AT3 Written report
Week 9 (20%)
You are a manager working in a large national logistics company, TMT. TMT is preparing a
usiness case for a new service line that will deliver via drones parcels sent to selected inner
Sydney subu
s by a key client, Nozama, which is a national online retailer. You must prepare
for the Chief Executive Officer of TMT a memo of 1,500 to 2,000 words identifying and
describing the potential legal risks arising from the proposed new service line, how your client
might address those legal risks, and any areas where you consider it necessary to seek advice
from TMT’s external lawyers. Make sure that you consider applicable legislation, contractual
liability and other civil or criminal liability.
AT3 Written report
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Sample written report
You are a manager of a small start-up company, called SportX. SportX is planning to sell
month-by-month subscriptions to its coverage of niche global sporting tournaments, such as
the World Chess-Boxing Championship; like Foxtel, but for niche sports only. SportX intends
to deliver its coverage via the SportX App, which is still in development, and which customers
may download via the SportX website. You must prepare for the Chief Executive Officer of
SportX a memo of 1,500 to 2,000 words identifying and describing the potential legal risks
arising from the proposed new project (called the ‘SportX Premium Service’), how the
company might address those legal risks, and any areas where you consider it necessary to
seek advice from SportX’s external lawyers. Make sure that you consider applicable
legislation, contractual liability and other civil or criminal liability.
Please note that this sample written report is shorter than the required word limit. It is
intended to demonstrate the format and content of the required report only.
Memo
To: CEO, SportX
From: Business Manager, SportX
Subject: Legal risk analysis for new service line, SportX Premium Service
Executive summary
The key legal risks associated with the SportX Premium Service are: the risk that the company
will be unable to secure or maintain the
oadcast rights to enough live sporting events to
meet the target of 50 hours per week, the risk that customers will hack or otherwise misuse
the service thereby putting the company at risk of
eaching its
oadcast licences, and the
isk of a further COVID19 shutdown. These risks can be adequately addressed via the terms
of the customer and
oadcast license contracts. Other legal risks comprise the usual legal
isks associated with employees, contractors and suppliers. These risks can be dealt with in
the usual manner, through a combination of insurances, adequate internal policies (including
a WH&S policy and a staff Code of Conduct), and appropriate contract management. The
company will need legal advice in relation to drafting customer contracts and negotiating
oadcast licences as a priority.
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Circumstances
The SportX Premium Service aims to attract consumers seeking access to live coverage of
niche global sporting tournaments, such as the World Chess-Boxing Championship. The
company intends to purchase the
oadcast rights to a sufficiently large number of
tournaments that it can provide at least 50 hours of coverage of live sporting events each
week. It intends to deliver this coverage by way of the SportX App, which is presently in
development.
Legal issues / risks
Broadcast licences
The suspension or revocation of
oadcast licences in relation to flagship or heavily advertised
tournaments is a significant legal risk for the company. An event host may move to suspend
or terminate a
oadcast licence if SportX is in
each of a term of the licence agreement (eg
y on-selling too many licences), or if SportX customers
each a term of the licence
agreement (eg by hacking the SportX App to allow multiple users or re-
oadcasting the
feed). This could result in a significant loss of the customer base, depending on the importance
of the event, and could cause the company to incur significant legal expenses in resolving these
issues. The company can adequately protect against these risks by maintaining good relations
with event hosts (so that it can anticipate and address any temporary changes to the program
schedule), closely monitoring the company’s compliance with licence conditions, and by the
following legal risk management strategies:
• Incorporating compulsory a
itration clauses in
oadcast licence agreements, to
ensure the swift resolution of any disputes;
• Incorporating in customer contracts a condition that users must not hack the SportX
App to allow multiple users or re-
oadcast the feed, so that SportX can terminate
the customer contract for
each of this condition;
• Incorporating in customer contracts an indemnification clause requiring customers to
indemnify the company against all expenses associated with enforcing the prohibition
on hacking or re-
oadcasting.
The other significant business risk is a further COVID19 shutdown, which will mean that there
is no live sport to
oadcast, and that many customers will seek to cancel their contracts
owing to unemployment or financial hardship. This could cause the company to lose a
significant proportion of its customer base. To address this, customer contracts should
include a mandatory suspension during any COVID19 shutdown period. This would allow
the company to immediately restart all contracts when the shutdown ends, which would
minimise any loss to the customer base. Broadcast licences should include a similar provision,
so that the licences are not frustrated by a further COVID19 shutdown, necessitating re-
negotiation of new
oadcast licences when the shutdown ends.
Employees
There is a risk that employees may be physically or psychologically injured at work. The
company should obtain insurance coverage in relation to this. The insurer will require that
the company has an appropriate WH&S policy, staff Code of Conduct (including anti-
harassment and anti-bullying requirements), and appropriate training and prevention
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programmes, such as regular W&HS inspections by qualified contractors to ensure that staff
workstations are ergonomically appropriate. Additionally, the company should have a
manager responsible for overseeing the implementation of these policies.
Customers
SportX could be sued for
each of contract or negligence if the SportX App were to cause
a customer hardware or software problems, or consequent losses. To minimise this risk, the
company should quality test the SportX App and provide customer support, so that any
problems with the app can be swiftly identified and addressed. Customer contracts should
also contain an exclusion clause that protects the company from liability for any hardware or
software damage or consequential losses as a result of downloading or using the SportX App.
Customer contracts should contain an a
itration clause so that any claims can be resolved
without resort to litigation.
The risk that customers are able to access the service without paying can be addressed via
clauses in customer contracts requiring payment in full via credit card before accessing the
service, by a requirement that service fees are paid monthly in advance, and by permission to
suspend the service (activated via the app) if service fees aren’t paid on time. There is a risk
that customers may subsequently decide to cancel the service because they are unhappy with
the price or service content. This can be ameliorated by requiring customers to sign up for
12-month contracts, by requiring that customers provide 30 days’ notice of cancellation and
y the imposition of a cancellation fee as a disincentive to service termination. The notice
equirement would allow sufficient time for intervention by the marketing team and possible
e-negotiation of the customer contract.
Competitors
Competitors may sue SportX for defamation if SportX or its staff disparage their products or
services in advertising material or in person. To address this, the company should adequately
train sales staff, and should engage or employ professional marketers who understand how to
avoid defamation claims.
Contractors
SportX could be sued for negligence if contractors or invitees, such as couriers or prospective
job applicants, are injured on site. To address this, the company’s WH&S policy should have
a procedure for identifying, reporting and addressing any site-based hazards, such as slippery
floors, and obtain public liability insurances. Contractors should be required to adhere to the
Staff Code of Conduct, in terms of taking responsibility for the safety of themselves and
others. A notification and a
itration clause in contractor contracts would help to ensure
that potential claims are notified and addressed swiftly.
Summary and recommendation
The company ought to instruct its external lawyers to draft customer contracts that address
the abovementioned legal risks (particularly indemnity, exclusion, service suspension and
termination clauses) and assist in the negotiation of
oadcast licences.
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Appropriately skilled staff should be deployed to obtain necessary insurances (public liability
insurances), draft internal policies (WH&S, Staff Code of Conduct), and implement
management structures to supervise these risk management measures.
Sample written report
Memo
Executive summary
Circumstances
Legal issues / risks
Broadcast licences
Employees
Customers
Competitors
Contractors
Summary and recommendation