Business Law Analysis Report

Introduction

The buying and selling of goods and services as well as contracts related to these transactions are guided by a set of civil laws referred to as business/commercial law. The law is important in that it maintains uniformity and consistency in legal matters in the business world. Acknowledging this, Joseph, a businessman seeks advice on a number of legal issues applicable in the operation of his small bakery/restaurant. This paper provides an analysis of the legal issues raised by Joseph and how he should go about solving each of the four cases as provided.

Case 1

Joseph has started a restaurant business on a quaint location where there is quite a high volume of foot traffic. Because of the small size of the kitchen, Joseph cannot manage to cook in the premise. He sees it fit to outsource the creating of the baked food to his cousin, Alfred. Within a few days of operation, Joseph decides to increase his output which means more baked food and, unfortunately, he is not sure whether Alfred is going to meet the demand.

Regarding the formation of a contract, Joseph needs to be aware that there are requisite elements that must be incorporated for him to be considered to have entered into a legally binging contract (McKendrick, 2014). These elements include: offer, acceptance, consideration, mutuality of obligation, capacity and competence. In this case, Joseph gave the offer of supplying the baked food daily to Alfred who accepted the offer and notified Joseph hence forming a legally binding contract (Carter & Peden, 2003).

The agreement/contract between Joseph and Alfred is not a written agreement but an oral one (by word of mouth), a form of contract that is recognized in Australian law (Utz, 2015). Generally, there are no special procedures or requirements when forming a contract, but is important to put the agreement in writing. This is because the written agreement will clearly show both parties expression of intentions and act as evidence. The court will also give more considerable weight on the party’s expressions of intentions and evidence as presented in the written document of the contract (Utz, 2015). Joseph outsourced the creation of baked food to Alfred who agreed to supply all necessary baked goods on a daily basis. Therefore, this can be termed as an oral contact between Joseph and Alfred. Joseph should go ahead and let Alfred know that he wants more baked food from him to sustain the increased output of 100 croissconenut. Alfred should be in a position to meet the demand since he promised to supply all needed baked food to Joseph.

On the other hand, if Alfred cannot meet the demand of baked goods, Alfred will have breached the contract. This means that Joseph can forward the matter to the court and Alfred will be liable for a breach of the contract. In such a situation, Alfred would pay for all damages and inconveniences caused by him as a result of breaching the contract. Although Joseph has the right to take Alfred in court in case of a breach of a contract, oral contracts present a lot of challenges in courts since without a written document, one party may decide to depend on lies for the mere fact that there is no evidence to proof he/she is not telling the truth hence the need for a written contract (Roxenhall & Ghauri, 2004).

Case 2

            Joseph wants to partner with his siblings and wants to divide the ownership of the business equally among the three of them. Joseph also want to protect them all from full liability in case of any wrong eventuality in the business. It is critical for Joseph to understand various business structures available and how these structures operates in the course of doing business thereby making it easier for him to pick the best business structure that will suit his interests. Below is an analysis of common businesses structures recognized by the law.

Sole trader also known as sole proprietorship is one of the business structures. In this type of structure, the owner conducts/operates the business individually or with the help of family, or some friends or relatives. This type of a business is easy to set up and operate since there are no much rules and regulations governing the structure (Andersson, Carlsen, & Getz, 2002). The size of the business is also small hence able to be handled by one person. There is no separate legal entity other than the owner in this type of a structure of business is taxed personally (Clayton, 2014). The business structure is advantageous in that the business owner enjoys all the profits solely, but disadvantageous since he/she is also liable for all obligations/expenses incurred in the course of the business and bears all liabilities with no one to share losses with.

Partnership is the other form of business structure and can be formed by two or more individuals or companies. This form of business structure is limited to 20 members or more in case of a professional partnership. During establishment, a partnership agreement is formed and registered with the relevant authorities. Partnership agreement is meant to define the rights and obligations of the members who are the partners (Tomasic, Bottomley, & McQueen, 2002). The partnership type of a business is not a separate legal entity and the assets of the business are jointly owned in specific proportions as set out by the partnership agreement. The profit realized from the business is shared equally among members or according to the specific proportions as defined in the agreement. Additionally, partners are liable for the obligations of the business and hence the obligations are shared equally among the partners or according to the specified ratio. Some partnership in Australia are formed in a way that liability is limited to the extent of each member’s capital contributions.

