ASSESSMENT BRIEF

Subject Code and Name LAW6000 Business and Corporate Law

Assessment Assessment 2 Case study

Individual/Group Individual

Length 2000 words +/- 10%

Learning Outcomes This assessment addresses the following subject learning

outcomes:
b) Demonstrate a sound comprehension of the essential
elements required to create, manage and discharge a
contract and assess the remedies available for breach of
a contract;

c) Examine legal principles related to creation and operation

of various forms of business organisations and critically
evaluate their effectiveness across a range of business
scenarios.

d) Explain the processes for incorporating, managing and

winding up of a company, including key director duties,
the importance of the Corporations Act 2001 and the role
of regulatory bodies.

e) Evaluate the role of agency in contract formation for

different business vehicles and identify the associated
risks such as vicarious liability for negligent acts.

f) Employ legal skills (statute law and case law), critical

reasoning and make informed judgements as to likely
legal outcomes of a range of business scenarios.
By 11:55pm AEST/AEDT Sunday of Week 9 (Module 5.1)

Weighting 25%

Total Marks 100 marks

Context:
This assessment allows students to solve practical problems that arise from a fact scenario and to
give appropriate advice to clients.

LAW6000_Assessment 2_Case Study

 Instructions:
There are five case studies you are required to critically analyse.
With respect to each case study:
✓ Identify the legal issue(s) arising from the facts of the case study
✓ Identify the appropriate legal rules that requires discussion in the case study
✓ Apply the law to the facts of the case study
✓ Reach a conclusion/ give practical advice to your client.
Your analysis should refer to appropriate cases and statutes and be referenced using the APA
Reference system.

Submission is through SafeAssign by 11.55 AEST Sunday of Week 9 of the relevant trimester

LAW6000_Assessment 2_Case Study

Question 1 (20 marks)

Sharleen owns a vintage furniture store in the south east of Melbourne. There are a few such stores
scattered in the area. Sharleen’s store imports vintage furnishings from various European countries.

Sharleen recently completed a very successful end of year sale and now hopes to replace old stock with
new stock from overseas. She already placed an order for the stock some months ago and she needs the
new season furnishings urgently. The sale went very well and 70% of her stock was sold. She is aware that if
she does not get the new stock in on time from overseas, she will lose a lot of money in sales. Her cash flow
will be adversely affected and she will not be able to pay her rent, telephone and electricity costs. She will
also struggle to meet employee salaries and the substantial payments on her overdraft with her bank. In
fact, if her order from overseas is not delivered on time to her business, Sharleen is likely to face
bankruptcy.

She contacts the delivery company, Overseas Fright Solutions Pty Ltd, with which she has been dealing for a
number of years. Davinder is the director and owner of this company. He is now aware of Sharleen’s
financial problems and instead of charging his company’s normal delivery fee of $6,000 per delivery, which
the parties have already agreed upon, Davinder now advises Sharleen that his company cannot deliver the
goods for the agreed price and that if she wants them, she will need to pay $12,000 per delivery. Sharleen is
very unhappy with this news but reluctantly agrees because of her desperate financial position.

It takes three delivery trips for the goods to be received at Sharleen’s business and she pays the higher price
for each delivery. The total payment is $36,000.

Sharleen is distressed and seeks your advice.

REQUIRED:
With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise Sharleen
as to her common law rights against Davinder and/or Overseas Fright Solutions Pty Ltd. Use appropriate
case law in support of your answer.
(20 marks)

Question 2 (20 marks)

Jim Blonde is a former defence consultant who now works for Intelligent Sellutions Pty Ltd, a company that
deals with modernising motor vehicles so that they can self drive. Jim is skilled in the area of artificial
intelligence and autonomous vehicle technology, having worked in the area during his consultancy.

Intelligent Sellutions Pty Ltd has hired Tom Stone, a GPS navigation expert, to build a suitable navigation
system that will allow autonomous cars to safely navigate any road network. A written contract was signed
between the parties. Tom is a high achiever. He attended Massachusetts Institute of Technology (MIT) and
graduated with the highest honours at age 16. He knows almost everything relating to navigation science
and technology. He is a professional engineer and can craft any kind of navigation device. Tom is famous for
creating the intelligent navigation systems that are used in the new futuristic defence aircrafts.

LAW6000 Assessment 2 Case study analysis

Jim Blonde told Tom that it was essential that the navigation system was safe and that it should be able to
update itself for at least 5 years. He added that the system ought to work on marked roads and unmarked
roads. Tom replied “All of our navigation systems are intelligent and can be used all over the universe on
any terrain. We have it sorted. They will also update themselves for upto 10 years.” The two agreed on this
verbally and this statement was not incorporated into the written contract.

The cost of developing the navigation system was $500,000, to be paid in two instalments: at the start of
the work and the balance on completion. Intelligent Sellutions paid $200,000 while the work was being
carried out.

