Commercial Law Notes. - Lecture notes, lectures 1 - 12 PDF

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Commercial Law LAW2442 Week 1. Introducing the Law 1. Law and life 2. The nature of Law Law The set of rules made the state, and enforceable the prosecution of litigation Business law: is the set of rules regulating businesses and business activities made the state and enforceable prosecution or lit...

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Commercial Law LAW2442

Week 1. Introducing the Law 1. Law and life 2. The nature of Law Law is;  The set of rules  made by the state, and  enforceable by the prosecution of litigation Business law: is the set of rules regulating businesses and business activities made by the state and enforceable by prosecution or litigation Purposes of law  resolves disputes  maintains social order  preserves and enforces community calues  protects the disadvantaged  stabilises the economy  prevents misuse of power Categories of law

Reasons the law would change  political change  need to fix problems with the law  changing community values  pressure from lobby groups  changing technology 3. Justice, ethics and power Justice: can be understood as fairness such as fair compensation or punishment, a fair decision or a fair distribution of resources *The relationship between law and justice may not be necessary but it is desirable There are three types of justice  Distributive justice  Procedural justice  Retributive justice A legal choice is one that complies with the law; an ethical choice is one that is recognised as ‘good’ or ‘right’ *Law and ethics often correspond but a decision that is legal may not be ethical and a decision that is ethical may not be legal Whilst the law is more than merely politics, the law is shaped by power and politics  Particular laws are usually the expression of a political ideology  Legislation is made by politicians to implement government polices and achieve political objectives 4. The sources of law The three arms of government

Separation of powers  Theoretically, the legislature, the executive and the judiciary should remain functionally separate as far as possible  In Australia, member of the executive (Prime Minister/Premier/Chief Minister and other Ministers) are also members of the legislature (Parliament) which means that the legislature and the executive are not strictly separate. Forms of government

Types of legal systems 1. Civil law  Most common  The primary source of law is legislation in the form of codes, statutes and constitutions; case law is generally not recorded and not recognised as a souce of law.  Examples: France, Germany, Russia, China, Japan, Thailand, Korea 2. Common law  Legal systems based on the British legal system  The two main sources of law are legislation and case law; the judiciary is much more powerful and influential in common law countries than civil law countries  Examples: United Kingdom, Australia, Canada, New Zealand 5. The Australian legal system Key Characteristics

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Liberal Democracy – laws are made by representatives who exercise their power subject to the rule of the law and to the various Federal and State constitutions. This is what the executive government consists of. Common law legal system – our legal system is based on the British model Constitutional monarchy – the Head of the State is Elizabeth II Federation – In addition to the national/federal/commonwealth government there are various State governments that are not subordinate to the federal government Separation of powers – laws are made by parliament, administered b an executive council and interpreted and applied by the courts

6. Responsible government – the ministers comprising the executive are elected representatives who are also members of and are answerable to the legislature. History • For tens of thousands of years prior to British settlement there was in existence in Australia a sophisticated and effective legal system: the Indigenous Australian legal system. • Unfortunately, the British did not recognise or acknowledge the Indigenous Australian legal system upon their arrival in the 1700s. • Australia was declared to be terra nullius at the time the colony was established. • Australia was deemed to have been settled by Britain rather than conquered by Britain or acquired by treaty. • British settlers brought British law with them according to the doctrine of reception. • The New South Wales colony and the other colonies subsequently established in Australia were initially controlled directly by the British government as represented by the colonial Governor. • As time passed, the British government granted the Australian colonies increasing levels of independence. • By the late 1800s, six relatively independent self-governing colonies existed on the Australian continent, each with its own constitution, legislature and court system. • The Commonwealth of Australia came into existence on 1 January 1901. • Each of the colonies, now States, gave up certain powers and rights to the new Federal government, and at the same time retained their individual identities and substantial legislative authority. • Today, Federal, State and Territory governments in Australia are free from interference by the British Parliament. • The final step will be changing from a constitutional monarchy to a republic: but are we ready?

