Commercial Law of New Zealand - Assignment Example

Commercial Law Prepared by Submitted to Length 2293 words Part A Contract Law A contract is formed when there is a consideration regarding the exchange of value between the parties. In case of buying or selling of a car the value of car can be taken as consideration. The customer agrees to pay for car and money payable is taken as consideration. The deal materializes when the consideration is paid. This is the simple contract. When the car is bought on credit, the value of the car and the credit given is taken as consideration. The parties of the contract must abide to the contract and the party taking the credit should pay according to the terms mentioned in the agreement. The consideration whether it is credit or money will flow between two parties or men. The consideration was made integral part of the contract in New Zealand commercial law. (Net law, 2007) In case of trade me contract the seller cannot refuse to supply the thing that is agreed online with the customer.  This kind of transaction is possible when the customer makes a contract with the professional traders who are regulated by online contract and commercial law. In this case the customers’ interests are protected. (Trademe, 2007) Regarding majority of disputes in contracts arise due to the drafting of contracts and the implied terms in them. In general the implementation of the terms creates disputes when the unexpressed terms need to be implemented according to law. In implying a term to the contract according to law, the court considers the intentions of the parties according to the expressions in the contract. This implication or application will be regarding arbitration, agency, licenses, sales of goods, supply of services and real property. The implying of terms in case of a dispute will be decided by court according to the established principles of law. The terms that imply and reflect the intentions of the party are; non contradiction of any term of the contract, being reasonable and equitable, giving business efficacy to contract, it should go without stating, capable of being clearly expressed. (Gillhams Solicitors, 2007) By considering the above facts it will be viable to consider a contract on ‘trade me’ regarding selling a car to know about the implication of terms. In this context the selling of a car in ‘trade me’ can be considered. The contract about selling of the car involved the repossessed vehicle guaranteed clear title at the point of the sale. The implication of terms comes at the point of the sale. It was termed that the sale will be done ‘as is where is’ basis. From the side of the buyer the term to be implemented in the contract is to pay the amount payable at the time of buying. According to the terms of the contract, the buyer must pay the amount within 3 days of the auction. One of the express terms in the contract is to implement the price of the car. The highest bidder will get the vehicle according to the contract between ‘trade me’ and the buyers. The express terms that are to be implemented from the seller are as follows according to the contract. The driver seat will have a rip as it is expressed in the photo. The radio aerial has been broken in the photo and this comes under the term that can be excluded from the implementation of the contract. This is due to the conveying of the intention while making a contract. There is no need for the seller to repair it while selling the car as the intention of seller or buyer are ready to buy the car in that condition. These express terms that are expressed as per the intentions of trade me and the buyers can be implemented while the sale of the car. (trade me, 2007) According to consumers guarantee act 1993 the buyer can have a right of redress against suppliers according to the 16th chapter of the act. This chapter gives the buyers, the right to redress against suppliers about materials supplied (in this car), when it failed to comply with the conditions mentioned in the contract at the time of sale. Though there is no written contract between buyer and seller, the buyer and seller must abide to the rules. The guarantee set by the seller at the time of advertisement of the auction will be bind over on him to be implemented and court considers it as a contract between seller and buyer. If it does not happen the buyer can get compensation from the seller. (Netlaw, 2007) Part B Task A Law of Torts In this case Bodo’s factory was at loss due to William’s negligence. This comes under negligence of tort if there is a written contract between the factory and William. Though there is no written contract, the person agreed to work for a company or for another person is responsible for the loss when the damages occur due to the lack of quality in his work according to common law. The companies or the individuals who breach the contract by neglecting the quality of work should