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CLWM 4000 Business & Corporations Law Assignment Solution
Introduction to the Case
The Case is between the two parties who are husband and wife named Edward and Jane having different types of businesses running by both of them individually. Jane is having business of coffee shop that is bought by her two years back and the shop is redecorated by her husband Edward. The cost of redecoration was $40,000 that was paid by the Jane to Edward within a year on the basis of an oral agreement. After sometime a shop next door was going to sell, Jane had decided to buy that shop and she has approached to bank, but bank has rejected the appeal to finance for the new shop since she has not yet paid the $40000 to her husband. Jane then talks to her husband Edward and make him ready for just $10000 to be paid at the time and make a written agreement of no dues left with him. Jane then show the agreement to the bank and the bank has financed her for the new shop. Jane this time has redecorated the shop with another person named Max and paid him $25000. It was that not expected from the Edward as he was thinking that new shop would also be redecorated by him. After sometime Jane has decided to break her marriage with Edward and would establish relationship with Max. Now, Edward has decided to sue for the remaining amount of redecoration from Jane.
Legal position of the Parties to the case
Edward would be able to claim his remaining amount only on the basis of showing the evidential proofs of the cost incurred at the redecoration made by him. Since there was an oral agreement of payment of entire amount within a year between both the parties no legal action could take on the breach of agreement. Under the legal consideration the case could be kept under the fraud that is guided with the Fraud Act of 2006 under the UK law. Fraud is made by Jane of not paying the entire cost of redecoration to her husband Edward, but this could be proved only when Edward is able to present evidence of total cost incurred.
Strong position for the Jane
Jane could be in a strong position if Edward fails to present evidence proof for the cost he has incurred on redecoration. Since, Jane has entered into an oral agreement to payment of $40000 within a year and no oral agreement has legal enforcement in the eyes of law. Although, Jane is in a strong position since she has made oral agreement with Edward and after that she has made full and final settlement in just $10000. However, she could be liable under the fraud Act if Edward present the proof of total costing and if the bank come with Edward and proved that it has rejected the loaning to Jane first since she has not paid the amount of $40000 due to her husband.
Strong Position for Edward
Edward could be in a strong position and would be able to claim for remaining amount, as earlier described in the above sections, only on the presentation of vouchers, costing of material and labor charges and other things that could prove that he has incurred a cost of $40000 on redecoration. If Edward would be able to do this he would make the difference and Jane could be liable under the Fraud Act of 2006 enforceable in UK.
Legal bindings for Jane under the Fraud Act, 2006
A person who is guilty of fraud is liable—
- For a person who is found guilty of fraud would get imprisonment for a term of 12 months or fine that statutory maximum or both
- For a person who is guilty of indictment under fraud act, 2006 would get imprisonment for a period of 10 years or fine or both.
Another provision under which Jane could become liable come under the purview of u/s 11 of the fraud Act, 2006 i.e. obtaining of services dishonestly by the any of the parties. The main provision of the sec. is as follows:
Obtaining services dishonestly
- Any person would be liable of an offence under this section if he/she obtains any services by
- A dishonest act,
- Making a breach to the subsection (2) of the Act.
- If any payment is not being paid by the party by himself/herself or by any other person on behalf.
- If he/she has obtained any service in full or part of it and making no payment or part of it.
- Any person become guilty of any of the act defined in Subsection (1) would be liable of:
- Imprisonment for a period not exceeding to 12 months and fine not exceeding to statutory limits or both.
- Imprisonment for the period not exceeding to 5 years or to the fine or both, if any indictment is found by any of the party.
From the findings over the discussion made to the case provided above it could be said that Edward who is running a business of refitting and also husband of Jane is in a weak position. The reason behind this is that he has no any document that support he has not being paid in full for the cost he has incurred and due to his wife Jane. Alternatively, he has made agreement of full and final settlement in $10000 on behalf of entire payment due. If Jane has come with that written agreement then, he has not left with any stand to claim for his dues. However, vouchers of cost incurred on material and labor could help him if he has so.
As in this case, we know that Jean has been a regular shopper to a supermarket chain to shop every week or even twice a week sometimes. She was very well aware of the selves and positions of goods in the store. However, Jean has fallen on bunch of grapes in aisle 3 those were not put in proper place. Due to this she as broken her ankles and suffered a lot. She has blamed store manager for this and demanded damaging cost.