When Tom indicated that he had finished the work, Intelligent Sellutions ran some tests on the navigation
system as soon as they received it. Jim Blonde installed it in one of the cars that they were working on and
took it out for a drive. Immediately the car reached a busy unmarked road, the navigation system failed and
the car stalled and would not move any further. As a result, Intelligent Sellutions refused to pay Tom,
arguing that the navigation system was not safe and did not work according to their agreement.

REQUIRED:
With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise Intelligent
Sellutions of their common law rights against Tom Stone as they seek to rely on his assertions. Use
appropriate case law in support of your answer.
(20 marks)

Question 3 (20 marks)

Benedicto and Prakash are the directors and shareholders of a “Healthy Solutions Pty Ltd” which imports
personal protective equipment from the European Union for sale to various local health institutions. The
company has a large warehouse where it keeps its goods, and distributes all its products from there.

Two months ago, the company entered into a contract to supply a large local health care provider with
disposable face masks. Benedicto and Prakash were excited and they ordered a large shipment from the
European Union to enable them honour the contract. The company ordered sixty shipments of face masks
from their supplier and have paid a large deposit. The shipping company which brings the goods into
Australia is now waiting for payment.

Healthy Solutions makes its first delivery but soon thereafter there are concerns about the safety of this
type of mask. The government issues a order banning these masks and specifies that only “N95” masks can
be used in the health services sector. As a result the health care provider cancels all further orders. Healthy
Solutions now has no future revenue. They have huge stocks of masks which cannot be sold. The shipping
company needs to be paid. There are various other bills due to the tax office. Employees and other service
providers have also not been paid. It is not certain how all these expenses will be met.

LAW6000 Assessment 2 Case study analysis

Benedicto and Prakash are desperate, and do not know what to do. They approach you for advice on
whether the company is insolvent, and if it is, what they must do.

REQUIRED:
With reference to relevant sections of legislation, use the IRAC legal problem-solving approach to advise
Benedicto and Prakash on whether their company, Healthy Solutions Pty Ltd, is insolvent and if it is, what
are the implications of such insolvency for Benedicto and Prakash and for the company in relation to any
action which they may take.
(20 marks)

Question 4 (20 marks)

Mrs Donovan bought shares worth $170 000 in Digi-money Enterprises Pty Ltd when the company was
incorporated by her friends John and Jessica Rych. At the time this was equivalent to 10% of the issued
shares. John and Jessica Rych took up 35% each and the remaining 20% was were taken up by their son
Paterson.

Digi-money Enterprises Pty Ltd was run very profitably for several years. Dividends were regularly paid out
of the profits of the company for the first 4 years. In the fifth year, there was a disagreement between Mrs
Donovan on the one hand and John and Jessica Rych on the other.

Subsequently, the company paid no dividends. The company however paid hefty salaries, bonuses and
directors fees to the Rych family. They retained additional funds in the Retained Earnings account, and did
not allow Mrs Donovan to inspect the records of the company. This effectively ensured that the Rych family
received a steady income stream, while Mrs Donovan received no funds from the company for the next 3
years.

She has tried to sell her shares but under the constitution of the company, the Rych Family are the only
ones she is permitted to sell to, and they offered her $17,000 for her investment.

It is now four years since Mrs Donovan received a dividend from the company, and she has come to seek
your advice as to her position. She believes that the company is being run solely to benefit the Rych family
and that she has been oppressed by their actions.

REQUIRED:
With reference to relevant sections of the Corporations Act 2001 (Cth) and appropriate case law, use the
IRAC legal problem-solving approach to advise Mrs Donovan whether she has any recourse.

(20 Marks)

LAW6000 Assessment 2 Case study analysis

Question 5 (20 marks)

Beatrice is a very successful business person. She owns Build Better Enterprises, a large business in South
Australia that manufactures made-to-order bathroom fittings, targeting the rich and famous. She has
worked very hard to grow the business.

Despite all the money that Beatrice has made in the business, she has no close family around her and is not
able to create any meaningful relationships. She is extremely busy but sometimes gets very lonely.

Beatrice is now approaching 70 years of age and feels that she needs help with running her business.
Beatrice has a niece, Shanice, who is an accountant working for a large accounting practice in Darwin.
Beatrice asks Shanice to move over to South Australia and help her run Build Better Enterprises.

Beatrice promises Shanice that she would give Shanice 50% of her business, Build Better Enterprises, if
Shanice works for her for 3 years.

Shanice has just settled into a new dream position at the accounting practice. She also has just moved into a
new home which she purchased with her partner Marcello, who also works in Darwin. Marcello does not
want to relocate. Because Marcello refuses to relocate, Shanice and Marcello’s relationship breaks down,
and Marcello starts a new relationship with another woman.

Shanice and Marcello sell the house. She then quits her job and moves to South Australia to start a new life
with her aunt. After eight months together, the relationship between Shanice and Beatrice breaks down
and Beatrice throws Shanice out of her house and her business. Shanice is angry as she has lost everything.

