Describe about the Business Corporation and Law for Breach Repudiation.
Australian Contract Law can be divided in five groups namely formation, scope & content, avoidance, performance & termination and remedies. A contract is often a promise or a deal made between two parties and agreed accordingly, which also legally valid under the Australian Contract Law by including all the clauses and criteria in it. Here, promise refers to a task that an individual ensure to perform in return of money or any other assets from the other person included in the contract (1Julie Clarke, 2010).
In the provided case scenario, it has been apparent that Richard and his father entered into a contract, wherein Richard has agreed to mow the front and the backyard along with gardening. In return of the task, Richard’s father has promised him to pay $200 every week as an allowance for his hard work. However, after four weeks Richards’s father stated that he is unable to pay $200 in weekly basis as per the deal as well as according to him Richard should do all the works for free as he is a part of the family and also gets free lodging.
Taking the reverence from the Australian Contract Law, it can be stated that Richard and his father has agreed upon a verbal contract, wherein no documentation process have been completed. According to the Australian Contract Law, verbal contracts cannot be sorted in proper manner due to lack of evidences, which make the contract more time consuming and vague. However, verbal agreements can be legally binded in certain circumstances, which is not applicable in all cases. As per the legislation, an agreement between two parties can be said as a contract only after satisfying the criteria of a legal agreement or contract among which offer and acceptance, aim to bind the agreement legally and exchange in return of the transaction are the most essential element. Therefore, it can be stated that both the parties need to agree with the terms and conditions and have the intention to legally bind the agreement (Gulati, 2011).
In this regard, considerations mostly include payment of money for the services provided by one party to another. The Australian Contract Law, in most cases prefer written contracts as verbal contracts are often hard to confirm, which make it more challenging and time consuming. The parties involved in the contract must also need to provide evidences for proving the existence of the contract in case of any illegal situation such as breach of contract (Thomson Reuters, 2016).
In the current decades, fraud has become a common factor for which verbal contract might face some problems even though agreements are considered to be effective, due to lack of evidences the parties might violate the clauses. The key problem related to the verbal contracts is that it is hard to prove in regards to the fulfillments of the terms and conditions. It may happen that people in an agreement may forget, what they have promised to each other. In this regard, verbal contract has a disadvantage in comparison to legal or written contract. Therefore, it is necessary to follow the principles that make a contract legally binded. These principles include agreement, consideration, intention, capacity and legality among others (Pearson, 2009). Contract law is based on law principles, which are often changed by legislation (The Government of South Australia, 2016). Referring to the case situation, the contract between Richard and his father is verbal with no legal contact. After the contract is made between two parties, it is bound that the parties carry out to fulfill the terms and conditions of the contract. In case one of the parties violates the agreements in the contract, the other party involved can recover losses from the first party as per the law (NSW Government, 2015).
Unable to fulfill the contact may be considered as a breach. A violation occurs, when one party fails to perform contractual responsibilities as per the contract. If a contract is breached by one party, the second party is liable to get compensation for the damages (Grace & Grace, 2010). The second party in time of breach can activate their rights under the contact. A breach in contact may also deprive the right to enforce to perform the activities (Bennett, 2012), as in case of Richard and his father. Referring to the case scenario, Richard’s father failing to pay Richard for the work that he has performed can be seen as a breach of contract.
Conclusion
Based on the understanding obtained from the case scenario and the criteria of contract law, it has been evident that the contract between Richard and his father cannot be considered as a business agreement, as it is just a verbal agreement between a father and son. In this context, it can also be affirmed that Richard mowed the front and backyard of his house, so he can get weekly allowance of $200. This, in turn, enabled his father to get a clear yard as well as well maintained garden. Thus, it is purely a deal within the family members regarding the task of cleaning own house. In regards to family matter Richard cannot sue his father for a weekly allowance, as it is a verbal agreement without even entering into a contract by legally binding the same. From a different perspective, mowing the yards and maintaining the garden can also be considered as one of the duties or responsibilities of Richard. Therefore, it is observed that as there is no legal contract between Richard and his father, he cannot say that the contract has been beached and acquire for the loss. Based on the theoretical understanding, a contact is said to be valid only if it fulfills all the principles or criteria of contracts, which include capacity, legality, consideration and intention. Although it can been that consideration has been a part of the verbal contract between Richard and his father, regarding payment as return of the work does not completely fulfill the principles of the contract under the Australian Contact Law.