Week 2A. Understanding the Australian Legal System 1. The Australian Constitution Three levels of government 1. Federal 2. State 3. Local Three arms of government 1. The executive (government in power) - governs 2. The legislature (whole parliament) – makes law/legislation 3. The judiciary (courts/judges) – interprets law Relations of Power Exclusive powers (Federal Parliament Only)  Examples:  Customs  Defence  Currency  Territories

Concurrent Powers (Federal & State Parliaments)  Examples:  Taxation  Marriage  Banking  External Affairs

Residual Powers (State Parliaments Only)  Examples:  Education  Property  Crime  Health

Amendments to the constitution must;  Be passed by an absolute majority of both houses of the Parliament  Be put to the Australian voters in the form of a referendum and passed by; I. A majority of voters and; II. A majority of states * Of more than 40 attempts to amend the Constitution since Federation, only 8 have been successful 2. The Legislature  Power to make law  Exercised by Federal parliament and various state/territory parliaments

Lower House - House of Representatives  ‘People’s house’  Composed of roughly 150 electorates  Political party with majority of seats in the House of Rep’s forms the executive government  Prime Minister is traditionally a member of the lower house

Upper House – Senate  ‘State’s house’  Protects the right of the states  Includes an equal amount of Senators from each State (12) and the territories are represented by 2 senators each Parliament process 1. Proposal 2. Drafting of Bill 3. Lower House 4. Upper House 5. Royal Ascent o Governor General (traditionally acts on advice of executive government) 6. Commencement o Act will commence from; - Date specified in the Act or; - A date to be fixed by proclamation, or; - From the date of Royal Ascent (for State Acts), or; - 28 days after Royal Ascent (Federal Acts) Pressures to change the law  Public servants  Law reform body  Media  Courts  Government policy  Lobby groups Double-dissolution  If Upper House fails to pass a bill already passed by the Lower House and;  After three months the Bill is one again passed by the lower house and again rejected by the Upper House  Governor General is empowered to dissolve both houses Five kind of acts 1. Original Acts 2. Amendment Acts 3. Repealing Acts 4. Consolidating or reported Acts 5. Reviving Acts 3. The Executive  Power to administer the law (i.e. carry on the business of the government and maintain order/security)  According to the Australian Constitution it is vested in the Queen and exercisable by the Governor-General as her representative  Yet traditionally the Governor-General is to act on the advice of the Federal Executive Council (various elected Ministers of Parliament) Appealing a decision can be via;

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The ombudsman Freedom of information legislation The Administrative Appeals Tribunal Judicial review

Delegated legislation  Often the parliament will pass legislation seting out the overall principles and objectives of a particular regulatory scheme but then delegate to a branch of the executive government the authority to make detailed rules, regulations or by-laws referred to as ‘delegated legislation’ 4. The Judiciary  Power to interpret the law and to apply it in the resolution of particular disputes  Exercised by the courts and their respective judges Court Hierachy

Jurisdiction  Refers to the scope of the court’s authority  The original jurisdiction of a court is the power to hear a case for the first time, as opposed to appellate jurisdiction, when a court has the power to review a lower court's decision.  Criminal jurisdiction is a term used in constitutional law to describe the power of courts to hear a case brought by a state accusing a defendant of the commission of a crime. Civil jurisdiction is where the subject-matter to be tried is not of a criminal nature. *The system of dispute resolution used in Australian courts is called the ‘adversarial system’ which can be contrasted to the ‘inquisitorial system’ used in courts in civil law countries Court procedure 1. Decision to litigate 2. Commencement of proceedings

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Pre-trial The trial The decision Appeal

Judge decisions 1. Reason o Ratio decidendi – the legal principle o Obite dicta – anything else said/provided (evidence, persuasive precident etc) . Outcome  

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The decision of most courts are recorded and published which lead to the creation of a second source of the law – case law According to the doctrine of precedent, in reaching a decision about a question of law the court must follow the decisions of courts higher than itself in the same hierarchy of courts within the particular jurisdiction – these are also called binding precedents Persuasive precedents refer to decisions of courts outside of the particular hierarchy

