Business and Corporate Law WORK

Business and Corporations Law

Student’s Name

Institution

Professor’s Name

Course Title

Date

Business and Corporations Law

Effects of ACL on Contracts

The streamlines ACL, requires that all the Australian and foreign businesses in operation within Australia to understand and carry the new the new standards where applicable in their scope of undertaking contractual agreements. The effects of ACL in the context of contractual undertakings take the forms:

First, the regime ensures expansion of the unfair practice provisions, providing for a new national product safety regime and new laws on contracts and consumer guarantees. This is achieved through the aim of ACL to introduce fair trading laws and consistent national consumer protection which replace a broad spectrum of state, national and territory laws (Barker, Grantham & Swain, 2015).

Secondly, the ACL entails various types of protections. These sections apply at times so extensively. For instance, ACL prohibits any form of deceptive or misleading conduct. These specific sections have deep rooting in application from the lowest level of and individual undertaking to a commercial negotiation between two large corporations.

On the perspective of consumer guarantees. The ACL imposes specific duties on the suppliers of the goods and services to consumers. These include guarantees like, the goods are of acceptable quality, and the supplier legally owns the goods among others. Moreover, the ACL gives a provision that the terms of a consumer contract is void when the term is considered to be unfair beside the contract being a standard form and a non-negotiated contract (Clark, Stuyck & Terryn, 2015).

Lastly, the ACL is a fundamental piece of legislation as it provides protection to consumers. The ACL provisions have a significant bearing on the outcome of various contractual disputes. All the reforms of the Australian contract law takes into account the point of interface between the consumer law and the contract law.

Advantage of a sole trader in relation to partnership.

The exercise of full control is highly achieved in sole proprietorship as the sole trader undertakes every the entire control of the business. The sole trader runs the business how he/ she pleases with no interference from anyone (Naidu, 2012). Unlike a partnership in which one must consult with other partners before undertaking any role with respect to running the business.

There is quick decision making platform as the trader need not to confer with other decision makers, thus a swift move to meet the needs of his customers. On the other hand, the process of decision making in a partnership is long and involving which would results to delays in meeting customers’ needs (Dransfield, 2013).

Disadvantage of a sole trader in relation to partnership.

On the liability aspect, sole traders are disadvantaged as they are not treated as separate entity by law. They are subjected to unlimited liability (Bendrey, Hussey, West, Hussey & Bendrey, 2012). That is, the business owner takes liability with his personal assets when the business gets into debt, whereas in a partnership the any liability rests on the business assets and not personal assets of the partners.

Limited source of finance. A sole trader has to raise the funds for his business personally unlike in a partnership in which the task of funding the business rests on all the partners.

PART B

Issue

An analysis of the Jane’s case study deduces the facts to ascertain the validity of the offer by the Pebel Sports. First, Pebel Sports must be capable of creating legal relations through their 10% offer. Thus, there is a legally binding agreement (Whincup, 2006). . Secondly, the offer of 10% is precise, certain, definite and not vague. Thirdly, the offer I communicated to Jane as she was entering the business. The validity of the offer is ascertained further as the condition for the offer is not stated and therefore the claim by the girl at the counter is not valid (Whited, 2009).

Rules

The offer must be communicated to the offeree.

The offer must be definite, certain and not vague.

The offer must create a legal relationship.

Apply

An organization giving offer must state any necessary condition of the offer to ensure that the legal binding aspect of the offer is not violated.

Conclusion

The Pebel Sports should stick to their offer as there is a legal relationship created due to the presentation of the offer to their customers.

Creditor’s options

Instalment order –this gives the creditor an option to pay his debts by instalments.

Attachment orders –this a provision given by the court that when it can decide to the money you are owed at the time you also owe someone else (Polinsky & Shavell, 2011).

Summon for oral examination –the creditor can be called upon for hearing to give the information on his expenses, income, liabilities and assets.

Sarah and Jane have not breached any corporation act but acted on the option available to any creditor which is the attachment orders. Within this option when a person owes another person money and the other person owes someone else money, the court has the obligation to make orders on what happens to the money owed to that person (Polinsky & Shavell, 2011).

What happens when a liquidator is appointed is that in the event that the creditors have voluntarily decided to execute a liquidation process due to the company being insolvent and its impossible for it to continue trading, then the company is finally put to find wind-up its operations.

PART C

Importance of Corporate Governance

Institution-building for a market economy

Within a market economy, the private corporations raise their funds form investors, combining these funds with other inputs, for instance land, labor to conduct a business with an aim of making profits. The superior performance and the vital role played by the private sector corporations in economic growth has been a powerful motivator for a widespread system of privatization in various developed and developing nations (Hirschey, John & Makhija, 2004). Towards the development of these countries in terms of a competitive and efficient corporate sector, privatization is an indispensable action.

A system of good corporate governance ensures that a corporate institution pursues its fundamental profit seeking objective with maximum efficiency, both in form of social and private welfare. The experience from transition economies indicate that transfer of corporate ownership to the private hands is a sufficient measure in ensuring development of a robust corporate sector.

