Assessment

Word limit: 2000 words

Question 1-

Frances, Mary and Jane meet as students of dentistry. After graduating they form a dental practice in Sydney of which they are all equal partners and which they call Happy Smiles. They agree that, as partners, they will each have authority to enter into contracts of up to $ 20 000, but that contracts in excess of that amount require the express concurrence of all partners. When Frances and Mary are away on holiday overseas, Jane sees that a new medical supply company, Sleeping Gas Co Ltd is offering a special deal on the usual brand of anaesthetic gas used by Happy Smiles. She signs a contract in the name of Happy Smiles, to buy 6 cylinders of gas for $ 5 000 each. She also signs an order to buy a small truck from Dan's Auto Lot Ltd, thinking that, if she were to get a truck driver's licence, Happy Smiles could expand into the road haulage business. When Frances and Mary arrive back from their holiday, they refuse to authorise payment for the gas or the truck and, along with Jane ( who they are no longer talking to) have now been sued by Sleeping Gas Co Ltd and Dan's Auto Lot Ltd. Advise Frances and Mary as to their liabilities, citing relevant legal authority.

Question 2-

Mark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-10. A term of his contract was that if he should leave the company, he could not engage in the trucking industry in Queensland for five years. In 2011 he registered a company called Sunshine Trucks Pty Ltd. Mark owns 99% of the shares. The other 1% is owned by his brother, Greg, whom he elected as sole director and CEO. Sunshine Trucks operates from Townsville and carries goods all over Queensland. All contracts for haulage of goods are signed by Greg in the name of Sunshine Trucks Pty Ltd. Greg also signed a contract on behalf of the company, taking out a loan of $ 2 million from Grasping Bank in 2011 as start-up capital. The company did well during 2011, 2012 and the first half of 2013, but in July 2013 was not able to repay a loan instalment of $ 100 000 owing to Grasping Bank Ltd. Mark comes to you for advice after receiving two letters: One from United Trucks Pty Ltd requiring him to cease the operations of Sunshine Trucks Ltd in Queensland, the other from Grasping Bank Ltd threatening to sue him for $ 100 000. Advise him, citing all relevant legal authority.

Please note that you should assume that the restraint of trade clause in the contract that Mark had with United Trucks is valid under the law of contract, and so you should therefore not address that issue.

**Please check that your assignment complies with the rules contained in the Style Guide before you hand it in.**

Rationale

This assessment item will allow you to demonstrate competence in relation to the following learning outcomes:

Your ability to identify the different types of business organisation and the sources of the law regulating them

Your ability to identify and explain the rules of law regulating the internal relationship between the participants of each organisation and between the organisation and third parties Your ability to use legal research skills to apply the law to legal problems And more specifically:

Your knowledge of the law of partnership;

Your knowledge of the legal effect of incorporation ;

Your knowledge of the law governing the legal relationships within partnerships and corporations and the relationships between these types of business organisation and with outsiders ;

Your ability to complete an assessment task which is relevant to professional practice and the giving of advice in the workplace.