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Business and Corporate Law

Part A: Contract Law

In order to analyze the given case, the IRAC method has been applied as follows

Issues- In the given case, it has been found that Ken went to the jewelry shop in order to buy a gold Rolex watch for his girlfriend, where he found that the watches were expensive that ranges from $50,000 to $500,000. Since Ken was surprised to see the prices, he told the reason for buying the watch, in response to which the shopkeeper showed him a watch with Rolex brand stating that this the extra ‘x’ indicates extra special, and sold him the watch just at $500.00. Ken was excited to present the gift to his girlfriend. However, when Ken gifted the watch to his girlfriend, she realized that the watch was not an original one but the cheapest one, and left ken in the restaurant, while angrily slamming the watch on the table. Seeing such a menacing look and angry gesture of his girlfriend, Ken was sad and now wants to know whether he has any right to take action against the shopkeeper.

Rule- A contract is considered to be a legally binding agreement that can govern and define the rights as well as the duties between the parties, wherein the primary element required while making a contract is to offer, accept, and consider, i.e., exchanging something of value. Hence, in the given case it has been noticed that there is an exchange of something of value, wherein Ken gave money to the shopkeeper in exchange for the watch. Therefore, as per the rule, the contract law is applicable here. Contract law is crucial for a good functioning economy, wherein contract is also considered to be the legal expression of ideas stating that individual poses a right in concern to their wishes, along with the instrument to express their free will (Serter, 2019, pp126(1)). Therefore, Ken also has the legal right to take action against the shopkeeper. Hence, contracts are supposed to be fair, which leads towards the efficient gain to both the parties, involved in the contract, wherein in case of a breach in the contract be found by any party, the plaintiff has the legal right to take action against the one that breaches the contract.

Analysis- One of the primary terms within the Australian Contract Law is that in terms of value exchange, the legally enforceable needs to be included, wherein if the offer is made by one party, and accepted by the other, the essential contractual terms for the regarding the contract needs to be mentioned (Wise et. al, 2020, pp2(1)). However, in the given case, though there has been the exchange of economic goods, Ken has not been given the original product, which shows that the shopkeeper has been unfair with Ken while violating the terms as per the contract law. Since there is fraud in the contract, it is no longer considered to be enforceable, which gives ken the right to take action against the shopkeeper. Furthermore, the contract also contains limitations on the ability of the builders, wherein the remedy under the law of negligence is also considered (Fhloinn, 2017, pp179 (1)). In the given case, it has been clearly identified that there is a negligent misrepresentation, wherein the shopkeeper has given the false statement regarding the watch while selling it to Ken. Furthermore, an innocent misrepresentation can also be noticed here, where Ken was not aware about the product was being sold to him. In addition to this, there is also a fraudulent misrepresentation, wherein the shopkeeper has knowingly made a fraudulent statement, with the aim to mislead the plaintiff. Thus it clearly shows that Ken seems innocent in this case, where the shopkeeper has knowingly presented a false statement regarding the product, sold to Ken, which gives Ken the right to take action against the shopkeeper.

Conclusion- After the overall analysis, it can be said that Ken is innocent in the given case, wherein he was completely, as well as knowingly misled by the shopkeeper for the sole purpose f selling the watch. Thus ken can take legal action against the shopkeeper. On the other hand, it can also be said that Ken has been a little careless out of excitement after knowing the price of the watch, on which the shopkeeper was willing to sell. However, the greater potential lies in the hands of the ken because he was given the false statement by the shopkeeper, which gives him the legal right to take action against the shopkeeper.

Part B: Negligence law

In the case study of Jonathan, IRAC models have been used to analyze the whole concept

Issue: In the given case study it has been found that because of my negligence one of my clients Jonathan was forced to pay liabilities of huge cost. Negligence is considered as a crime for which the consequences are prominent and in my case of being from the income tax department which is one of the responsible sectors the penalties are even higher. Jonathan who has been issued with a labiality of $600,000.00 pulse interest is counted as financial damage that was all because of the negligence of me and an income tax officer.

Rules: Negligence and its consequences are different it can cause either physical or mental harm or sometimes economic harm too (NSW, 2021, pp2(3)). In the case of Jonathan, he was harmed economically thus, I will be taken into consideration the consequences since the damage was huge and evident. Under the existing law of negligence action needs to be taken on such situations. If the actual damage is hurting and beyond trifling emotional distress, it can be in my case where I will be undergoing tort action because of negligence for which Jonathan would be under the responsibility of care to that accused as my penalties.

Analysis: As per the Australian Negligence law, when the case is completely about the economic loss the need for liabilities remains specific, and the courts do consider some conditions. In the case of Jonathan which is purely an economic loss, thus the conditions for liabilities are very specific. However, the Australian court does acknowledge such claims in a limited circumstance (Ní Fhloinn, & Deirdre., 2017, pp1(3). The liability that Jonathan will be getting depends on the level of my awareness of the risk that Jonathan will be facing regarding financial loss. According to the law legal action depends on if the dependent was aware of economic loss or plaintiff and were both parties were able to defend themselves against each other. However, in the case of Jonathan both the parties were unaware of their actions and the negligence was not done thoughtfully for which the court can consider the fact that it was by mistake. However, as a penalty of negligence Jonathan can claim the compensation which I will be fulfilled according to his degree of financial loss.