Thus, Richard cannot consider the agreement as prevail or to be legal, as it does not fulfill all the requirements of contract based on verbal agreement between a son and father, thus Richard should help his father in mowing of the yards considering his responsibility towards his home and he can request a least amount as weekly allowance as per the affordability of his father.
A contract is said to be more important and valid than just an agreement between two parties or individuals based on mutual terms and conditions (Fitzroy Legal Service Inc, 2016). Based on the provided case situation, it is apparent that Joe, who is an actor, has entered in a contract with Frère Bros for the period of five years. Joe agreed to the terms and conditions of not acting for any other companies during that particular period. However, on the first year of the contract, Joe entered into another contract to star in a film with Pretty Pictures. Considering the case, Joe and Frère Bros have signed a legal contract, which provides the right for the company to sue Joe for violating the contract of providing services only to them for a particular period.
Exclusive contracts can be forced on both the parties those are involved in the contact. Business law also comprises of other laws that sets out responsibilities, rights and duties of people involved in the business. This law helps in maintaining the interests of the producer, seller and buyers towards a business. It further controls the transaction of the business under the Australian contract law, which describes the circumstances, when an agreement becomes legally valid as a contract. In this regard, it can be stated that the term ‘law’ refers to a set of principles that often formulated by governing bodies such as Courts and Parliament (Kluwer, 2015).
Exclusive contract can defined as a contract, which is between two parties for a specific period in which one party pays the other party for their exclusive services. It is a contract that has been given to an individual or a group for providing exclusive services to the other party (Chamberlin, 2014). Here in Joe’s case, he has agreed to provide exclusive services to Frère Bros initially and entered into the contract. Exclusive contracts are said to be legal only if it does not restrain competition. Exclusive can be various types, including purchase and sales contract, representation agreements and publishing contracts among which Joe’s case considered under the representation agreement. A representation agreement is a type of contact, which allows representation of athletes or artists by agents. For instance, a singer represented by an agent can be managed by other agents. In such cases, the contract cannot be terminated even if the athletes and artists are unhappy with the services of the agents (Ozyasar, 2016). Thus, from this perspective, it can be affirmed that the contract between Joe and Frère Bros can be treated under Representation agreement and the company can apply lawsuit accordingly.
The key remedy in case of violation of contract is demand for compensation or damages suffered by the victim. In case of breach of contract, the other party has options either to perform or to pay for damages. However, an individual can only claim the damages if the suffering party proves that there has been a breach in the contract that has led to financial loss (Oxford University Press, 2016).There are two components of breach of contract, which are injunctions and performance. Specific performance includes performing of the tasks that has been ordered by the court for breaching the contract. In this regard, it is worth mentioning that specific performance can only be ordered, if the damages fail to compensate the suffering party including personal services, while on the other hand, injunctions are orders, which are directed to the breaching party not to act (2Julie Clarke, 2010).
In case of breach of contract, the first thing that will be focused is the clauses of the contract, which contains terms and conditions during occurrence of breach. In this context the case Warner Brothers Pictures v. Nelson, [1937] 1 KB 209(Duhaime, 2007) can be considered as an ideal example, wherein the actor Bette Davis (Nelson) had agreed to an exclusive contract for two years with Warner Brothers Pictures, wherein it was mentioned that Bette cannot act for other companies, but she violated the contact and agreed to act for another company within the period of two years. Warner Brothers in turn sought an injunction in order to prevent Bette to enter into other contacts, wherein no specific performance would be ordered (Duhaime, 2007). Taking the reference from this case outcome and the provided case situation, it is therefore suggested to the Frère Bros that it can sue the actor and appeal the court sought injunction to prevent Joe for acting or entering into a contract with the Pretty Pictures.
