Assignment Topics for Business and Corporation Law

Question One: 10 marks, 1000 words

Terry Tyler is a famous financial adviser, who hosts a popular morning segment on a national radio station. He has a number of bestselling books in the area of financial investment and is well-known for his expertise in the sector. 

In early January 2018, Terry unexpectedly made a substantial amount of money on the cryptocurrency exchange. He subsequently decided that he should reinvest this money. Later that month, Terry bumps into his cousin Susan at their grandparents 60th wedding anniversary, which was held at a lavish Port Melbourne reception centre. While conversing about the latest financial trends, Terry tells Susan that he is looking to invest in a property with solid rental returns. Susan, intrigued by this asked Terry, ‘Oh, you are looking for an investment property? I am not selling a house, but I do have some gold that I am hoping to sell. Would you be interested?’ Terry was unsure at first but warmed to the idea when Susan started talking about how much gold had valued over the past 12 months. He asks Susan if she could write to him by post with the lowest amount that she would be willing to accept. 

On 27 January, Susan sends a letter to Terry explaining that she would sell him 100 gold bars, weighing 1kg each, for no less than $450,000. Susan further explained in her letter that this was well below the market value of the gold, which had been independently valued at approximately $550,000. On 29 January, Susan was approached by Renzo Rocco, who offers to purchase her gold for $600,000. She writes to Terry on 30 January stating that she no longer wished to sell the gold to him for $450,000 and that the deal was off.  

On 3 February, Terry receives Susan’s initial letter dated 27 January and immediately writes a letter stating, ‘I hereby accept your offer to purchase 100 gold bars, weighing 1kg each, for the asking price of $450,000. Please find enclosed $45,000 as deposit.’ He then posted the letter that same day (3 February). 

Terry, thrilled with the price of the purchase, decided to go out with some friends to celebrate. Whilst at the local pub, Terry consumed a number of alcoholic cocktails and consequently became quite intoxicated. Realising that he had drank too much, Terry decides to leave the pub and stops in at the supermarket to pick up some midnight snacks. While in the snack aisle, Terry was approached by Kevin, a family friend. The two got into discussion about various things. At one point, Kevin said, ‘Terry, listen I’ve been meaning to ask you about an investment. I’ve heard about this new technology company, Ziro Ltd. They are about to issue a prospectus. I am thinking about re-mortgaging the family home and investing $150,000 in the initial offering. What do you reckon? Early retirement?’ Terry wasn’t feeling particularly well at this stage from all of the alcohol that he had consumed. He responded, ‘Yeah… Ziro looks like a solid investment. Like a rock, you know… solid. They, they look like they will do well. Kevin, I’d buy a bunch of their shares too if I hadn’t just spent all of my money on gold bars.’ Soon after, Kevin eagerly invests.

Terry awoke the next day (4 February) with a sore head and a letter dated 30 January from Susan. Terry was shocked to read that Susan no longer wished to sell him the gold and that she has received a better offer. He immediately called Susan to explain that it was too late for her to renege on the deal now as he had already sent his acceptance. Susan responded, ‘Well, I haven’t received anything yet. So as far as I’m concerned, there is no deal. Goodbye Terry.’ 

A month later, Ziro Ltd is embroiled in an insider trading scandal, causing the company’s shares to dramatically drop in value. Kevin has lost his $150,000 investment and is threatening to sue Terry for his bad advice. 

Terry is upset and confused. He does not understand how Susan could just ‘back-out’ of the contract of sale for the gold. On top of this, he does not even remember seeing Kevin at the supermarket, let alone giving him investment advice. 

Terry has now come to you for urgent advice.

Using case law, advise Terry:

a) Whether the contract for the sale of the gold is enforceable; and

b) Whether Kevin would be successful in his claim for negligence.

Question Two: 10 marks, 1000 words

Florence Nightingale is an accounting executive who is looking to live out her lifelong dream of owning a café. After much searching online, she finds the perfect café in St. Kilda and decides to sell her home to purchase the business. 

In 2016, Florence approaches the current owner of the café, a property mogul called Renzo Rocco. After some brief phone conversations, Florence met with Renzo to discuss the terms of the sale. Florence was particularly interested in the turnover of the café and the number of patrons that it could hold. She also asks Renzo whether the café held a liquor licence. Renzo confidently told Florence, ‘this café turns over $30,000 per week, sometimes more. It may look small, but we are licenced to hold 70 patrons. We also have a liquor licence, its right there on the wall.’ 

