MCR009 Business Law Essay 2 Sample

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MCR009 Business Law Essay 2 Sample

Assignment Details

Topic

Analyse the relationship between contract law and the law of negligence in Australian business operations.

In your answer, explore how these legal concepts impact business relationships, influence risk management practices, and affect liability. Provide examples from real-world cases we have studied during the trimester where contract breaches and negligence claims have occurred simultaneously. Additionally, suggest practical strategies businesses can use to manage these risks.

The following instructions should be followed;

1. The use of Ai is not permitted

2. Legal cases referred to must be from the textbook or lecture material

3. Referencing to all research sources must be notated in the essay

4. Name, student number, and campus must be at the top of the essay

Further Instructions

Group size – Either individual or groups of 2 only

Groups of two must write a 1400-word essay on the above topic.

Individuals must write a 1000-word essay on the above topic.

Each individual including each in the groups of two will be then asked in the week following submission questions on their presentation to a maximum of 3 minutes by the lecturer or tutor. (This requires in class attendance).

Solutions

Introduction

The interconnection between contract law and negligence law is vital in deciding liability outcomes. It affects risk management strategies, and forming commercial partnerships in modern Australian corporate operations. The Australian Consumer Law (ACL) gives businesses a framework for navigating their legal rights and obligations, mainly in its parts addressing unfair contract terms and misleading conduct (Australian Government 2025). Using needed illustrations from actual Australian cases such as Carter v. Hyde [1923], Felthouse v. Bindley (1862), Powell v. Lee (1908), Leaf v. International Galleries [1950], and Carlill v. Carbolic Smoke Ball Company [1893], and others, this essay assesses the intersection and interaction of these legal ideas.

Discussion

The Impact on Business Relationships

Corporations must uphold the highest levels of integrity in their contract interactions due to the interconnected nature of these regulations. For illustration, the court decided in favour of the nephew in Felthouse v. Bindley (1862), when the uncle tried to impose his terms on the sale of a horse without the nephew's express consent (Clarke 2024). It shows the fact that silence does not equate to consent. This case acts as an illustration of how parties to a contract must interact for bond university assignment help in a clear and unambiguous manner in order for their commitments to be legally binding.

In the area of negligence law, where a failure to take due care might result in liability for accidental injury caused to another party. The need for good interaction is further observed. The theory of vicarious responsibility denies that in Australia, corporations are responsible for their staff unthinking actions done within the course of their service dealings (Australian Human Rights Commission 2019). Thus, corporations are required to make sure that their staff members follow their agreements and treat clients and dealers with the proper level of care.

Risk Management Practices

In Australia, the need of legal challenges from negligence or contract law errors, corporations require to introduce risk management plans. The severe internal process for contract negotiation and enforcement, training courses for workers on contractual and tortious duties, and repeated audits of company operations to spot any liabilities are a few instances. Stating in agreements that non-compliant offers will be considered is a vital measure that firms might apply to decreases the threats. risk. By making sure that all dealers are conscious of the firm’s will to work under non-standard conditions, this approach might avoid likely claims of confusing behavior under section 18 of the ACL (Australian Contract Law 2019). Further, corporations might use insurance commodities such as professional indemnity insurance to keep themselves from claims claiming negligence resulting from a breach of contract. This method boosts Australian legislation while lessening the threats.

Real-World Cases of Coexisting Liability

There are several real-life illustrations of contract violations that have outcomes in negligence cases throughout the Australian corporate area. Observing the case of Leaf v. International Galleries [1950], in which Leaf attempted to cancel a contract for a painting that was misrepresented as being by Constable (ipsaloquitur 2025). As a warning to firms on the timeliness of exercising contractual claims, the court recognized that the period between contract execution and the decision to restrict was unduly long. A vital case that showed unilateral offers made to the public under both contract law and the principles of misleading conduct is Carlill v. Carbolic Smoke Ball Company [1893]. The corporation's advertising was recognized as a legitimate contract offer that was accepted after certain conditions were met (Australian Contract Law 2024). This assesses the significance of the company's communication regarding its service promises and the need to fulfil them in order to avoid liability.

