the verbal contracts. They have clearly set out the details that were agreed. The matters such as materials, payments, timeframes and the procedure that has been following in the event of a dispute that all can be set out in a contract.
The verbal contract and written contracts are both legally binding on the parties. The verbal contract is not as legally binding as the written contract. The verbal contract is difficult to prove whereas the written contract is written and therefore it becomes easy to prove (FindLawAustralia, 2018).
In Gordon v Macgregor (1909) 8 CLR 316 case, it is a written contract and the Gordan has succeeded the case that was the term of the agreement by the parties that the delivery of grift could not be commenced for the three months. In this, the oral term has also been regarded in the minimum grift of the logs (Australian Contract Law, 2018).
Q (b) The essential elements of a valid contract
The elements of a valid contract are:

Offer and Acceptance

It is an essential element of the contract. The contract cannot be made without an offer has been made by a party to the other party. The acceptance is required when an offer has been made by a party than only the contract will be enforceable.  


The consideration is the price that has been paid on the promise made by a party to another party. The price is not necessary to be in monetary it can be value. Consideration can be an interest, right or the benefit going for the one party or the loss that has been suffered by a party.

Intention to create legal relations

The agreement between the parties does not create the legal binding contract. The intention of the party is required to enter into a legal binding contract. The law will not be considered that what the parties have subjectively intended but it depends on the circumstances the person has reached into the contract.

Legal Capacity

There are people who are not allowed to enter into a valid contract that involves the people who have the mental impairment, minors, bankrupts, corporations (The person acting on the behalf of the company) and the prisoner (The Law Handbook, 2018).
Q(c) The terms and conditions of a contract  
There is not a specific format that a contract must follow. Therefore, that includes some terms that are either express or can be implied that is the basis of an agreement. The terms have outlined the contract warranties or the contract conditions. Contract conditions have been the fundamentals of the agreement and if these conditions do not met then one can seek for the compensation for the damages. Contract warranties are a lesser important terms than the fundamentals to the agreement. The contract will not be terminated if the warranties will are not be fulfilled but it may claim the compensation for the damages (Goldberger, 2016).
The contracts follow a structure but it is not limited such as:

The details of the parties to the contract
The contract duration
Description of the key terms that has used in the contract
Description of good or the services that the business has provided that includes the key deliverables.
The payments and date.
The key milestones and the key dates, requires insurance indemnity and the insurance provisions.
This guarantees the provisions that include the guarantees of a director (FindLawAustralia, 2018).  

Q (d) Standard form contracts and unfair terms
It is a contract that is pre-prepared in that the terms and conditions have been already been set with a little negotiation or maybe not among the parties. The standard form contracts are mostly designed or been printed and has the space to put the dates, names, signatures and for the other requirements.
Standard form contracts have some examples that are the employment contracts, agreements of insurance, agreements of lease and the financial agreements.
These contracts have been generally written for the benefitted in the interest of those from whom the contract has been offered. In the terms of the standard form contract the negotiation is sometimes possible. However, in the cases when the only option is left is either to take it or leave it (Trebilcock & Leng, 2006).
The terms that are unfair in accordance with the laws

The term that has to enable one party on the other hand restricts the another party to limit or avoid the obligations under the contract
The term that has allowed one party on the other hand restricts the another party to terminate the contract
The terms that will put the penalty on the one party but restrict the other party for terminating or breaching the contract
The terms that will enable the party to vary their terms but restrict the other (ACCC, 2018)

In Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 case, the unfair contract terms as the respondent was entered into a contract of 26,000 contracts and where the ACCC has alleged that contract was in the unfair terms under the section 24 of the Australian Consumer Law. ACCC has able to prove his case of the unfair terms (Federal Court of Australia, 2018).
Q (e) The methods of bringing a contract to an end

The contract can be end by the agreement when both the parties has agree to end the contract as before the compliance of the contract
The frustration can be the reason to end the contract when the circumstances are unforeseen that is outside the control of the party
When the condition of the contract has not been complied by the other party than the party can terminate the contract and ask for the damages or the compensation
The contract that allows one party to cancel or to terminate the contract by just giving a notice to the another party at any time (Australian Contract Law, 2018)

Negligence is the action in that failing to do something as the other person in his place would done that action in that circumstance and that causes the injuries to the other person and that results in the breach and will be liable for the damages (Stickley, 2016). Negligence is an expression of the law of tort. Four questions give rise by which the negligence is determined. Whether the defendant who been sued owe the person who has suffered the injury (plaintiff) a duty of care? Does the defendant have been found to be in a breach of the duty of care? Does the defendant have suffered any type of injury? Does the injury happen due to a breach of the duty of care?  
These are the factors must been satisfied to prove the negligence and this burden lies on the plaintiff.  The actions that create negligence for these essentials are required to be present in that are as follows:

Duty of Care

The first element of the negligence that whether the duty of care has the existence and also will be applied on the neighbourhood principle for example if it would also affect the other person in the same circumstances as the defendant will have the adverse effect on the plaintiff. The same effect will lie on than the duty of care lies by the plaintiff to the defendant. In Donoghue v Stevenson [1932] A.C. 562, [1932] UKHL 100, 1932 S.C. (H.L.) 31, 1932 S.L.T. 317, [1932] W.N. 139 case, in this the tort of negligence was developed (Latimer, 2012). The Donoghue was the plaintiff who has purchased the ginger beer from the Stevens who was the manufacturer of the beer. The beer was in an opaque bottle in that the contents were not clearly visible. Donoghue after consuming some beer she has poured the beer into the glass and she has found the decomposed snail that has remained in the beer. The plaintiff got the gastro-enteritis and the nervous shock that has been claimed by her due to the presence of the snail in the beer. In this case, the defendant owes a duty of care to the plaintiff. Thus, the case applies that whether the Stevenson owes the duty of care to the Donoghue. Thus the liability arises on Donoghue to prove the breach of duty by the Stevenson in taking the reasonable care and to show the damages had been caused to her due to the breach. The court has found Stevenson for the breach of the duty of care and held liable to pay the damages (Latimer, 2012).
Breach of Duty of Care
If it is proved from the first essential that, the duty of care is not there than the next step is to determine whether the duty of care is breached. The breach will be considered when the defendant has not followed the minimum standard of care that is required and the reasonable person would have provided standard care in the circumstances that has faced by the defendant. If the response is yes than the defendant has breached the duty of care. In Liverpool Catholic Club Ltd V Moorcase [2014] NSWCA 394, in this case, the defendant had been held liable for not considering the care as the risk was foreseen in this and the appeal of the case was granted


To determine the damages it is important or required to be the link between the damages that has been suffered by the plaintiff and the breach. The but for test would be applied by the Court in determining that whether the causes are involved in the said negligent act and would there been a contribution of the plaintiff in the duty of care breach. The actual burden of proof lies for the negligence lies on the plaintiff.  However, in some cases, it becomes difficult for the plaintiff to prove the negligence than the plaintiff lies on the maxim Res Ispa Loquitor that means the thing speaks for itself. This maxim does not make the defendant liable as the defendant still have the right to rebut the maxim by providing evidence that he acted due to the circumstances. In Oyston v St Patrick’s College [2011] NSWSC 269 case, it was alleged by the plaintiff that the reasonable care was not there by the school for the anti-bullying and therefore she has suffered the injury and the panic attacks, anxiety and the depression. The court held that the risk was foreseeable as it can be for seen by the school despite the school has published the policies regarding the anti-bullying and therefore school been found to be in the breach of duty of care and therefore school had been held liable for the damages.  
There are some examples of the actions of the negligence that is personal injury, false imprisonment, trespass to the person like assault and battery, medical negligence and the harassment. The other examples like trespass to the land by entering, placing or remaining any object and doing interference in the plaintiff’s land. Trespass of the goods of the plaintiff. The other nuisance, vicarious liability, breach of the statuary duty and the occupier’s liability (Stickley, 2016).
ACCC (2018). Unfair Contract Terms. Retrieved from: https://www.accc.gov.au/business/business-rights-protections/unfair-contract-terms
Australian Contract Law (2018). Gordon v Macgregor (1909) 8 CLR 316. Retrieved from: https://www.australiancontractlaw.com/cases/gordon.html
Donoghue v Stevenson [1932] A.C. 562, [1932] UKHL 100, 1932 S.C. (H.L.) 31, 1932 S.L.T. 317, [1932] W.N. 139
Federal Court of Australia (2018).  Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224. Retrieved from:  https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2017/2017fca1224
FindLaw Australia (2018). Is a verbal agreement legally binding?. Retrieved from: https://www.findlaw.com.au/articles/5626/is-a-verbal-agreement-legally-binding.aspx
Goldberger, J. (2016). An overview of developments in key areas of Australian contract law. Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia, 30(1), 17.
Gordon v Macgregor (1909) 8 CLR 316
Latimer, P. (2012). Australian Business Law 2012. Australia: CCH Australia Limited
Liverpool Catholic Club Ltd V Moorcase [2014] NSWCA 394
Oyston v St Patrick’s College [2011] NSWSC 269
Stickley, A. P. (2016). Australian torts law. LexisNexis Butterworths.
The Law Handbook (2018). Elements of a contract. Retrieved from: https://www.lawhandbook.org.au/2018_07_01_03_elements_of_a_contract/
Trebilcock, M., & Leng, J. (2006). The role of formal contract law and enforcement in economic development. Va. L. Rev., 92, 1517.
Van Harten, G., Heckman, G., Mullan, D., & Promislow, J. (2015). Administrative Law: Cases, Text, and Materials. Emond Montgomery Publications.

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