Conclusion: After the analysis of Jonathan’s case, it is clear that the act of negligence was unknowingly however I am liable for compensation since the financial loss of Jonathan was huge. Being responsible work as an income tax specialist I was supposed to be careful before giving someone advice that can have legal consequences. Since it was a huge loss of Jonathan, he has a right to take legal action against me and he owed me a necessary legal duty of getting the justice that was happened because of my negligence (CASSEL, 2016, pp3(4). Even if the compensation appears to be huge, I have to provide remedies to Jonathan because I work in an income tax department I am responsible for being aware of tax-related legislation.

Part C: Consumer protection Law

To analyze the given case study of ACCC against 11 Harvey Norman franchisees, the IRAC method has been used as follows:

Issues: In the given case study of ACCC taking Harvey Norman franchisees to the court it has been found that the competition watchdog has taken 11 Harvey Norman franchises to the Federal Court of Australia. The allegation that 11 Harvey Norman franchises were according to ACCC misrepresented the consumer’s rights for which action needs to be considered. Thus, as an action, ACCC is seeking the penalties, injunction, cost, or declaration against such unethical behaviors. According to the chairman of ACCC Rod Sims, the consumers or the customers had a right to certain remedies when they purchase goods or products. When the purchased products appear to be not fit for the purpose that has been sold by the company. As per his statement, this right of consumers can’t be changed or restricted (Charrett, 2020, pp25(3)). For, example if the product that has been purchased is broken must be entitled to the option of refund or exchange. Also, the allegation was reasonable since in a few cases the consumers were asked to pay an extra fee for product repairment and at the time of returning the products. Although, according to ACCC some of the franchises were okay in providing remedies if the store gets earlier notification within a specific time frame but only on particular products e.g., large appliances, etc.

Rules: Consumer guarantees are as part of consumer law as well as a fair-trading law in which the business owner must understand the rights of the consumers thus to comply with the obligations. A business that is responsible for selling products or goods needs to provide an automatic guarantee to their consumers (Australian Government, 2013, pp2(4). In the case of 11 Harvey Norman franchises, it has been found that the consumers were not provided with the guarantee for the products that have been sold, or in some cases, they were asked to pay extra money if they choose to return the defective products. Consumer protection law appears to be very crucial in this given case study because according to this law it is necessary for the business to provide remedies to their consumers if they sold products that appear to be faulty, not matching with the demo model, not according to the description, etc. However, the remedy according to the law depends on the degree of issues either major or minor which in the case of 11 Harvey Norman franchises appears to be major where they asked the consumers to pay at the time of returning the defective products.

Analysis: The basic concept of consumer protection law is that at the time of doing business the owners need to be responsible for providing remedies to their consumers when they sell defective or unusable products. Including that the other scenario when the business has to provide remedies to its consumers is at the time of product not matching with the demo model, not as per the description, etc. Thus, in the case of 11 Harvey Norman franchises, it has been found that the consumers were not provided with the rights they have and the business franchises were not responsible for providing remedies for their defective sold products. Indeed, they asked the consumers to pay extra to repair the product which is significantly wrong according to the consumer protection law of Australia. However, some franchises had no obligation and are ready to provide remedies on specific products such as large appliances which are appreciable but such remedies need to be applicable for every product they sold to the consumers. According to new Australian Consumer law legislation that has been passed in the parliament is that the penalties on such unethical behaviors of the business have increased significantly (Frayne and Mitchell, 2020, pp1(1). A business that breaches significant consumer law under the competition and consumer Act 2010 has to pay maximum penalties. The fine that has been kept has been lifted from $1.1 million significantly.

Conclusion: Taking all the analysis into consideration it has been found that those 11 Harvey Norman franchisees are found to be guilty and are compiled for penalties. It is because they did not follow the rules that being a business organization should follow. The consumer guarantee on products that have been sold is applicable even if the warranty period of manufactures gets expired which means that the consideration that some of the franchises were applying only on specific products such as large appliances are not considered under the consumer protection law. Thus, it indicates that consumers have a legal right to get remedies on every defective product they buy and which are not able to be used.


Australian Government 2013, The Australian Consumer Law A framework overview, viewed 17 January 2022, <>.

CASSEL, D 2016, ‘Outlining the Case for a Common Law Duty of Care of Business to Exercise Human Rights Due Diligence, Business, and Human Rights Journal, vol. 1, no. 2, pp. 179–202.

Charrett, DD 2020, Australia’s consumer protection law – a potent weapon in construction law disputes, viewed 17 January 2022, <>.

Ní Fhloinn, D. 2017, “Liability in negligence for building defects in Ireland, England, and Australia: Where statute speaks, must common law be silent?”, International Journal of Law in the Built Environment, vol. 9, no. 3, pp. 178-192.

Frayne, A & Mitchell, T 2020, Companies can face billion-dollar fines under Australian Consumer Law penalties – Consumer Protection – Australia,, viewed 17 January 2022, <>.

J.A. Wise, C.C. Meng, D, Tadic, S. Miles J. Cornish, J., Sellers, E., Brenecki, D., Dzakpata, I. and Murugesan, B. 2020, “Legal smart contracts for derivative trading in mining”, The Knowledge Engineering Review, vol. 35.

Ní Fhloinn, & Deirdre. 2017, Liability in negligence for building defects in – ProQuest,

NSW 2021, View – NSW legislation,, viewed 17 January 2022, <>.

Y.S, (2019), “A brief survey on law and economics of contract law”, Juridical Tribune Journal = Tribuna Juridica, vol. 9, no. 1, pp. 126-136.


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