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Length: Approximately XXXXXXXXXXwords Objectives Answer the following questions with reference to the relevant common law and equity principles operating in Australia concerning contracts plus related...

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Length: Approximately XXXXXXXXXXwords

Objectives

Answer the following questions with reference to the relevant common law and equity principles operating in Australia concerning contracts plus related and other transactions. Do not consider the effects of legislation potentially applicable other than that specifically identified. Students may make whatever additional factual and/or legal assumptions are necessary or convenient. And students should write about XXXXXXXXXXwords, or about 400 words per 10 mark allocation.

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Assessment Task

Question 1 25 Marks

Read the recent NSW Court of Appeal case Prasad v Sangha[2012] NSWCA 92 (see http://www/austlii.edu.au) together with any other relevant material you may care to consider and answer the following questions.

Provide a summary account of the key material facts and court proceedings. (5 marks)

What authority (if any) did Mr Goodarzi have to act for Mrs Sangha in relation to the sale and purchase of an interest in the Bar-Chello restaurant business and how did this affect Mr Prasad’s restitution claim? (10 marks)

What (if any) separate rights under common law/equity might Mr Prasad have against Mr Goodarzi in relation to the relevant transaction(s)? Consider especially the issue of warranty of authority. (10 marks)

Question 2 50 Marks

To provide security for the new $50 million shopping mall it was constructing, SunnyBank Construction Ltd (“SunnyBank”) – a south Brisbane firm - entered into a security services contract with Moreton Security Pty Ltd (“Moreton”) a well-established Queensland firm. In pre-contractual negotiations, Moreton said that it could guarantee its employees had an average of six years security experience, were only selected after careful screening to ensure they had no police record and on recruitment, went through an extensive training program. These statements were not entirely true, accurate or honestly made. To be sure, the final written contract made no mention of these promises and in fact contained the following exclusion clause:

Under no circumstances whatsoever, shall Moreton Security Pty Ltd be liable to SunnyBank Construction Ltd under contract law, for any injurious act or omission of an employee of the company or for any property damage or financial loss suffered thereby whether directly or indirectly.

Moreton then hired Patrick Kenniff - otherwise known as “Captain Kenny” - especially for the SunnyBank security contract. Kenny was in fact a covert member of a notorious group – dubbed “the Phoenix Boys“ – that stole and “recycled” expensive commercial vehicles besides plant and equipment. He had a criminal record for vehicle theft, assault and property damage. However, Moreton had failed to undertake a more or less routine check of public records that would have readily revealed his police record. During Easter 2012, whilst undertaking a routine daytime patrol on SunnyBank’s construction premises, Kenny invited some mates over for later afternoon drinks and a barbeque (BBQ). Unfortunately, his gas-fired BBQ stove blew up as they were cooking. It then set fire to the half-completed building causing $5 million in property damage as a consequence.

Required:

Apply the parol evidence and related rules to ascertain the scope of the contract. That is, in the absence of a “whole of agreement” clause can it extend to include the statements made in pre-contractual negotiations? (15 marks)

In the event any of the statements did form part of the contract, would they comprise essential, non-essential, innominate or procedural terms? (10 marks)

Is the exclusion clause valid and able to be relied upon by Moreton in relation to Kenny’s unauthorised Easter weekend activities? (10 marks)

What (if any) common law/equity remedies does SunnyBank have in the circumstances? (15 marks)