be made responsible for the loss incurred. In this case the Bodo’s factory machinery was spoiled due to the removal of the tiles by the incidence of rain. If the tiles are arranged nicely the company could have avoided the damage. This can be termed as the negligence tort under common law and in New Zealand. The company can sue William for the damages occurred due to his negligence in his work, if he is not the employee of the organization. (Shepard, 2003) To compare the above case with another one, the Daniel and Sondra Estella case with Greg Allen construction Inc is suitable. Estella gave contract to Allen construction Inc to renovate her home. She questioned the quality of work and the issue of payment was dead locked. Though the court held company responsible for the lack of quality the court appeals decided that the Allen who supervised the work should be made liable to pay the loss for Estella. The same principle can be applied in the case of Bodo’s company and William and the latter can be mad liable for the financial loss. (Shepard, 2003) Conclusion: According to New Zealand’s Law no body can sue other when the loss is not caused due to the lack of care. In the above mentioned case the negligence of William is a cause for the damage occurred. So Bodo’s company can claim the compensation equal to the amount that will be with the company in the absence of loss. Task B The case of Frank and Angela also comes under negligence of tort. While writing a book the author will get the royalty and the publisher the profit from the sales of the book. As a result the intentions in the publication of the content of the book should be taken into account. In case of a book that is fictious like a novel and a science fiction, the author can declare that the content in the book is fictious and he cannot be responsible for any coincidence. This is not in the case of technical, educational and financial matters. The book published by Frank is the advice given by him and by selling that his intention is to convey the advice to its readers prompting them to implement it to get profit. The writer cannot escape from the responsibility of the consequences faced by the readers who implemented the advice. The losses incurred by the readers by implanting fall under civil wrongs committed by the Author. The writer is getting royalty or the remuneration when the book is bought by individuals or public bodies. When the advices show the negative effect the person who got profit from the publication should bear the responsibility under tort law of New Zealand. This is because this can be termed as civil wrong that is occurred due to the lack of care that is supposed to be a necessity in giving an advice. This involves unliquidated damages. This is not a crime or a breach of contract. The principle involved in the tort is to compensate the individuals from the harm done by others. Here the advice in the Frank’s book has done harm to Angela and she should be compensated from the Author or publisher of the book. This will be made burden on the wrong doer. One cannot compensate to all the persons who are at loss due to implementation of the advice of the book. When Author pays any compensation for Angela he must be prompted to declare that the advice given in his book is wrong. This will avoid harm to the civil society from the advice of the book. (Keeping it legal, 2006) An example can be taken in the case of Angela to support her case. In 2001 A race organizer Astrid Anderson was prosecuted for not taking enough precautions for the race she conducted. It is the duty of the organizer to take enough precautions and in the same manner it is the duty of the Author to be careful while advising his readers about financial matters. (Keeping it legal, 2006) Conclusion: In the case of Angela she must prove that she is the person seeking information or advice relying on the book published by Frank. She must prove the reasonable care provided by Frank regarding the advice given by him in the book is absent. It will be helpful for winning the case if she is able to prove that Frank knows his advice will be relied upon. As this is not a crime or breach of contract, this comes under negligence of tort and the responsible person can be asked to compensate for the loss. There is a sharp difference in the two cases. In the first case the loss can occur only to Bodo’s company and in the second case the loss is possible for every person who read the book. The burden of the compensation if materializes will be heavy for Frank if he does not with draw his advice by public statement.( Bruce James Cameroon, 2007) Part C Sole Trader: The sole trader is the person who can trade under his own name or with a registered name for his business. If the marketing of the trader is great he can appear in the form of large corporation. The sole trader can have no formal or legal processes in setting up the business. The person who is termed as owner is entitled to all profits and liable for taxes, wages and debts involved in the business activities.