Other forms of resolution  Alternative Dispute Resolution (ADR)  Negotiation, mediation, conciliation, arbitration

Week 2B. Exercising legal skills 1. Finding the law

Primary legal materials  Legislation - Competition and Consumer Act 2010 (Cth) *’(Cth)’ refers to the jurisdiction  Case law – Donoghue v Stevenson [1932] AC 562 *’AC’ refers to the Law report and ‘562’ to the page number Secondary legal materials  Not binding but can be persuasive 2. Reading the law Ratio decidendi: (reason for decision) is the part of a judges decision that sets out the legal principle upon which the decision was based, and which is binding precedent Obiter dicta: (saying by the way) is that part of a judge’s decision other than the legal principle upon which the decision was based – identification of relevant evidence, discussion of alternative legal principles, alternative decisions if facts had been different etc. Rules of interpretation

literal rule

GENERAL RULES

golden rule purposive approach context rule

RULES

class rule inclusions and exclusions SPECIFIC RULES give each to each general and specific earlier and later

Statutory interpretation: a number of general and specific rules have been developed regarding reading and interpretation of legal texts – statutory interpretation refers to the interpretation by the courts in deeming whether the legislation applies or not General rules  Literal rule – Always begin by reading a legal text literally, with words and phrases given their ordinary and natural meanings:  Golden rule - If reading a text literally leads to an absurd result, modify the literal meaning so as to avoid the absurdity:  Purposive approach - If reading the text literally does not reveal the meaning of the text, refer to the apparent purpose of the author when drafting the text. Sometimes the Act itself contains an object clause - the courts are willing to admit extrinsic material in cases where there is ambiguity:  Contextual approach – According to this approach, rather than interpret the words used in the Act individually, a court should take into account the various contexts of those words

Specific Rules - exceptions to the literal rule include:  the context rule,  the class rule,  the give each to each rule,  the inclusions and exclusions rule,  the general and specific rule, and  the earlier and later rule. Specific rules cont.  The act should be read as a whole  Technical words should be given their technical meaning  Interpret statutory provisions that impose a penalty narrowly  The mischief being remedied if there is ambiguity  We should presume that, in the absence of express words to the contrary, legislation is not intended to: - be extra territorial - be retrospective - contradict established principles of common law or infringe established common law rights - bind the Crown and; - words have their current meaning

3. Thinking like a lawyer Solve legal problems

Example: Section 30 of the Offences Against the State Act 1939 provides that a suspect can be detained by the police for questioning at ‘a police station, a prison, or some other convenient place’. X is detained in a police car for a number of hours. Is this a lawful detention 1. Issue  Is a police car a ‘convenient place’ within the meaning of the OATS Act? 2. Identify the relevant legal rules  According to the literal rule, we should always begin by reading a legal text literally, with words and phrases given their ordinary and natural meanings. (Fisher v Bell)  One exception to the literal rule is the class rule. According to the class rule, where two or more specific words are followed by a general word, the general word is limited to the class created by the specific words. (DPP v Farrell) 3. Step 3: Apply the rules to the facts  Applying the literal rule, a police car can be a ‘convenient place’.  However, applying the class rule to the phrase ‘a police station, a prison, or some other convenient place’, the general words ‘convenient place’ are limited to the class created by the specific words: a type of building. 4. Conclusion  A police car is not a ‘convenient place’ within the meaning of the OATS Act.  The police are in breach of the OATS Act.

4. Writing like a lawyer Formality  Legal writing is formal rather than conversational.  The tone of the writing is serious, polite and respectful.  Do not use informal terms such as: - contractions such as ‘can’t’ or ‘wouldn’t’, - slang or colloquialisms, or - offensive terms. Clarity  In writing a legal text in plain language: - think about the structure, - think about the content of each sentence and paragraph, - think about the language used, - think about the choice of words, and - design the document to help the reader. Drafting a simple contract  Recall that a contract is a legally enforceable agreement between two or more parties.