Question 3 25 Marks

Faraway Downs Pty Ltd (“Faraway”) a Northern Territory (NT) firm, operates an efficient well-integrated live beef export business comprising several large cattle stations across the NT, its own sizeable trucking fleet plus a 500 hectare property near Darwin which collectively enable it to supply about 10,000 head of cattle per month to the Indonesian live export trade out of the Port of Darwin. It also buys about 5,000 head of cattle a month from other graziers under annual contracts to ‘finish off’ over three months, then include in its regular three shipments per month of 5,000 beef cattle; these combined arrangements minimise total shipping costs per head. Faraway has regular arrangements with Darwin Shippers Ltd to charter three livestock vessels a month, since its Indonesian cattle supply contracts require delivery to nominated Indonesian ports. Faraway’s major competitor is Carnet Beef Exports Pty Ltd (“Carnet”) the NT’s leading meat processing firm, based in Darwin, owned and operated by Bill Carnet and his sister Ann Clancy. Carnet processes about 120,000 head of cattle per year, to supply the expanding Asian market for prime Australian beef. Carnet recently enlarged its Darwin abattoir operations in anticipation of expanding into the Indonesian beef market and also bought a large grazing property near Darwin with a capacity of 20,000 head of cattle. In the short term, to meet its Indonesian market supply target of 3,000 processed beef cattle a month, Carnet would have to outbid other buyers in the very competitive weekly NT Livestock Exchange (“NTX”), or otherwise secure cattle privately. Bill, Carnet and Ann took an aggressive approach in order to secure that target, detailed as follows.

Carnet successfully lobbied the NT Government to impose a $50 per head fee on the livestock export trade, supposedly to fund additional port infrastructure. This imposed an annual levy on Faraway of about $9 million and forced Faraway to secure a $50 price reduction from its unhappy grazier suppliers.

Carnet persuaded one so affected grazier supplier, Action Beef, to break its annual supply contract of 1,500 head of cattle per month with Faraway with an inducement of (i) $100 per head extra, payable three months in advance of supply (ii) free transport and (iii) separately marketing in Indonesia its beef cattle after processing, under the Supa-Action Beefbrand.

On her own initiative and without Bill Carnet’s prior knowledge or approval, Ann Clancy discreetly joined, funded and took over the leadership of an existing small vocal but previously harmless Darwin-based anti-livestock export protest group, Beef-Biffo, which she then radicalised and mobilised to: (i) illegally blockade the Darwin livestock wharf for three days, causing cancellation of a scheduled Faraway shipment; and (ii) trespass on Faraway’s 500 ha Darwin property causing $250,000 in damage to water bores, tanks and related equipment.

Required:

Advise Faraway Downs as to what (if any) common law tort rights and remedies (e.g. property damage and ‘business torts’) against (i) Action Beef, (ii) Carnet and (iii) Ann Clancy with respect to the above described interference with its business operations. (25 marks)