( Inland revenue, 2007) Partner: In New Zealand and in any common law country, the partnership is of two types; the domestic and commercial. The commercial partnership is regarding the trading and the marketing activities in the business. The activities and duties of the partners in the agreement will be according to the agreed aspects in the agreement. This is different and some times bigger from the sole trader as there will be more than one persons acting in the business. (New Zealand Government, 2005) Limited Liability Company: This is a legal entity that is a hybrid between a partnership firm and a corporation. The owners of the firm are called as members and have the benefits of the partnership. They can avail the limited liability characteristics of the corporation. This can be termed as the one that exists in New Zealand similar to the private limited company in the common law countries. This is because the LLC members are shielded from personal liability regarding debts and obligations of the company. The debtors and creditors cannot sue the members legally for the debts or credits the company owe. (lawyers.com, 2007). 1. In case of a partnership company there will be the presence of more than one partner who invest in the company. The contracting parties can approach any partner to fulfill their contract with the partnership firm. (lawyers.com, 2007,) 2. the decisions of any partner after implementation are bind on the partnership firm. This means all the partners are collectively liable for the decisions taken by single partners regarding the business activities. In case of liability of share holders regarding credit made by the directors; it is not possible. This is due to the fact that in the partnership firm, the liability will be on the assets of the company but not on the assets of the individuals. So the company will be liable for the director’s credit but not the share holders. This is because the share is a bundle of rights and not the ownership of assets of the company. As the share holder cannot claim the ownership he cannot be made liable for the credits of the directors. (business associations, 2002) 3. Though there is no partnership deed, the law prevails over the partnership firm. The partner cannot demand his share and assets without any notice. If it has been done so, the remaining partners’ should decide in majority to accept or to reject the demand of single partner. If it is a double partner firm, the partner can demand his share or assets at the end of the financial year. (Business associations, 2002) 4. As a share holder is having a right but not ownership he can sell his right to the other share holders. If the other share holders are not in a position to buy the share he is entitled to sell his share to any other person who is not part of the firm. The person buying the share will be a part of the firm after buying the share of the shareholder. (Business associations, 2002) References: 1. Trademe, 2007, Online Auctions, Trade me, ,electronic, 15-9-07, http://www.trademe.co.nz/Partners/Content.aspx?id=11 2. Netlaw, 2007, Civil Law, Net Law, ,electronic, 15-9-07, http://www.netlaw.co.nz/civil.cfm?PageID=70 3. Shepard, 2003, judgment, Indiana supreme court, ,electronic, 15-9-07, http://www.in.gov/judiciary/opinions/archive/11050301.rts.html 4. lawyers.com, 2007, limited liability company, lawyers.com, ,electronic, 15-9-07, http://business-law.lawyers.com/business-enterprises/Limited-Liability-Company.html 6. Gillhams Solicitors, 2007, Briefing Note - Contracts & Disputes: The Importance of Implied Terms, Gillhams Solicitors, , electronic, 17-9-07, http://www.gillhams.com/articles/141.cfm 7. trade me, 2007, Toyota corona GX, trade me, ,electronic, 17-9-07, http://www.trademe.co.nz/Trade-Me-Motors/Cars/Toyota/auction-118535807.htm?p=1 8. Bruce James Cameroon, 2007, Torts law of, An encyclopedia of New Zealand, ,electronic, 17-9-07, http://www.teara.govt.nz/1966/T/TortsLawOf/TortsLawOf/en 9. Inland revenue, 2007, Taxing sole trader, Inland revenue, ,electronic, 17-9-07, http://www.ird.govt.nz/how-to/taxrates-codes/bit-taxrates-soletradertax.html 10. Business associatins, 2002, Law 315, outlines.law.uvic.ca, ,electronic, 17-9-07, http://outlines.law.uvic.ca/courses/businessassociations/Business%20Associations%20315%20Fall2002%20jwmills.doc 11. New Zealand Government, 2005, discussion document, Partnership act, ,electronic, 18-9-07, http://taxpolicy.ird.govt.nz/publications/files/html/partnerships/c4.html 12. Keeping it legal, 2006, Torts, Keeping it legal, ,electronic, 18-9-07, http://www.keepingitlegal.net.nz/learn-more/torts-criminal-offences/#elements 13. Keeping it legal, 2006, facts sheet, Keeping it legal, ,electronic, 18-9-07, http://www.nzfvwo.org.nz/keepingitlegal/kilfactsheets/16.pdf Read More