Curtin Law School
Curtin University
Curtin Law School
Semester 2, 2022
Take Home Test
Unit Name: Fundamentals of Business and Corporations Law
Unit Number & Version:BLAW5016
Duration: You are required to attempt a take home test from 5pm on Thursday 6 October to Tuesday 11 October 9am WST. The take home test requires you to write an answer to a problem question dealing with materials from Lectures 7, 8 and 9 of the semester programs. The test must be submitted through Turnitin in Blackboard by Tuesday 11 October 9am WST. Marks will be deducted for late submission.
You will not be awarded marks for copying directly from any textbook or legislation.
The take home test has a word limit of 2000 words and it must be typed/word processed unless prior agreement has been obtained from your tutor. The take home test will not be assessed if it exceeds 2000 words (excluding referencing). Please ensure that you have checked the document for spelling and grammar before submission.
The take home test MUST be submitted ELECTRONICALLY.
Please observe the following requirements:
Font:-Times or similar font - no smaller than 12 points in size
Spacing:-1.5 line spacing, and appropriate paragraph spacing
Margin:-at least 2.5cm on the top, left, right & bottom
Pages:-Numbered in top or bottom margin
Paper:-A4 size paper
The take home test must be accompanied with the cover sheet provided with the test and must be received by Tuesday 17 May 9am WST.
Once you are satisfied that your take home test is ready for submission, you should save it with a filename as below:
Student ID_FirstnameLastname.doc
For example: Smith_John1234567.doc
It is important that you dont include characters other than your student number, underscores, and your students name. This means do not include characters such as * or / or ANY SPACES IN THE FILE NAME.
Please ensure that you click on the submit button to upload your take home test.
Failure to submit the take home test by the due date may result in a zero mark for that part of the assessment.
Total Marks:25 Marks comprising 25% of the final subject grade.
QUESTION
John and Vera operated a partnership that was in the business of manufacturing furniture. They decided to register a company named Urban Pty Ltd and to sell their business to it.
In January 2021, John enters into a contract to supply office furniture to Curtin University for $75,000 and signs the contract as agent of Urban Pty Ltd.
In July 2021, Urban Pty Ltd was formed. John becomes the managing director and Vera becomes a director and the sales manager of the company. The following clauses are contained in Urban Pty Ltds constitution:
the company will only manufacture furniture.
any borrowing by the company exceeding $50,000 is to be approved by the members in general meeting.
Vera, the Sales Manager of Urban Pty Ltd, was so impressed by a machine used to produce colourful mobile phone cases that she purchased a machine for Urban Pty Ltd at a cost of $100,000 from Wow Ltd. As Urban Pty Ltd did not have the necessary funds, Vera arranged a loan from Distrustful Bank Ltd
Before the sale was entered into however, Wow Ltd had telephoned Urban Pty Ltd, and asked to speak to the managing director. As John was absent the phone call had been taken by a clerk who happened to be passing John's office when the phone rang. The clerk did not describe himself to the caller and told Wow Ltd that Vera was a senior executive of the company, and the purchase would no doubt be in order.
Urban Pty Ltd decides that the phone case machine will not be profitable. They advise Wow Ltd that the contract is to be terminated on the grounds that it is invalid and unenforceable and because the company's constitution does not permit the company to engage in any activities other than furniture manufacturing; that under the Corporations Act 2001 (Cth), Wow Ltd is assumed to know this from the company's constitution; and, as the company had no capacity to enter into such a contract, Vera could not have had authority to act on its behalf.
Urban Pty Ltd advises Distrustful Bank Ltd that the loan agreement is terminated on the grounds that the company's constitution does not permit any borrowing over $50,000 without approval from the members in general meeting; that Distrustful Bank Ltd should have been aware of this requirement and had the responsibility to check to ensure such approval had been first obtained; and, that Vera had no authority to enter into such an agreement.
REQUIRED:
With reference to the Corporations Act 2001 (Cth) and case law, you are required to answer the following questions:
Discuss three advantages and disadvantages of incorporating Urban Pty Ltd compared with the type of business they were operating before registering Urban Pty Ltd. You are NOT required to use the 4-step process in answering this question.
[3 Marks]
Discuss the procedure that John and Vera would have had to follow under the Corporations Act 2001 (Cth) to register Urban Pty Ltd, including the creation of the companys internal management rules.
[4 Marks]
Identify and discuss the sections of the Corporations Act 2001 (Cth) that will make John liable if Urban Pty Ltd does not want to supply office furniture to Curtin University. In answering this question, note that the contract was entered into in January 2022 and the company was registered in July 2022.
[3 Marks]
With reference to the purchase of the machine used to produce colourful mobile phone cases, discuss the following:
Whether the contract with Wow Ltd can be terminated as Urban Pty Ltds constitution only permits the company to manufacture furniture and the company had no power to produce colourful mobile phone cases. (4 Marks)
Whether the contracts with Wow Ltd and Distrustful Bank can be terminated on the grounds that Vera had no authority to enter into such agreements. (8 Marks)
[12 Marks]
4 step process and writing style [3 Marks]
TOTAL: 25 MARKS
Note:
Reference your answers to cases and the Corporations Act 2001 (Cth) where possible. Please refer to the unit outline on how to reference your assignment using the AGLC system.
In answering the questions, a formal 4 step process is required. Answer each part separately.
You do not need to consider whether the directors have breached their duties when answering this question.
You do not have to discuss or apply Contract Law.
GUIDELINES FOR TEST 2
Where the question requires you to use the 4-step process, the 4 steps are:
Step 1: Introduce the area of the law
Step 2: Discuss the applicable law to solve and quote relevant cases and the sections of the Corporations Act 2001 (Cth) where applicable.
Step3: Apply the law to the facts to resolve the problem.
Step 4: Concluded
When writing your answers for Test 2, you cannot copy word for word from another source. You can paraphrase or summarise ideas or data obtained from another source, so long as you reference the source of your information using the AGLC footnote referencing style. More information can be found on this style from blackboard or the Curtin library web site: www.library.curtin.edu.au. A Bibliography is NOT required under the AGLC footnote referencing system.
Please note that plagiarism occurs when work of another person is presented as ones own, without appropriate acknowledgement or referencing. Plagiarism is a serious offence. This unit is ascribed to Turnitin, an electronic plagiarism detection service. Students should be aware that their work will be required to be submitted to this service to check for unacknowledged use of others work. Please read Test 2 submission process carefully to determine how to submit your test through Turnitin.
The research for legal principles and cases can be restricted to that referred in the prescribed textbook, lectures, and case studies. You will not be awarded marks for referring to cases or legislation outside these sources.
You should not exceed the word limit stated in the questions. The marks for each part should give an indication of the words that should be allocated for that part. You should check the rubric to ascertain how marks are allocated and the criteria that will be used to assess your level of achievement. Marks will be deducted for exceeding the word limit.
