Principles of Business Law (BLAW10001) Lecture Notes
This document covers lecture content from the following topics:
Week 1 – General introduction Week 2 – Intro to Legislation Week 3 – Case law
Week 4/5 – Contract formation Week 7 – The terms of a contract
Week 8 – Contract performance and breach Week 9 – Remedies for breach of contract
Week 10 – Vitiating factors (factors that invalidate contracts) Week 11 – The Australian Consumer Law
Week 12 – Tort law (negligence)
Week 1 Lecture Notes – General Introduction
LEGAL AND NON-LEGAL RULES
LAW (working definition): rules of conduct or organisation that are recognised, applied and enforced by the power of the state.
• State: governmental machinery that operates in Australia
NON-LEGAL RULES: rules of conduct or organisation that are enforced by things such as peer pressure, a need for co-operation, feelings of goodwill, or for promoting convenience
• E.g. queuing at certain places is a need of cooperation between people
• They're more like social codes.
• Derived from a variety of sources e.g. moral/philosophical beliefs, the 'laws' of nature, social values, customs, traditions.
• They work well in small groups and communities
• In larger groups - they become inadequate - we need rules enforced by a central body (the state) to govern and regulate societal conduct
o Ensuring that our behaviour is safe and doesn't harm others, and that it is relatively predictable - links to how the law is best when the application is predictable.
• Particular rules that the state chooses to enforce are identified/made in different ways - elevating tings to the status of the law.
o Deciding to enforce rules based on non-legal rules e.g. established customs
o OR to make sure that laws continually adapt over time - rather than looking at established informal rules, to develop new rules when problems arise (a perceived need for regulation)
o In Australia, we have a combo of both
WHO HAS THE AUTHORITY TO MAKE LAW??
• Elected legislatures AND the courts - main agencies of law-making at federal, state and territory level.
1. Legislature - a group of politicians each elected by a local constituency. They congregate in the one space and write draft versions of the laws which are then voted on. If there is a majority, these laws are passed and turn into a jurisdiction.
i. Books that are readily available in libraries, or the internet
• Readily available to people in that geographical area
• Legislatures do not enforce the law - that job is left to judges and police (the police enforce the law)
2. Courts - judges within courts
• They don’t make written lists of rules
• They aren't elected
• They don't need a majority vote to be able to make law
• They make laws based on disputes between parties where the judge is asked to settle the dispute
They write a set of paragraphs logically explaining the dispute, and how the judge plans to settle it
Certain principles/steps that are followed - and approaches can be re-used - judges follow the same logic, procedures and principles.
Every time a judge writes a written reason based on logic on how they plan to settle a dispute, it becomes a part of the body of law in Australia - a WRITTEN PRECEDENT
LAW IN AN EVERYDAY CONTEXT
• CRIMINAL LAW - rules that are set up by the state for certain types of behaviour considered abhorrent. E.g. violence or dishonesty
o If you breach these rules, you are PROSECUTED by the state.
o Attempt to get a judge to convict you
Laws that cover private disputes
• CONTRACT LAW - series of rules that surround how you make a binding agreement with someone else, and what happens if somebody that has agreed to be part of a contract suddenly decides they no longer want to fulfill their obligations
• TORT LAW - NEGLIGENCE - where you believe that somebody's behaviour has harmed you or your property so you sue them for physical injuries or damage to property
• PROPERTY LAW - series of laws that cover how it is that you might be able to take possession or exclude others from other physical things that you believe belong to you, or other intangible things e.g. a piece of software
• AGENCY LAW - series of rules that surround the nature of relationships where one person acts as a representative for another person - agents negotiate things for you
o Complicated relationship - very clear instructions of what they do on your behalf, as well as the decisions you should be making for yourself.