Wrongs and Other Acts (Law of Negligence) Act 2003 Act No. 102/2003
Under this act, negligence means any failure for not fulfilling duties or responsible care. Any person if gets injured with pre-natal injury; psychological or psychiatric injury; disease; and aggravation, acceleration or recurrence of an injury or disease, he/she becomes liable for compensations or get damages. Any physical harm, damage to property and monetary loss comes under liability for the case of negligence. Damages can be in the form of monetary compensation to injured party.
Liability for negligence
Negligence is considered as a civil matter and can’t be treated as criminal matter. Any losses occurred due to negligence can be claimed for compensation provided with proper justification. Victim has to prove that other party has made an attempt of negligence by not performing ‘ duty of care’ . it is a breach of such duty. Due to such breach, if one gets injured or harmed or even it can be foreseeable, victim has a positive side in the case. After proving physical loss or injury due to negligence, victim will be awarded appropriate damages.
Liability of Super Market for Negligence
In the case, Jean was physically hurt because of negligence with respect to putting fruits in the proper manner. Grapes are normally found in the fruit section of the store and the store was not sure how the grapes got there or how long they had been there. As per the store manager, he was not aware of such negligence or how fruits were there, it is clear that this is a case of negligence. Duty of care was not performed in the proper manner in the store. As we all know that supermarket is place where shoppers come in huge number and such kind of negligence can result in customer inconvenience.
Consequently, Jean has broken her ankles and it was very painful and resulted in economic loss as well. She has to undergo for a surgery with complete one month rest. This resulted in loss of money and work leave. Ultimately, it was a complete health and economic loss to her. Therefore, she has a positive side to sue the store to get damages for the case of negligence. Just because of not performing duties of care, she has to suffer such incidents. Even store manager indicated that there were a number of spillages every week in the aisles in this store. Therefore, super market becomes liable to compensate for all the damages to Jean as per Law of Negligence, Act 2003.
Bob purchased a woollen jumper from Clothes Galore in Adelaide. The woollen jumper was made by Southern Knitting Mills in their Victorian factory. As a result of wearing the woollen jumper without first washing it, he contracted dermatitis as the jumper contained bisulphite of soda, which it was found had been left in the wool during the manufacturing process. The bisulphite of soda couldn’t be seen on a reasonable inspection by either the retailer or the buyer. Consequently, Bob is looking for remedies under Australian Consumer Law.
Australian Consumer Law
Guarantee as to acceptable quality Under Section 54
Australian Consumer Law has given some rights and protection to consumers if the product is purchased from Australian suppliers, importers or manufacturers (Australian Consumer Law, 2010). Section 54 subsection 2 has given protection to consumers under goods of acceptable quality. As per this section, purchased goods are considered of acceptable quality if they are meet the purpose of consumer’s buying, meet out requirement in app appearance and finish; free from any defects, safe in use or consumption and durable. Any product if covers all these points are considered of products with acceptable quality.
If a consumer is completely aware of the standards of the product and acquainted with the state and condition of goods, he is considered as the reasonable consumer’ and would consider product as the acceptable product. However, sometimes it might happen that goods have some hidden defects those are not visible at the first sight until it affects to the purpose or buyer by any mean.
There can be several issues in determining goods of acceptable quality. If there is any defect and conveyed by the supplier before purchases, few customers go for purchases at low price. such kind of products are also considered as the seconds those are having minor defects or problems in the product quality.
Southern Knitting Mills not meeting up products of acceptable quality
For such manufacturing companies, using chemicals or bisulphite of soda in their products it is the most important duty to remove its affects from the products before sending it to retail stores. Manufacturing process of woollen jumper includes the use of bisulphite of soda in order to provide longevity and make the product safe from bacteria. However before the final delivery to store, quality check would have been done so that end users won’t face any problem.
Manager from the manufacturing process has rechecked the status of this issue and found that it could not be seen on a reasonable inspection.
Availability of remedies for Bob as per ACL
As discussed, product received Bob has not covered the requirement of products with acceptable quality and breached the section 54 (2), Bob has the right to ask for damages occurred due to ignorance of proper inspection at the manufacturing process. At the store, it is very difficult for a consumer to check for such kind of chemical use or ignorance by manufacturers. Also, as the product was new, one generally don’t wash it before using it. Now, bob has contracted dermatitis as the jumper contained bisulphite of soda, he is certainly liable to get remedies from Southern Knitting Mills.
- The Australian Consumer Law, A guide to provisions, 2010
- Wrongs and Other Acts (Law of Negligence) Act 2003, Victorian Legislation and Parliamentary Document
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