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A contract contains the promises made by each of the parties. If either party fails to keep those promises, they will be in breach of the contract. To draft a contract: - Step 1: prepare an outline. - Step 2: draft the contract by listing the topics in logical order with each topic in its own substantive clause. - Step 3: test and revise the contract.

Week 3. Causing Harm 1. Causing Harm Forms of legal liability

2. Deliberately causing harm Tort: A civil wrong (other than a breach of contract) Tort of trespass

Tort of trespass to land • A person commits the tort of trespass to land if: 1. they interfere with another person’s exclusive possession of land; and 2. the interference is direct; and 3. the interference is either intentional or negligent; and 4. there is no consent or lawful justification for the interference. 5. Kelsen v Imperial Tobacco Co Ltd (1957) Tort of trespass to goods • A person commits the tort of trespass to goods if: 1. they interfere with another person’s possession of goods; and 2. the interference is direct; and 3. the interference is either intentional or negligent; and 4. there is no consent or lawful justification for the interference.

Tort of trespass to the person • A person commits the tort of battery if: 1. they cause some sort of physical interference with the body of another person; and 2. the act is direct; and 3. the act is either intentional or negligent; and 4. there is no consent or lawful justification for the act. • A person commits the tort of assault if: 1. they cause another person to develop an apprehension of imminent physical contact; and 2. the act is direct; and 3. the act is either intentional or negligent; and 4. there is no consent or lawful justification for the act. • A person commits the tort of false imprisonment if: 1. they cause another person to be totally restrained; and 2. the act is direct; and 3. the act is either intentional or negligent; and 4. there is no consent or lawful justification for the act. Tort of nuisance • A person commits the tort of private nuisance if:

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1. they interfere with another person’s use and enjoyment of private land; and 2. the other person has an interest in that land (e.g. they are the owner or a tenant); and 3. the other person suffers actual harm or damage; and 4. the interference is indirect; and 5. the interference is either intentional or reckless; and 6. the interference is sustained and unreasonable. A person commits the tort of public nuisance if: 1. they interfere with another person’s use and enjoyment of public land (e.g. a street or a park); and 2. the other person suffers actual harm or damage over and above that suffered by members of the public generally; and 3. the interference is indirect; and 4. the interference is either intentional or reckless; and 5. the interference is sustained and unreasonable.

Tort of defamation • A person commits the tort of defamation if they publish to a third party, in spoken or written form, a statement about another person that would damage the reputation of the other person. • The other person must show that: 1. the statement about them was defamatory; and 2. the statement identified them; and 3. the statement was published to a third party.

Tort of deceit • A person commits the tort of deceit if: 1. they make a statement of fact to another person knowing that it is false; and 2. they make the statement with the intention that it be relied upon by the other person; and 3. the other person relies upon the statement; and 4. the other person suffers harm as a result of relying upon the statement. Tort of passing off • A person commits the tort of passing off if: 1. they make a misrepresentation (expressly or by implication) that their goods or services are connected with another person or have the other person’s endorsement or approval; and 2. the misrepresentation is made in the course of a trade; and 3. the misrepresentation is intended to deceive potential purchasers. 4. Pacific Dunlop v Hogan (1989)

Week 4. Negligence 3. Carelessly causing harm Tort of Negligence • A person commits the tort of negligence if they carelessly cause harm to another person. • Negligence is by far the most common tort: most acts that cause harm to other people are the result of carelessness rather than intent. • Since the civil liability reforms following the insurance crisis the law of negligence is now a combination of case law and statutory rules. •

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A person commits the tort of negligence if: • they owe the other person a duty of care; and • they breach the duty of care; and • their breach causes the other person to suffer reasonably foreseeable harm. Requirements 1) Duty of care o In most cases the establishment of the existence of a duty of care will be relatively straightforward, provided that the relationship between the parties falls within the established categories of duty of care.  Motorists owe a duty of care to other road users.  Doctors owe a duty of care to their patients.  Manufacturers owe a duty of care to people who use their p...