Company is another form of business structure, and in fact, it is the best choice for Joseph who wants to shield his siblings and himself from liability. The company is a separate legal entity that can own properties in its own name and also liable for its obligations. In Australian law, a private company can be comprised of not more than 50 members who are not employees while a public company which can comprise of an infinite number of members. The company must have a registered office in Australia and an Australian citizen as director (Farrar, 2001). The Director’s main responsibility is to manage company’s day to day business and affair and complying with the statutory measure put forth by the law such as diligence, and acting with care. Joseph and his siblings in this setting will be the directors of the company. As mentioned earlier, this is the best option for Joseph since it is an independent entity set apart from its members and subsequently limited liability for its members and directors.

Other forms include the Joint venture which involves multiple parties coming together to pursue a common goal as they remain a separate entity. Right and obligations of a joint venture depends on the stipulated the stipulated terms. Trust is also a business structure that involves the trustee who owns the property but carries out the business on behalf of the beneficiaries of the trust.

Case 3

Joseph is concerned about protecting the name of the business and also about the protection of his intellectual properties. Joseph wants his business to have a unique name which is not shared by any other business. A business/trading name is the name used to identify a business while carrying out the normal business transactions. The business name helps one to have a customer identification and also create the emotional relationship between the business and the customers. In Australia, ASIC is a body responsible for registering of business names in Australia (ASIC, 2008). One of the rules according ASIC is that one cannot have a name identical or similar to a name possessed by another business. For this reason, Joseph should consider registering his business at ASIC to ensure that it is not copied.

Joseph intends to obtain a design on his signature baked goods and wonders whether it is an appropriate method of protecting his business and intellectual property as a whole. Having signature designs on the food products is advantageous in that the consumers will enjoy a certain uniqueness and experience. Joseph can utilize the signature to differentiate his food products from those of other restaurants in the town. Hence joseph can take advantage of the signature design to keep the customers desire high hence product promotion. However, it is important to note that protecting intellectual property is expensive and one can spend a lot money. Apparently, intellectual property is an asset. Joseph should be careful with any partner he is dealing with especially on matters regarding the patent. It is important to have adequate security on the patent when working on it. Joseph should be cautious about how his property is being handled by the remote team. Most of intellectual property owners have also adopted the method of encrypting their intellectual property. Joseph should employ a better level of encryption and also place strong enforceable agreements that are applicable in both the developers place and owner of the intellectual property. This might seem a bit expensive but it is much better than dealing with breach of a trust. It is critical to document everything regarding the intellectual property. This is important since in case of a stolen intellectual property, presentation of the evidence and defending the property will be simple. Therefore, Joseph should consider filing for a trademark, an intellectual property right which protects the name of the business, symbols used to represent the business and the design of the products sold in his restaurant. When the trademark is registered, Joseph will enhance his rights as the owner of the intellectual property hence provide legal evidence and public notice of ownership. Subsequently, Joseph will have the right to sue anyone who copies (infringes) his rights within the 10 year period after registration and subsequent renewal of the trademark.

Case 4

On the first date of operation, a bicyclist crashed into a sign board placed outside the restaurant, on a sidewalk. When placing the sign board, it was important to have the duty of care since the restaurant was located on a busy route. When one fails to act or fails to comply with the duty of care, a tortious act may take place leading to legal suit (August, Mayer & Bixby, 2009). This is the case in Joseph’s analogy. Joseph should understand that after confirming the need to have a sign board outside the restaurant, it was important for him to place a warning sign to alert people of the existence of a sign board on the sidewalk and hence avoid incidences such as this. Now that this was not in place, the bicyclist has the right to press charges against Joseph citing an act of negligence. Joseph will be guided by the court regarding the compensation of damages caused by recklessly placing the sign board on a busy path. However, the plaintiff (bicyclist) cannot claim damages that were not caused by the sign board. Therefore, the only payable damages are those that were as a result of the reckless placing of the sign board, which amounts to be an act of negligence. Regarding the type of court Joseph is likely to appear in case this matter goes to trial is a question of which court has the mandate to handle such a case. Joseph is likely to appear in a civil court which deals with matters pertaining tort and contracts. In other words, civil courts handles issues which are not of crime in nature while civil courts deal with issues such as this one (torts, contracts, etc.) (Dobbs, 2008. Therefore, Joseph should know that he is most likely going to appear in a civil court.

 

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Utz, C. (2015, May 7). LEGAL RESOURCES . Australian Contract Law.