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LAWS20058 – AUSTRALIAN COMMERCIAL LAW
TERM 3, 2018 – ASSESSMENT 1 – INDIVIDUAL ASSIGNMENT
Marks: 40% of the overall assessment for the course
Submission: Online via Moodle
Format: One file in .doc or .docx (MS Word) format.
Submissions in any other file format (e.g. .zip) will be
treated as a non-submission.
Your file should contain:
Cover sheet – Contains your name, student number and
word counts for Questions 1 and 2.
Written answers to Questions 1 and 2.
Link to your YouTube video.
References should be footnoted, using the Australian
Guide to Legal Citation. There should be no need for a
concluding Reference List or Bibliography.
Due date: 11.45pm, Thursday 10 January 2019
Word limit: Word limits are set out below for each question.
Extensions policy:
The university policy on extensions of time will be strictly enforced. Extensions will only be
considered if made via the online system and must be based on medical or compassionate
grounds. Any extension application should be made before the due date for submission.
Medical conditions should be supported by a medical certificate, and, since students are
expected to start the assignment early, temporary or last-minute conditions are usually not
grounds for an extension. Professionals are expected to manage their time to meet their
obligations, so work or personal commitments are insufficient grounds for an extension.
Plagiarism:
The university’s plagiarism policy will also be strictly enforced. If plagiarism is found, a
minimum penalty is likely to be zero marks for the assessment. It could be worse.
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Question 1 (15 marks – maximum 1000 words)
Research a legal system of a foreign country and explain how it addresses the following
requirements of a legal system:-
– rules of recognition
– rules of change
– rules of adjudication.
Then explain how the Australian legal system addresses the same requirements. For the
Australian legal system, you will have to refer to the rules for recognition and change of both
statute law and common law. Your answer should include full referencing using footnotes,
NOT a reference list or bibliography.
Question 2 (15 marks, maximum 1000 words)
Your client, Sandra May, purchased an Internet/phone package from her Internet service
provider, jjNet. The online brochure research paper writing service had said that it provided Internet speeds of “up to 100
Megabits per second” and 10GB of data per month. It also inluded an Internet modem and a
mobile phone with unlimited local calls. Sandra took up the offer and accepted a contract
which stated that if she paid the package fee of $59.99 per month for 12 months, she could
keep the phone and the modem.
Now that Sandra has been using the package for 3 months, she has found a number of
problems. The only time she gets Internet download speeds approaching 100 Megabits per
second is in the early hours of the morning at around 2am. She also finds that as her data
usage approaches 10 GB in a month, the speed slows down dramatically to the point whre the
Internet is almost unusable. If she then buys an add-on package of extra data, the connection
immediately speeds up to about 100 MB/s.
She has also had a lot of trouble with the phone. When she received it, it did not look new as
it was worn in certain areas. The keys keep getting stuck so it is difficult to type text
messages, and the battery seems to die after only a few hours use. jjNet refuses to replace it.
She wants an advice on her possible legal actions. Your supervising partner asks you to
prepare a report to him setting out your research, legal reasoning, and recommendations. The
report should include full referencing using footnotes, NOT a reference list or bibliography.
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Question 3 (10 marks – maximum 6 minutes)
Assume that your supervising partner has read your report and has given you authority to
advise the client. For this part of the assignment, you need to prepare an oral advice for the
client in the form of a YouTube video. Your task is to provide that advice in a way that your
client can understand. The link to your YouTube video should be included in your
assignment file.
Presentation
When presenting to your supervising partner in Question 2, he/she will be looking for the
quality and relevance of your research. You therefore need to refer to cases and sections of
Acts. The approach when presenting to the client is different. In order to make a decision, the
client has to understand the key legal principles, but he/she does not need a lengthy analysis.
The goal here is to explain these principles in plain English and to make clear why you are
recommending a certain course. In general terms, the quality of your analysis will be the
important thing when reporting to your supervising partner. When advising the client, clarity
is most important.
A marking rubric is provided on the next page.
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GRADE MARK MARKING CRITERIA
HD 85%+ Demonstrates imagination, originality or flair, based on proficiency in all
the learning outcomes of the unit; work is interesting or surprisingly
exciting, challenging, well read or scholarly.
COMMENT: Here, the student will have done everything well, provided
some original insights, and formulated their answers in a tight, efficient,
thoroughly professional manner. The research will be strong and
comments will be insightful. For questions 2 and 3, the argument for the
recommendations will have a sound logical flow. It will also be
convincing, such that a client would not only embrace the
recommendations but also clearly understand why they are being made.
D 75-84% Demonstrates awareness and understanding of deeper and less obvious
aspects of the unit, such as ability to identify and debate critical issues or
problems, ability to solve non‐routine problems, ability to adapt and apply
ideas to new situations, and ability to invent and evaluate new ideas.
COMMENT: Similar to a C, but for a D the student has identified issues
specific to the client’s situation that are insightful and not obvious.
C 65-74% Demonstrates ability to use and apply fundamental concepts and skills of
the unit, going beyond mere replication of content knowledge or skill to
show understanding of key ideas, awareness of their relevance, some use of
analytical skills, and some originality or insight.
COMMENT: True learning involves not only knowing principles or
concepts but also the ability to apply them to a real life situation. This will
be revealed in choosing what is relevant and (in questions 2 and 3) making
a logical argument towards recommendations appropriate to the client’s
circumstances.