IRAC stands for issues, rules, application and conclusion (California State University, 2016). Based on the case situation, it is observed that the issue referring to the case is breaching of contract. Joe has entered into the contract with Frère Bros for five years and agreed to exclusively work for them, wherein he has agreed to the fact that he will not act for any other companies. Thus, the key issue is that even after being in a contract with Frère Bros, he signed another contract with Pretty Pictures, thus breaching the previous contract. Frère Bros can represent the case in front of the court. Concerning the rules in such situation, it can be affirmed that Frère Bros can consider the case under the Australian Contract Law, which includes six principle of contract namely offer and acceptance, intention, consideration, legal capacity, consent and illegal and void contracts (Fitzroy Legal Service Inc, 2016). As per the Australian Contract Law, when a breach occurs in a contract, the damaged party can represent the issue to the court such as in the case of Joe as he violated the contract. Here, Frère Bros as per the contract law can issue for injunction in the court, which can help Frère Bros to prevent Joe from working with Pretty Pictures but does not allow personal services. Frère can further apply for remedies under the contract law through which Frère Bros can demand compensation to Joe for the damages suffered by the actor due to violation of the contract.
Conclusion
It can be said from the case scenario that Joe has violated the exclusive contract that was agreed between him and Frère Bros. As per the Australia Contract Law, Frère Bros can represent the issue in front of the court and can appeal for breach of contract against Joe, as he violated the rules or clauses after having the knowledge of entire terms and condition. Therefore, on the ground of conducted action by Joe, the Frère Bros can issue for injunction. Injunction can be seen as an instrument through which a contract between Joe and Pretty Pictures can be prevented, thus making Joe to complete his contract with Frère Bros initially.
References
Bennett, M 2012, ‘Breach repudiation and terminating a contract’, Legalwise Seminars, pp. 1-14.
California State University 2016, ‘How to brief a case using the “IRAC” method’, Facts, pp. 1-2.
Chamberlin, K. J 2014, ‘Exclusive contracts and closed/open departments’, Payment and Practice Management, pp. 1-2.
Duhaime, L 2007, Part 8: Time limits, breach & remedies, Law Topic, viewed 11 September 2015, <https://www.duhaime.org/LegalResources/Contracts/LawArticle-93/Part-8-Time-Limits-Breach-Remedies.aspx>
Fitzroy Legal Service Inc 2016, Elements of contract, The Law Handbook 2016, viewed 11 September 2016, <https://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/>
Grace, T. & Grace, F. E 2010, ‘The termination of contracts for breach’, Contents, pp. 1-36.
Gulati, B 2011, ‘Intention to create legal relations: A contractual necessity or an illusory concept’, Beijing Law Review, vol. 2, pp. 127-133.
1Julie Clarke 2010, Overview of Australian contract law, Home, viewed 10 September 2016, <https://www.australiancontractlaw.com/law.html>
2Julie Clarke 2010, Remedies, The Law, viewed 10 September 2016, <https://www.australiancontractlaw.com/law/remedies.html>
Kluwer, W 2015, ‘Australian business law’, Commonwealth Legislation Reproduced, pp. 3-10.
Oxford University Press 2016, ‘Contract law’, Outcome, pp. 314-347.
Ozyasar, H 2016, What does an “exclusive contract” mean, Law for Businesses, viewed 11 September 2015, <https://www.ehow.com/info_8790195_exclusive-contract-mean.html>
Pearson 2009, ‘The formation of a contract’, My Law Chamber, pp. 1-51.
NSW Government 2015, Contracts, Home, viewed 10 September 2016, <https://www.fairtrading.nsw.gov.au/ftw/consumers/contracts.page>
The Government of South Australia2016, Contract law, Crime, Justice and Law, viewed 10 September 2016, <https://www.sa.gov.au/topics/crime-justice-and-the-law/contract-law>
Thomson Reuters 2016, Is a verbal agreement legally binding, Learn About the Law, viewed 10 September 2016, <https://www.findlaw.com.au/articles/5626/is-a-verbal-agreement-legally-binding.aspx>
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