Lastly, effective corporate governance ensures that spillover effect in the entire system is curb. Opaque and unaccountable corporations are more likely to undermine the effectiveness of government and rule of law, creating a vicious circle of bribery, corruption and mismanagement both in private and public sectors. Development of good corporate governance is therefore key to public institution-building ingredient for an accountable and transparent society (Kim & Nofsinger, 2007).

Efficiency in capital allocation

There is a narrow gap between corporate governance and corporate finance and investment. The financial institutions and the public provide finances to corporations in expectation of lucrative financial returns. Good framework of corporate governance is vital to the development of equity markets in transition and developing economies, just like any other economy. First, when shares do not result to desirable financial returns, no investor will opt to put his money in such investment. Secondly, in a case where the value of the shares could not be evaluate accordingly because of unaccountable and opaque management of a corporation it is not easy to expect active trading of the corporation’s shares. In a nutshell, existence of enough companies which provide reasonable returns due to accountable management results to the growth of the entire market and the whole corporate sector benefiting from lower cost of capital (Monks & Minow, 2014).

Foreign Investment promotion

Due to the scarcity experienced in the domestic savings, transition and development economies need to raise funds from foreign nations. Establishment of a proper corporate governance becomes an increasingly important ingredient in this context, as the foreign investors tend to exercise a greater importance in the selection of their investments.

The few decades have experienced drastic changes in the international financial markets. Enormous amounts of capital are transferred from one country to another daily. Huge investment funds and other forms of money management vehicles have been initiated and have greatly assisted in the expansion of securities markets.

The growth in foreign investment trend is hugely an irreversible phenomenon. This is because the excessive savings witnessed in countries with advanced markets seek investment opportunities in nations which lack sufficient domestic savings (Monks & Minow, 2014). The large scale institutional investors emphasize on corporate governance as they have long-term investment perspective to fit the long maturities of their liabilities.

Why the Concept of Artificial Legal Person is a Fiction

A fundamental concept in the modern times secular company law is the fact that a company is incorporated pursuant to the provision of the law and it sails in the protection of a distinct legal person which is treated as separate from its shareholders. This feature is applicable in a case where the company is a public limited company or a private limited company.

A company has a legal person is a position making it capable of owning a property, suing and being sued, being subjected to legal obligations and rights (Caudill, 2012). This concept makes it possible for the recognition of a juristic person. This is a presumed person, that is, a legal entity with separate form from the people who established it. It is considered to have some human features, though not human qualities. It is a presumed person though not a human being.

Therefore entities like hospitals, universities, commercial companies can have a presumed person and are eligible to enter into a contractual relationship given that a relationship is performed by their competent representatives. This is because, there is a figurative sense that a body of men or a company are sometimes considered to be an artificial person, since the law associate them as one, and grant them a number of powers which are possessed by natural persons.

In addition, a company is an artificial person by law and enjoy a number of merits in comparison to other business structure. For example, a limited company has a legal existence which is separate from its members and its management as well (Caudill, 2012). Secondly, there is restriction on the choice of the company’s name. Choosing a particular name complies with the rules and no one else can use such name. Partnerships and sole traders have the protection of the trademark legislation. Consequently, it can defend or commence a legal proceeding in its name. Lastly, the corporation has an everlasting life. Employees, management, and directors act as a gent of the company.

References

Barker, K., Grantham, R., & Swain, W. (2015). Law of misstatements: 50 years on from HedleyByrne v Heller.

Bendrey, M., Hussey, R., West, C., Hussey, J., & Bendrey, M. (2012). Accounting and finance inbusiness. London: Continuum. Clark, E. E., Stuyck, J., & Terryn, E. (2015). Commercial and economic law in Australia.

Caudill, M. (2012). In our own image: Building an artificial person. New York: OxfordUniversity Press

Dransfield, R. (2013). Business law made easy. Cheltenham, UK: Nelson Thornes.

Hirschey, M., John, K., & Makhija, A. K. (2004). Corporate governance. Amsterdam: ElsevierJAI.

Kim, K. A., & Nofsinger, J. R. (2007). Corporate governance. Upper Saddle River, N.J:Pearson/Prentice Hall.

Monks, R. A. G., & Minow, N. (2014). Corporate governance. Malden, Mass: Blackwell Pub.

Naidu, Ravidra M.r.s. (2012). Principles of Business Studies. Xlibris Corp.

Polinsky, A. M., & Shavell, S. (2007). Handbook of law and economics: Volume 2. Amsterdam:Elsevier.. Handbook of law and economics: Volume 2. Amsterdam: Elsevier.

Whited, S. D. (2009). Concurrent validity of the Offer Self-Image Questionnaire for Adolescents,Third edition and the Tennessee Self-Concept Scale.

Whincup, M. H. (2006). Contract law and practice: The English system with Scottish,Commonwealth, and Continental comparisons. Alphen aan den Rijn: Kluwer LawInternational.