Contractual liability care is either strict or dependent on negligence. If the material was collected in confidence, as is frequently the case, the plaintiff might have an equitable claim for breach of confidence or a claim under the Australian Consumer Law. The case of Victoria Laundry v. Newman Industries (1949) is another vital case in this regard (accaglobal 2025). In this situation, the defendant lost money as an outcome of their delay such as a contract that was in gain. As per the foremost limb of the Hadley test, the defendant was considered guilty for the damage in gain. This damage is not for the loss resulting from that certain agreement (Australian Law Reform Commission 2019). Only if he had been aware of it at the time the agreement was made will he have been held accountable for that.

In concern to the equal compensations of injunction and specific performance, the common law preparations of damages and action for the price and "quantum meruit" are also under the breach of contract. Since a breach of contract is a legal duty. The purpose of the remedies is to place the claimant in the same circumstances as if the defendant were with the duty. As such, the plaintiff is placed in the similar circumstances as if the contract had been rewarded. Regarding loss, they might be separated into two features namely "reliance loss (prices got by the claimant on his part of the contract) and expectation loss" (merits that have been formed from the fulfilment of the agreement) (Australian Government 2023). On the other hand, in the case of GR Engineering Services Ltd v Investmet Ltd [2019] WASC 439, a current Australian case upheld Mance J's techniques in Hellespont Ardent when assessing the definition of "gross negligence" in connection to indemnification and exclusion clauses (KWMN 2023).

Conclusion

From the above, it is examined that there is a complex and vital interaction between contract law and negligence law in Australian business operations for risk minimization and proper business management. Thus, firms might have complicated contractual arrangements and prevent the law cases by being aware of the intersecting duties generated by both legal regimes. Firms might need to know about the want for transparent communication, due diligence, and risk management techniques by looking at important illustrations in Carter v. Hyde, Felthouse v. Bindley, Powell v. Lee, Leaf v. International Galleries, and Carlill v. Carbolic Smoke Ball Company. Corporations might form reliable relationships while protecting themselves from potential liabilities by being more aware of their legal responsibilities under the ACL and the duty of care standards in cases of carelessness. 

Reference list

? 2024, Carlill v Carbolic Smoke Ball, Australian Contract Law, viewed 24 March 2025, <https://www.australiancontractlaw.info/cases/carlill>.
accaglobal 2025, Key aspects of the law of contract and the tort of negligence | ACCA Qualification | Students | ACCA Global, www.accaglobal.com, viewed 24 March 2025, <https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f4/technical-articles/key-aspects-of-the-law-of-contract-and-the-tort-of-negligence.html>.

Australian Contract Law 2019, ACL section 18, Australian Contract Law, viewed 24 March 2025, <https://www.australiancontractlaw.info/legislation/acl/s18>.

Australian Government 2025, About Australian Consumer Law, Consumer Law, viewed 24 March 2025, <https://consumer.gov.au/about/australian-consumer-law>.

Australian Human Rights Commission 2019, Vicarious liability, Australian Human Rights Commission, viewed 24 March 2025, <https://humanrights.gov.au/our-work/employers/vicarious-liability>.

Australian Law Reform Commission 2019, Negligence | ALRC, ALRC, viewed 24 March 2025, <https://www.alrc.gov.au/publication/serious-invasions-of-privacy-in-the-digital-era-alrc-report-123/7-fault/negligence/>.

Austrlaian Government 2023, Laws affecting contracts | business.gov.au, business.gov.au, viewed 24 March 2025, <https://business.gov.au/legal/contracts-and-tenders/laws-affecting-contracts>.

Clarke, J 2024, Felthouse v Bindley, Australian Contract Law, viewed 24 March 2025, <https://www.australiancontractlaw.info/cases/database/felthouse-bindley>.
ipsaloquitur 2025, Leaf v International Galleries - Case Summary, IPSA LOQUITUR, viewed 24 March 2025, <https://ipsaloquitur.com/contract-law/cases/leaf-v-international-galleries/>.

KWMN 2023, What is the difference between ‘gross’ negligence and ‘normal’ or ‘mere’ negligence under Australian law? - KWM, Kwm.com, viewed 24 March 2025, <https://www.kwm.com/au/en/insights/latest-thinking/what-is-the-difference-between-gross-negligence-and-normal-or-mere-negligence-under-australian-law.html>.

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