REQUIRED:
With reference to relevant legal principles, use the IRAC legal problem-solving approach to advise Shanice
whether she can successfully sue Beatrice under contract law. Use relevant case law to support your
arguments.
(20 Marks)

LAW6000 Assessment 2 Case study analysis

Learning Rubric: Assessment 2
Fail
Assessment Criteria (Unacceptable)
0-49%
Evaluation of Limited understanding of
information selected key concepts required to
to support the case support the case study.
study
Confuses logic and
emotion. Information
taken from reliable
sources but without a
coherent analysis or
30% synthesis.
Viewpoints of experts are
taken as fact with little
questioning.
Effective Difficult to understand for
communication audience, no logical/clear
while giving advices structure, poor flow of
to client ideas, argument lacks
supporting evidence.
Audience cannot follow
the line of reasoning.
20%
LAW6000 Assessment 2 Case study analysis
Pass
(Functional)
50-64%
Resembles a recall or
summary of key ideas.
Often conflates/confuses
assertion of personal
opinion with information
substantiated by evidence
from the research/course
materials.
Analysis and evaluation do
not reflect expert
judgement, intellectual
independence, rigor and
adaptability.
Information, arguments and
evidence are presented in a
way that is not always clear
and logical.
Line of reasoning is often
difficult to follow.
Credit Distinction
(Proficient) (Advanced)
65-74% 75 -84%
Supports personal Discriminates between
opinion and information assertion of personal opinion
substantiated by and information
evidence from the substantiated by robust
research/course evidence from the
materials. research/course materials
and extended reading.
Demonstrates a capacity
to explain and apply Well demonstrated capacity
relevant concepts. to explain and apply relevant
concepts.
Identify logical flaws.
Viewpoint of experts are
Questions viewpoints of subject to questioning.
experts.
Analysis and evaluation
reflect growing
judgement, intellectual
independence,
rigor and adaptability.
Information, arguments Information, arguments and
and evidence are well evidence are very well
presented, mostly clear presented; the presentation is
flow of ideas and logical, clear and well
arguments. supported by evidence.
Line of reasoning is easy Demonstrates cultural
to follow. sensitivity.
High Distinction
(Exceptional)
85-100%
Systematically and critically
discriminates between
assertion of personal opinion
and information substantiated
by robust evidence from the
research/course materials and
extended reading.
Information is taken from
sources with a high level of
interpretation/evaluation to
develop a comprehensive
critical analysis or synthesis.
Identifies gaps in knowledge.
Exhibits intellectual
independence, rigor, good
judgement and adaptability.
Expertly presented; the
presentation is logical,
persuasive, and well
supported by evidence,
demonstrating a clear flow of
ideas and arguments.
Engages and sustains
audience’s interest in the
topic, demonstrates high
levels of cultural sensitivity

Correct citation of Demonstrates
key resources and inconsistent use of good
evidence quality, credible and
relevant resources to
Percentage or marks support and develop
for this criterion ideas.
10%
Application of Limited understanding of
knowledge to the internal and external
practise while business environment.
providing
appropriate advice Lacks a global perspective
to clients for potential market and
trends.
40 %
Uses a limited range of
information as the basis of
recommended practice.
LAW6000 Assessment 2 Case study analysis
Demonstrates use of
credible and relevant
resources to support and
develop ideas, but these
are not always explicit or
well developed.
Understands the internal
and external business
environment including
commercial context and
market forces.
Understands local and
global markets/trends.
Accesses relevant
information.
Adequately utilises
information from a variety
of sources.
Gathers/utilises competitor
knowledge.
Demonstrates use of Demonstrates use of good
high quality, credible and quality, credible and relevant
relevant resources to resources to support and
support and develop develop arguments and
ideas. statements. Shows evidence
of wide scope within the
organisation for sourcing
evidence
Understands the impact Evaluates the impact of
of financial, social, financial, social, political,
political, environmental environmental issues on the
issues on the business. business; and where relevant,
as they relate to different
Demonstrates countries where the business
commercial awareness may operate.
of product
development/service Demonstrates commercial
provision. awareness of product
development/service
provision and cost
Understands the relationships.
business. Can prepare
and presents business Understands the business and
cases/proposals.. its risks. Can prepare and
presents business
cases/proposals.
Effective use of diverse
presentation aids, including
graphics and multi-media.
Demonstrates use of high-
quality, credible and relevant
resources to support and
develop arguments and
position statements. Shows
evidence of wide scope within
and without the organisation
for sourcing evidence
Demonstrates cultural
sensitivity. Analyses the
impact of financial, social,
political, environmental issues
on the business; and where
relevant, as they relate to
different countries where the
business may operate.
Critically demonstrates
commercial awareness of
product development/service
provision and cost
relationships. Holistic
understanding of business
and its risks. Assesses the
impact of information and
communication systems on
the operations of the
business.
Critical understanding of the
global market opportunities
and competitive environment.