Corporate Liability

    Corporate Liability 1.What is the difference between the indoor management rule and the statutory assumptions?     Topic 1: The Australian Legal System and Legal Research Skills1. Explain the relationship between the concept of responsible government and the doctrine of separation of powers.2. Does the year 1066 hold any special significance with regards to the development of the common law? 3. Explain the following statement and give examples to demonstrate your comprehension: Each of the sources of law in Australia, with its federal system of government, can affect the way in which a business behaves. Topic 2: An Overview of the Law of Torts and Property Law1. Compare and contrast a joint tenancy and a tenancy in common. Would you advise a husband and wife to enter into a joint tenancy or a tenancy in common? Would you advise business partners to enter into a joint tenancy or a tenancy in common? 2. Compare and contrast old system title and Torrens title. Topic 3: An Overview of Contract Law1. Consider the following clause relating to future employment and with reference to legal authority, advise whether the clause is valid: a. You shall not, without prior written consent of ARN (which will not be unreasonably withheld), be directly or indirectly engaged, concerned or interested in any radio licence area in Armidale or an overlap radio licence area which encompasses a significant proportion of Armidale for the period of three months after the termination of this employment and you acknowledge that this restriction is reasonable in all the circumstances and is not greater than required to ensure the reasonable protection of the business of ARN. 2. Sharon purchased a new car from Penny & Co. In the contract of sale was the clause: ‘All conditions, warranties and liabilities implied by statute, common law or otherwise are hereby excluded.’ In fact, the car delivered to Sharon was not new but a demonstration model, and now she wishes to avoid the contract. Sharon argues that Penny & Co had broken the contract by providing her with a demonstration model, while Penny & Co relied on the exemption clause to exclude it from liability. Advise on the legal issues.       Topic 4: An Overview of Consumer Law and Competition Law1. Bruce bought a mower from Hank Hardware. Hank Hardware had bought it from Distributors Ltd, which had bought it from the assembler, Mower Ltd. The petrol engine was imported from Korea. The lawnmower exploded in Bruce’s front yard due to a faulty fuel tank. The explosion caused the following damage and injuries: (a) Ann, a pedestrian, suffered fractured legs and severe cuts. She was unable to work for three months; (b) Bruce, was burned. He was unable to work for six months and incurred heavy medical expenses. Bruce also had to replace the front windows and the front fence of his house; (c) Computer hard drives containing data supplied by Eric, which were being worked on by Bruce's wife Carol, were stored in the front room. They were destroyed by the explosion. What are the legal liabilities under the law of torts and the ACL? 2. Last month, the Times Advocate newspaper ran a special promotion. It had a huge headline stating ‘Free mobile phone for everyone who buys the Times Advocate on Friday (conditions apply).’ In small print on page three of the newspaper was the statement: ‘Conditions of free phone offer: Readers who accept a free phone will commit themselves to a 3 year contract with Temptus Communications Ltd for $50 per month plus call costs.’ Is the Times Advocate in breach of the ACL? AustPower Ltd and Switchy Ltd both manufacture electricity fuse boxes. One company trades only in New South Wales and the other trades only in South Australia. They exchange price lists and both agree to set identical prices for each of the various items they manufacture. Does such an agreement breach competition law? 3.Two large airline companies have for many years offered similar flight arrangements and services in a particular market. They also share airport terminal buildings, and at some airports share aircraft servicing facilities. A new company commences airline services in competition with the existing airlines. Neither of the existing airlines provides any assistance to or cooperation with the new airline. They also introduce large discounts on their prices (something they seldom did previously) and apply pressure on travel agents to promote their services and not to promote the services of the new airline. Discuss the legal implications.   Topic 5: Business Structures and the Law of Agency 1. Compare and contrast a sole trader, general partnership, and unincorporated joint venture. 2. . Outline the exceptions to the general rule that the receipt by an individual of a share in the profits of a firm is evidence that the person is a partner. 3. Outline the concept of agency. Describe how agency law underpins the general partnership structure. 