Florence was very impressed by the turnover and agreed to purchase the café on a 90-day settlement. The requisite formalities were followed, and a written contract signed on 17 June 2016. However, when Florence took possession of the café, she realised that the café only held 50 patrons and that the liquor licence had expired the previous month. She also finds that the weekly turnover is closer to $10,000, significantly less than stated by Renzo. Upon a closer inspection of the written contract, Florence realises that there are no terms in relation to turnover, size or the business holding a liquor licence. She calls Renzo to complain, but he refuses to take her calls. 

After about 9 months of the café struggling financially, Florence decides it is time to reinvigorate the café with a new fit-out that would attract more customers. She engages an interior design firm from Richmond called GLO to completely overhaul and modernise the cafe. She meets with Tim from GLO and tells him that she is looking to redecorate the café with new, fresh colours, timber flooring, modern art and stone-top benches. Tim tells Florence that this wouldn’t be a problem, but that it would be expensive as GLO ‘only uses the best materials and workmanship’. On 10 June 2017, Florence and Tim sign a brief contract stating that ‘GLO will undertake all works described in Schedule 2 for a total cost of $200,000.’ Schedule 2 contained a general clause stating that the works would include:

• Painting of all walls and ceilings in colour to be reasonably determined by GLO;

• Installation of bamboo timber floating floors;

• Installation of new bench-tops for all bar, kitchen and patron tables;

• Purchase and installation of ‘modern’ artwork; and

• Installation of 26 pendent lights.

On signing the contract, Florence emphasises to Tim that the works will need to be completed by 1 September 2017 as she could not afford to have the shop closed for any longer period. Tim tells Florence that this shouldn’t be a problem. GLO commences work on the café on 23 June 2017. 

Unfortunately, the project takes longer than expected and is not complete until 10 November 2018. Florence estimates that she has lost nearly $90,000 due to the delay. To make things worse, when Florence reopens the store, she finds a number of issues with the workmanship of GLO. The paint was already flaking and of a colour that Florence did not like. The bench-tops were cheap laminate and not stone as she thought was agreed. Additionally, a number of pendant lights installed were not working and required replacement. Florence, unhappy with GLO, decided to hire a local building firm called Fix to repair the issues. The repairs totalled $75,000, which Florence was required to pay. 

Florence has now received an invoice from GLO for the entire contract price ($200,000). Florence is furious and refuses to pay GLO a cent. She has now come to you for advice. She is also annoyed at Renzo and is wondering whether she would be successful in bringing a claim against him for the sale of the business. 

Using case law, advise:

a) whether Florence would be successful in any claims against Renzo; 

b) whether Florence has any obligations to pay GLO; and

c) in both cases, whether Florence would have access to any remedies under contract law.

Question Three: 10 marks, 1000 words

Memorandum

To:    Junior Lawyer

From:     Partner

Hi, I’ve just met with a new client. His name is Sam Bennington, a software engineer with IBM who is looking to establish a new gym business. He came to see me today seeking advice on ways that he could structure this proposed business venture. 

In our conversation, Sam identified a number of key concerns for you to consider. This included:

• A desire to minimise his overall tax liabilities;

• How his choice of business structure may impact on the raising of capital to fund the venture; 

• Mechanisms that he could implement to ensure that he is protected from any poor management decisions made by his partners; and

• Ways in which he can ensure control over the day-to-day decisions of the business. 

Luckily, I have recorded his conversation. Your job is to watch this back and prepare a memorandum of advice for the client. Your advice should include a brief discussion of the strengths and weaknesses of each potential option, keeping in mind the specific needs of the client. Remember to include specific recommendations on what Sam should do – the client isn’t paying us for nothing! 

You can watch the video here. I’ll leave you to get started, and don’t forget to take notes!

Good luck! 

Required:

After watching the video, prepare a memorandum of advice to the client (Sam). 

HINT: In your memo, you are required to advise Sam of the potential ways in which he could structure his business, including the strengths and weaknesses of each option for his specific circumstances. You must also consider Sam’s assets and liabilities when giving advice and the key considerations outlined in the client’s instructions.  Individual Assignment  

Research Assignment Instructions   & Guideline

Task:   Individual Assignment 

Word limit 3,400 words (not including footnotes and bibliography)

Overview

The research assignment consists of three (3) problem style legal questions. All three questions must be attempted. You are expected to use a range of primary (legislation; case law) and secondary materials (textbooks; journals) to answer each question.