Answered Same Day Dec 20, 2021

Solution

Robert answered on Dec 20 2021
105 Votes
Running Head: LAW
PAGE
1
Law
Running Head: LAW
Law
Name
Institution
Question One
Summary Account
For the case court between Prasad and Sangha, Prasad is the plaintiff whereas Sangha is the respondent. During the month of September 2006, Prasad transfe
ed an amount of $ 150,000 into the bank account of Sangha following a request by Mr. Goodarzi after negotiating with the plaintiff about a restaurant business called Bar-Chello in Da
y Street. However, no returns were realised from the restaurant business, a factor that forced Prasad seek his sum recovered through the court proceedings. Prasad sought recover in two different occasions in which the first one did not yield any fruits. On the first occasion, Prasad claimed that Sangha had entered into an agreement with Mr. Goodarzi to have the restaurant sold at a cost of $ 150,000 a deal that never occu
ed. On the second occasion, Prasad presented a case claiming that he mistakenly paid the money basing on facts. On this occasion, the plaintiff made an assertion that he made payments to Sangha believing that he was the owner of the business (Prasad v Sangha, 2012).
Mr Goodarzi’s Authority
In regards to purchasing and making interests for the sale of Bar-Chello restaurant, Mr.Goodarzi had no rights to perform the duties of Mrs.Sangha. This is shown from the court ruling made by Delaney, the primary judge. This led to the dismissal of the plaintiff’s claim. The claim dismissal was because Mr. Goodarzi did not have the power of linking Sangha to any agreement concerning the sale of any interest associated to the restaurant business. Under this scenario, there was the need of making a decision as to whether Goodarzi was making a contract negotiation on behalf of Sangha, the respondent (Prasad v Sangha, 2012).
Delaney made a rejection of the claim basing his argument on two facts. The first fact was the plaintiff did not pay a sum of $ 150,000 to the respondent on a reason that the respondent had the sole ownership of the restaurant business. The second fact was that it would not be termed just for the respondent to retain the $ 150,000 sum basing on the prevailing circumstances (Prasad v Sangha, 2012).
I
espective of the fact that the primary judge did not find a reason to decide on whether Goodarzi made the contract negotiation on behalf of the respondent, the plaintiff claimed that Goodarzi had the right to do the negotiation on her behalf since he was her husband. This is because she had given the husband authority the authority to ca
y out the restaurant business negotiation on May 2006. Additionally, from the conversation that had taken place on August 2006 at Bella Vista between Sydney and Newcastle, it is apparent that Goodarzi had the power of ca
ying out the contract negotiations. Note, at some point in the conversation, Sangha made a description of the person to ca
y out the sale as the person purchasing the business premise (Prasad v Sangha, 2012).
From the conversation, it is clear that the plaintiff’s claim has the potential of supporting three conclusions. Firstly, Mr. Goodarzi had all the power of ca
ying out negotiations with the plaintiff regarding the sale of the restaurant business. Secondly, it can be concluded that Sangha did not involve Goodarzi in the negotiation of selling the Bar-Chello business restaurant. Finally, it was concluded that Mr. Goodarzi acted as the sales agent for the respondent. However, lack of oral argument during the court proceeding constrained evidence prove in support of such an agreement (Prasad v Sangha, 2012).
Wa
anty of Authority
Basing on the principle of common law, a party that conducts actions on behalf of another does that within the interests of the other party. This co
esponds to the legal responsibility and sensational concept in which a party is held accountable by the criminal law for omitting another party in any business transaction. For this case, Prasad, the plaintiff, is the third party whereas Mr. Goodarzi is the acting agent for Sangha, the principal. In a business transaction, an agency is the relationship that exists in which an agent undertakes contract negotiation on behalf of authorised principal. The pertinent negotiations that take place after the contract has been authorised are limited to the principal in question. The common law, under wa
anty of authority, stipulates that an agent undertaking legal action on behalf of the principle is limited to the obligations bounding the third party. Importantly, the law recognises only three forms of authority, which are actual authority, apparent authority and ratified authority (Williston, 2003, p. 465).
Under common law, wa
anty of authority
eaching occurs when an agent asserts to possess full power or authority to perform duties on behalf of the principal in which there is no existence of such authority. This gives the third party power to sue the agent in question if any incidence of a loss or damage occurs because of
eaching wa
anty of authority. However, there are incidences where it becomes difficult to prove deceit. Never the less, in such cases, the third party still owns the power to sue the agent in case damages or losses result from
eaching wa
anty of authority (Williston, 2003, p. 470).
Basing on the common law, the plaintiff owns legal rights against Goodarzi. Reason being, Prasad, the plaintiff, as the third party has the power to sue Mr. Goodarzi who is the agent basing on the common law under wa
anty of authority. This claim is in support of the fact that authority never existed in the first place; therefore, the plaintiff has the rights of suing Goodarzi for deception. Additionally, it is not possible to provide evidence for deceit when undertaking transaction procedures.
Question 2
Parol Evidence and Related Rules
There occur circumstances in which failure of contract signing or disagreement because of failure to meet agreed terms contained in a contract
ings about issues. When such incidences occur, the court always attempts to identify the reason behind through using a reasonable individual in establishing its findings. What the court does is utilizing relevant materials termed as important as its reference. Such materials include available background information related to the initial designing of the contract. This involves all drafts and negotiations made. Note, the court always pass judgement that favours an agreement perceived as commercially sensible (Matson, 2011, p. 303).
The main purpose of an agreement clause contained in pre-contractual agreements is to limit a party’s obligations and rights to the conditions contained in the agreement. Generally, the clause serves as an eradicating tool of eliminating any form of liability that emanates from pre-contractual oriented...
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