4. Discuss the liability of a partner for the breach of a contract which had been entered into by another partner in the ordinary course of business of the firm. 5. Discuss the liability of a partner for wrongful acts or omissions (i.e. in tort as opposed to contract) committed by another partner in the ordinary course of business of the firm. 6. Lara Croft is a person who makes replicas of ancient Egyptian artefacts. Her work is of an extremely high standard and she sells regularly and repeatedly to a list of very rich private customers. Recently, Lara met Jack Voigt, a fellow person, on an expedition to Pharaoh Tut’s Tomb in central Egypt. Jack told Lara that he has been unable to produce any work because his studio was burnt down in a fire. Out of the goodness of her heart Lara offers space in her studio as an interim measure. She says: My studio is big enough for several master craft persons. Besides, we can share the expense of running the studio and work together to inspire each other to produce great works but I really don’t want to enter into a partnership. All goes well at the beginning and Jack and Lara collaborate on a number of works which they sell to Lara’s private customers. The sales from the collaborative works, after taking into account the costs of materials are split evenly. As a result of the shared collaboration, much of Jack’s individual work becomes known to Lara’s, hitherto, private customers. Jack’s individual works are enthusiastically received and within a short time, the sales of Jack’s works increase while Lara’s sales plummet proportionally. She eventually decides that she has had enough of Jack and informs him that she wishes to dissolve the business arrangement and calls for an account of all the profits. Jack seeks legal advice in respect of his legal relation with Lara and whether he is accountable to Lara for his individual profits.   Topic 6: The Functions and Structure of Companies 1.Bridget Jones, with the help of her three sisters, have been manufacturing designer diaries in her garage and supplying local gift shops. She recently had a range of her diaries featured in a high profile lifestyle show. Consequently, her diaries have become the latest ‘must-have’ accessory and they have now become much sought after. She expands her business by leasing a warehouse and moving her operations from her garage to the warehouse. Due to the increased availability, the sales from her diaries have skyrocketed. However she is extremely concerned at the increasing levels of debt her business is experiencing. She is also concerned that someone might sue for paper cuts. As such, she wishes to minimise her legal liability. Furthermore, she would like to restructure her business in order to allow her three sisters to more fully participate in the business and to allow each of them to share in the business’s profits. However, she is concerned that the sisters would squabble and she wishes to maintain control over the management of the business. Advise Bridget on the most appropriate kind of business structure to suit her needs and explain the advantages and disadvantages of each type of business structure.   Topic 7: Corporate Governance 1.In order to facilitate entry into the Australian market, the board of Stolichnaya believe the company should take over a local Australian spirits producer. Accordingly, Stolichnaya buys 20% of the shares in Smirk-off Ltd but has not yet lodged a formal takeover bid. Smirk-off Ltd is the manufacturer of a popular brand of vodka sold throughout Australia. The directors of Smirk-off are not happy about the potential takeover because they know that Stolichnaya has taken over other vodka companies and the first thing they do is to dismiss the entire board. Accordingly, the directors of Smirk-off have decided that it would be in the best interests of the company to fend off any potential takeover attempt by issuing a large allotment of shares to Cruiser Ltd which is a company owned by two of the directors of Smirk-off. Stolichnaya seeks legal advice in relation to the legality of the actions taken by Smirk-off’s directors. Topic 8: Member’s Rights1. What are the differences between statutory actions, members’ personal actions and derivative actions?2. Without notice, Bill (26% stock ownership), a director of an unlisted public company calls a general members meeting at which he and Owen (32% stock ownership) vote to remove Penny as a director and appoint Jane in her place. Bill and Owen then offer to buy Penny’s shares at a low price. Will s232 of the Corporation Act 2001 (Cth) assist Penny and if so, what orders can a court make under s233?3. Following on from 2 above, as an alternative to using s232, could Penny call upon s461? Are there grounds for winding up in this situation? What will happen to the company if it is wound up? 36 4. In what circumstances may a member rely on s236 of the Corporation Act 2001 (Cth)?