• CORPORATIONS LAW - the law that surrounds how you form a company in
Australia, how your company should be organised, records that should be kept, and how the directors of the company are supposed to behave
o Governed almost entirely in Australia by legislation/law made by legislatures
• CONSTITUTIONAL LAW - the law of government - laws that affect the way legislatures operate
o What it is politicians can do, and what it is judges can do
• NATIONAL/INTERNATIONAL LAW
o National law - all the types of law listed above (specific to Australia) - domestic laws
• Can be contrasted against international law
o International law - law made between nations themselves e.g.
environmental/trade issues - countries negotiating deals between themselves
• NEGOTIATED DOCUMENTS ARE CALLED TREATIES
EXAMPLES
• E.g. an arson setting fire to a building (criminal law)
• Forming a new company and registering it - corporations law but agency law might govern how directors act as a representative
• Buying an apartment in the city - property law but contract law or agency law may also be relevant
o Contract law - when you sign documents with the seller of the apartment (binding agreement)
• Getting latest iPhone on a cheap mobile plan - property law - the question of do you get to own the iPhone after the rental period through a contract or are you just
borrowing it
• Slipping on a wet floor in the supermarket and sustaining serious injury - tort law - a situation where the careless behaviour of the supermarket employee has caused you a physical injury.
WHAT IS BUSINESS LAW??
• Consists of selected rules of law that are of particular relevance to just business activities
• Business law is a huge umbrella term that incorporates contract, tort and consumer law. Plus other divisions of law
o Tort law - e.g. delivering products/providing services to the community - be aware that what they are selling to you is not dangerous, or that the services don't harm you
o Consumer law - made by legislation - series of rules that relate to what happens when you purchase goods or services and they don't work/or are faulty/dangerous
• As a consumer you have certain rights against manufacturers/retailers
Importance of business law
• Legal aspects in typical business situations/legal rules involved
• The extent to which we can rely on legal rights/duties
• How to use the law to achieve desired outcomes
o Enforceable agreements for goods/services (contracts)
o How you can be compensated if someone doesn't fulfill their contractually obligation
o Advertisement of goods/services in a way that doesn't mislead customers (consumer law)
o Delegating responsibilities and discretion to certain employees
AN ANATOMY OF LAW - guidance for judges
• Consensus - showing the judge that a contract/binding legal agreement between parties exists
• CONSIDERATION
o You have to show a judge that all the people that have agreed to be a part of the contract have contributed
Principles - fundamental and non-negotiable
• A contract exists- one of the thing that has to be satisfied is did everyone in this contract have the same state of mind? Did they all intend to be legally bound to one another?
• If there is a contract dispute before a judge, what was their intention - this must be looked at through objective facts rather than subjective info.
Rules - depend more on the situation
• Give effect to principles
• E.g. intention to be legally bound should be inferred from known circumstances
o Outward manifestations of behaviour from the parties on the day the contract was formed
LEGAL AND NON-LEGAL ISSUES
E.g. whether to buy something from a local shop or online shop/auction
• Financial questions (cheapest) - non legal issue
• Practical questions - how to pay, getting delivery (non-legal)
• Social questions - personal relationships/goodwill (non-legal)
• Legal questions - non-delivery, faulty goods etc. - tort, consumer and contract law
o Legal issues are resolved by finding and applying a rule of law.
DECISION-MAKING IN COURTS
• Lawmakers must make decisions that are predictable and consistent
o Everytime a judge hears a dispute with a similar set of facts - we want them to use the same principles and set of logic to get to an outcome
o As a message to the community as to how disputes are dealt with
o Allows people to plan for the future with certainty and base their behaviour on that. - PREDICTABILITY
• We only have faith in courts when we know that the judge will continue to treat everyone in the same way than any other person that has come in before them with a similar dispute - promotes respect and support for the law
• Sometimes there are material differences in each dispute/case which change the whole complexion of the case - a judge's job is to then adapt the rules to the present situation
o Courts need to strike a balance between the strict application of established rules ad the pursuit of fair and just outcomes.