P 50-64% Demonstrates the learning outcomes of the unit, such as knowledge of
fundamental concepts and performance of basic skills; demonstrates
sufficient quality of performance to be considered satisfactory or adequate
or competent or capable in relation to the learning outcomes of the unit.
COMMENT: Students who get a mark in this range usually demonstrate
some knowledge of principles and concepts, but do not apply them
consistently to the actual fact situation. Their answers often contain a lot
of regurgitation of law but very little application of it to the real life
situation. Recommendations are often generic (they could apply to any
situation, not specifically to the client’s situation) and are often just lifted
from the textbook or a generic website.
F 40-49% Fails to demonstrate the learning outcomes of the unit.
COMMENT: Students in this range usually make some effort to perform
the assignment task but fail to achieve what is prescribed for a P.
Low F < 40% COMMENT: Students in this range usually fail to properly carry out the
instructions or perform the task specified in the assessment
________________________
Commercial contracts form the backbone of business transactions in any modern economy. They allow companies and individuals to efficiently exchange goods, services and assets by establishing mutual obligations and remedies in the event of breach. Australia has a robust legal framework governing commercial contracts, based primarily on common law principles developed through judicial precedent, but supplemented by relevant statutes. This article examines some of the key laws regulating commercial contracts in Australia, focusing on formation, interpretation and remedies for breach.
Formation of contracts
For a valid contract to come into existence under Australian law, several requirements around offer and acceptance must generally be met (Carlill v Carbolic Smoke Ball Co [1893]). There must be an intention to create legal relations, consideration in the form of something of value exchanged by both parties, and certainty of terms (Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989]). The parties must also have the requisite capacity; for example, minors generally cannot enter contracts without parental consent (Cheshire, Fifoot and Furmston’s Law of Contract).
The process of offer and acceptance is crucial. An offer must be clear, complete and capable of immediate acceptance to form a binding contract (Partridge v Crittenden [1968]). Silence or inaction does not constitute acceptance unless the circumstances implicitly require a response (Felthouse v Bindley [1862]). Acceptance must also be unconditional and communicated to the offeror within a reasonable time frame (Byrne v Van Tienhoven [1880]).
Electronic contracts have become increasingly common in commercial settings. The Electronic Transactions Act 1999 (Cth) validates the use of electronic communications in contract formation, provided certain formalities around records and attribution are observed. For example, an email clearly expressing acceptance of a prior offer would generally form a valid electronic contract (Walford v Miles [1992]).
Interpretation of contracts
Disputes often arise around the meaning and scope of contract terms. Australian courts adopt an objective approach, seeking to ascertain the intention of the parties based on the natural and ordinary meaning of the language used, evaluated in the relevant commercial context (Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982]). Extrinsic evidence of surrounding circumstances may be considered to resolve ambiguity, but not to contradict clear terms (Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976]).
Implied terms may be incorporated based on custom, previous dealings, or what is necessary to give business efficacy to the contract (BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977)). The doctrine of contra proferentem holds that ambiguities are generally construed against the party responsible for drafting the term (Pacific Carriers Ltd v BNP Paribas [2004]).
Remedies for breach of contract
If a party fails to perform their contractual obligations without lawful excuse, it constitutes a breach entitling the innocent party to remedies. The primary remedy is an award of damages to compensate for losses flowing from the breach (Robinson v Harman (1848)). Damages are intended to put the innocent party in the position they would have been in had the contract been performed, not to punish the breaching party (Asphalte Construction Pty Ltd v Queensland Cement and Lime Co Ltd (1978)).
Australian courts also have broad equitable jurisdiction to grant specific performance, compelling actual performance of contractual obligations where damages are an inadequate remedy (Waltons Stores (Interstate) Ltd v Maher (1988)). Penalty clauses imposing disproportionate damages are generally unenforceable, but genuine pre-estimates of loss may be recovered (Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd (1915)). The innocent party must take reasonable steps to mitigate losses from the breach to maximize recovery (British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd (1912)).
Termination of contracts for fundamental breach is also available, discharging both parties from further obligations and entitling recovery of any pre-payments (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962)). The doctrine of frustration may apply where an unforeseen event renders contractual performance radically different, bringing the contract to an end by operation of law (Davis Contractors Ltd v Fareham Urban District Council (1956)).
Conclusion
This article has provided an overview of some key laws governing the formation, interpretation and remedies for breach of commercial contracts in Australia. While common law principles predominate, legislation also plays an important role in regulating certain aspects of commercial dealings. Overall, Australia’s legal framework aims to facilitate business by providing certainty and remedies to support efficient contracting between companies and individuals.
References
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.
Cheshire, Fifoot and Furmston’s Law of Contract, 17th edn, Oxford University Press, 2018.
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
Felthouse v Bindley (1862) 11 CB (NS) 869.
Byrne v Van Tienhoven (1880) 5 CPD 344.
Walford v Miles [1992] 2 AC 128.
Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989.
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363.
Pacific Carriers Ltd v BNP Paribas [2004] EWHC 15.
Robinson v Harman (1848) 1 Exch 850.
Asphalte Construction Pty Ltd v Queensland Cement and Lime Co Ltd (1978) 138 CLR 330.
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26.
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696.
