NICK JAMES
BUSINESS LAW
FIFTH EDITION
JAMES | THOMAS
© John Wiley & Sons Australia, Ltd. Not for resale or distribution. Any unauthorised distribution or use will result in legal action.
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Business law
FIFTH EDITION
Nickolas James
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© John Wiley & Sons Australia, Ltd. Not for resale or distribution. Any unauthorised distribution or use will result in legal action.
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Fifth edition published 2020 by
John Wiley & Sons Australia, Ltd
42 McDougall Street, Milton Qld 4064
Typeset in 10/12pt Times LT Std
© Nickolas James 2010, 2012, 2014, 2017, 2020
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BRIEF CONTENTS
Preface ix
About the author xii
How to use this text xiii
A
eviations xvi
Cases xx
Statutes xxvi
PART 1 Foundations 1
1. Business and the law 2
2. The Australian legal system 27
3. Politicians and judges 63
4. How to find, understand and use the law 110
PART 2 Legal consequences 155
5. Deliberately causing harm 156
6. Carelessly causing harm 189
7. Contract law: formation of the contract 220
8. Contract law: terms of the contract 254
9. Contract law: enforcement of the contract 286
10. Contract law: working with agents 316
11. Dealing with consumers 343
12. Dealing with competitors 388
13. Protecting IP 417
PART 3 Managing a business 463
14. Managing a business: start-up 464
15. Managing a business: business ownership 496
16. Managing a business: companies and corporate governance 532
17. Managing a business: making payments and recovering debts 566
18. Managing a business: insurance and taxes 597
19. Managing a business: employing workers 618
20. Managing a business: closing down 643
Index 676
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CONTENTS
Preface ix
About the author xii
How to use this text xiii
A
eviations xvi
Cases xx
Statutes xxvi
PART 1
Foundations 1
CHAPTER 1
Business and the law 2
Introduction 3
1.1 Law and the business person 4
Law and personal life 4
Law and business 4
Law in the media 5
Law in popular culture 5
1.2 The nature of law 5
Defining law 6
The purpose of law 7
The categories of law 11
The changing law 14
1.3 Justice, ethics and politics 15
Law and justice 15
Law, ethics and morality 17
Law and politics 19
Too much law? 20
Summary 23
Quiz 23
Exercises 24
Key terms 25
Acknowledgements 26
CHAPTER 2
The Australian legal
system 27
Introduction 28
2.1 The Australian legal system 29
Key characteristics of the system 29
The history of the system 35
2.2 The Australian Constitution 42
Structure of the Constitution 42
Constitutional conventions 44
Federal and State relations 44
Regulating the Te
itories 47
Changing the Constitution 48
2.3 The executive government 49
The Governor-General and the State
Governors 50
The Executive Council and the
Cabinet 51
Challenging the executive
government 52
Delegated legislation 55
Summary 58
Quiz 58
Exercises 59
Key terms 60
Acknowledgements 62
CHAPTER 3
Politicians and judges 63
Introduction 64
3.1 The legislature 65
The nature of parliament 65
3.2 Parliament in operation 69
How laws are made 69
Resolving deadlocks 72
Types of legislation 74
3.3 The judiciary 75
The Australian court system 76
Court processes 84
3.4 The doctrine of precedent 96
Do judges make law? 96
Precedent 97
Common law and equity 99
3.5 Alternative dispute resolution 100
Summary 103
Quiz 103
Exercises 104
Key terms 105
Acknowledgements 109
CHAPTER 4
How to find, understand and
use the law 110
Introduction 111
4.1 Finding the law 112
Legal research 112
Primary legal materials 113
Secondary legal materials 116
4.2 Reading the law 116
The relevant elements 117
Interpreting the law 123
4.3 Thinking like a lawyer 137
Inductive and deductive reasoning 138
How to solve a legal problem 138
4.4 Writing like a lawyer 142
Legal writing 142
Drafting a letter 143
Drafting a simple contract 145
Summary 149
Quiz 149
Exercises 150
Key terms 152
Acknowledgements 153
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PART 2
Legal consequences 155
CHAPTER 5
Deliberately causing
harm 156
Introduction 157
5.1 Causing harm 157
Criminal liability 158
Tortious liability 159
Contractual liability 159
Statutory liability 160
Vicarious liability 160
5.2 Deliberately causing harm to person
or property 161
Criminal liability 161
The tort of trespass 163
The tort of nuisance 168
The tort of defamation 170
5.3 Deliberately causing financial harm 174
Criminal liability 175
The tort of deceit 176
The tort of passing off 177
The tort of intimidation 178
The tort of interference with contractual
elations 178
5.4 The consequences of causing harm 179
Criminal consequences 179
Civil consequences 180
Summary 184
Quiz 184
Exercises 185
Key terms 186
Acknowledgements 188
CHAPTER 6
Carelessly causing
harm 189
Introduction 190
6.1 Carelessly causing harm to person
or property 190
The tort of negligence 191
6.2 Carelessly causing financial harm 211
Harm to the person or property of a
third party 211
Defective products 212
Negligent misstatement 212
Summary 216
Quiz 216
Exercises 217
Key terms 219
Acknowledgements 219
CHAPTER 7
Contract law: formation of
the contract 220
Introduction 221
7.1 Contracts 222
7.2 Requirement 1: agreement 222
Offer 223
Acceptance 227
Conditional agreements 231
7.3 Requirement 2: intention 232
Presumptions 232
Preliminary agreements 234
‘Mere puff’ 234
7.4 Requirement 3: consideration 235
Consideration need not be
adequate 236
Consideration must be sufficient 237
Deeds 240
Practical benefits test 240
Promissory estoppel 240
7.5 Formalities 243
7.6 Capacity to contract 244
Minors 244
Persons lacking intellectual capacity 246
7.7 Legality 247
Illegality under common law 247
Statutory illegality 248
Summary 250
Quiz 250
Exercises 251
Key terms 252
Acknowledgements 253
CHAPTER 8
Contract law: terms of
the contract 254
Introduction 255
8.1 Express terms 256
In writing and signed 256
Reasonable notice before the contract
is formed 257
8.2 Terms implied by the court 260
8.3 Statutory terms 262
Contracts for the sale of goods 263
Terms that protect the buyer 264
Ownership, delivery, payment and
acceptance 268
8.4 Disclaimers 272
Do disclaimers work? 272
8.5 Unenforceable terms 274
Terms limiting the court’s
jurisdiction 275
Terms imposing an unreasonable restraint
of trade 275
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8.6 Non-contractual representations
and promises 276
Parol evidence rule 277
Breach of collateral contract 278
Misrepresentation 278
Breach of the ACL 279
Unenforceable promises 280
Summary 282
Quiz 282
Exercises 283
Key terms 284
Acknowledgements 285
CHAPTER 9
Contract law: enforcement of
the contract 286
Introduction 287
9.1 Entitlement to enforce 287
Privity of contract 287
Time limits 289
9.2 Unenforceable contracts: lack
of consent 290
Mistake 290
Duress 293
Undue influence 295
Unconscionability 296
9.3 Remedies 299
Rescission 299
Damages 303
Equitable remedies 305
Statutory remedies 306
9.4 The end of the contract 307
Agreement 307
Frustration 307
Summary 311
Quiz 311
Exercises 312
Key terms 313
Acknowledgements 315
CHAPTER 10
Contract law: working
with agents 316
Introduction 317
10.1 Getting someone else to do it 317
10.2 Scope of authority 320
Express actual authority 320
Implied actual authority 322
Apparent authority 323
Agency of necessity 324
Authority by ratification 326
10.3 The agent’s duties 326
Duty to follow instructions 327
Duty to communicate information 328
Duty to act personally 328
Duty of care 328
Duty to act in the best interests of
the principal 329
Duty of confidentiality 330
Duty to account 330
10.4 The agent’s entitlements 331
Remuneration 331
Indemnity 332
Lien 332
10.5 Liability of agent and principal 333
Personal liability of agent 333
Vicarious liability of principal 334
10.6 Concluding the agency 335
Termination by the parties 335
Automatic termination 335
Summary 337
Quiz 337
Exercises 339
Key terms 340
Acknowledgements 342
CHAPTER 11
Dealing with consumers
343
Introduction 344
11.1 Protecting consumers 344
11.2 Dealing with consumers 347
Consumer protection regulation 347
General protections 350
Specific protections 361
11.3 Consequences of contravention 372
Offences and penalties 372
Defences 373
Enforcement 373
General remedies 374
Consumer guarantees 375
Codes of conduct 376
Industry ombudsman 376
11.4 Consumer privacy 377
What is information privacy? 377
Information privacy protection 377
Summary 384
Quiz 384
Exercises 385
Key terms 386
Acknowledgements 387
CHAPTER 12
Dealing with competitors
388
Introduction 389
12.1 Protecting competition 389
12.2 Dealing with competitors 390
Competition regulation 390
Key concepts 392
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