University of South Australia

SCHOOL OF LAW
BLW 17 Business Law
ASSIGNMENT COVER SHEET

Students Name: Nakisha Holdsworth

ASSESSMENT 3: LEGAL ANALYSIS

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 ASSESSMENT
FEEDBACK SHEET
BLW17 BUSINESS LAW
Assessment Item 3 LEGAL ANALYSIS
(2,500 words, Weighting 50%)

KEY ASSESSMENT PERFORMANCE OF THIS COMPONENT

CRITERIA
FAIL PASS CREDIT DISTINCTI HIGH
ON DISTINCT
ION

Q1. Knowledge and

understanding of
1
relevant concepts
Application, analysis
and conclusion

Q1. Knowledge and

understanding of
2
relevant concepts
Application, analysis
and conclusion

Q2. Knowledge and

understanding of
1
relevant concepts
Application, analysis
and conclusion

Q2. Knowledge and

understanding of
2
relevant concepts
Application, analysis
and conclusion
Referencing
Consistent and accurate
use of the Harvard
Referencing System
Spelling, grammar and
format

PLEASE READ CAREFULLY THE COMMENTS MADE THROUGHTOUT YOUR

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OVERALL COMMENTS

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This form meets the requirement of UNISAs Code of good Practice: Student
Assessment

Question 1.1: Contracts

Issue

Is the written contract valid?

Rule

Minors Contracts (Miscellaneous Provisions) Act 1978 (SA) section 6 Approval of

Minors contract by court

Age of Majority (Reduction) Act 1971 (SA), section 3 - Removal of disability of

infancy from persons over the age of eighteen years

Application

The written contract does not bind Mickey and cannot bind him regardless of the

circumstances as he is a minor and the contract has not been approved of in court.
Micky had no knowledge of the written contract, so he did not have the required intention to

enter into contractual relations on those terms (James 2014, p. 232).

Without an offer and acceptance between myself and Mickey there is no meeting of the

minds and thus there is no binding contract (James 2014, p. 232). Further to the above, only

the person to which an offer is addressed can accept the offer (James 2014, p. 236). The

acceptance from Mickeys mother is not an acceptance at all as she is not a party to any

contract between Mickey and myself (James 2014, p. 236). We are not aware of Mickeys

mother being an agent to act on behalf of Mickey and therefore she does not appear to have

the ability to make contracts for Mickey, she can only guarantee an agreement that is made by

Mickey and myself (Minors Contracts (Miscellaneous Provisions) Act 1978 (SA) sec 6).

In any event, I cannot compel Mickey to perform that written agreement as he is not a party

to it. Whilst there isnt a written contract there is a verbal agreement between Mickey and

myself. I offered him $15,000 to come to the event at sports bar. The offer was for the

evening. Mickey communicated his acceptance by phone saying he would be delighted to

be there and go on stage.

For the formation of a contract there must be an agreement between the parties, the parties

must have intended to create legal relations and each party has provided consideration. In this

case, there has been a clear agreement, the offer by me was clearly accepted by Mickey and

that acceptance was communicated to me (James 2014, p. 231, 232). Once an offer is

accepted an agreement and possibly contract exists from that moment (James 2014, p. 232).

It should be noted that as a minor Mickey may be able to enforce a contract against me, I

cannot enforce the contract against Mickey, however, This does not invalidate the contract

between Mickey and myself.

There is no indication that the parties did not intend to create legal relations. The fact that

Mickey is a nephew of Adam may have provided an indication that this was an informal non-

contractual relationship and the courts will presume that domestic agreements between family

members for example, are not intended to the parties to be legally binding, as seen in the case

of Balfour and Balfour [1919] 2 KB 571. In this situation, Mickey is Adams nephew, not

mine, so it could be argued that the domestic agreement presumption does not apply (James

2014, p. 242). The amount of money offered is large and it is offered for a commercial

purpose, to attract people to the sports bar. The commercial importance of Mickeys

attendance is confirmed by the response to the advertisement in the Advertiser. In the

circumstances, the intention of the parties to enter into binding legal relations is clear and the

domestic agreement presumption either does not apply or would be easily rebutted due to my

involvement, not Adams (James 2014, p. 242).

The final requirement for formation of a valid contract, consideration, is also present as a sum

of money, a price, has been offered for a defined service (Mickeys appearance) (James 2014,

p. 232).

Conclusion

The written contract was invalid even though it was signed by his mother as she is not known

to be an agent of Mickey and even if Mickey did sign it, it also would have to be accepted by

the court to make it fully binding and enforceable against Micky (Minors Contracts

(Miscellaneous Provisions) Act 1978 (SA) s 6).

There is a verbal contract between Mickey and myself and terms of the verbal contract are:

Mickey will attend for the evening, Mickey will go on stage and I will pay him $15,000.
Although Mickey is a minor, that does not invalidate the verbal contract as a minor can enter

a contract and enforce it themselves, but there may be issues with enforcing contracts against

minors (Age of Majority (Reduction) Act 1971 (SA), s.3; James 2014, p. 266, 267).

Issue

Are the clauses of the written contract conditions or warranties?

Rule

Application

Assuming there is a written contract, the terms numbered 1, 2 and 3 are warranties. If one of

these terms was absent, for example, if Mickey did not agree to do An interview with the bar

owner on stage, but he did agree to terms 2 and 3, it is unlikely that I would have refused to

enter into the contract. The terms 1, 2 and 3 are warranties as they are of lesser importance

overall since Micky would still be showing up on the night which is the actual condition of

the contract in order for him to be paid. This was seen in the case of Bettini v Gye (1876) 1

QBD 183 where Bettini was a singer that was unable to attend the required amount of

practice however was able to perform and therefore did not break the fundamental condition

of her contract but instead breach warranty.

This means that if there was a breach the contract cant be terminated however I could still

ask for damages or other remedies if any of the above terms were in fact breached. This is of

course provided there had been a binding legal contract between Mickey and myself, which

as explained above is not the case (James 2014, p. 314).

Conclusion

The clauses in the contract which are numbered 1, 2 and 3 are warranties this is seen through

the definition of warranties as they suit the clauses perfectly. The condition of the contract is

that Micky will show up on the night and will receive $15,000 for this service. The case of

Bettini v Gye (1876) 1 QBD 183 supported my defining of the clauses into warranties and

conditions. It should be noted due to the contract being invalid, these warranties do not apply

to Mickey.

Issue

If a breach of contract has occurred, can you refuse to pay and/or cancel the contract?

Rule

Age of Majority (Reduction) Act 1971 (SA), section 3 - Removal of disability of

infancy from persons over the age of eighteen years

Application

As per the discussions above I cannot refuse to pay Mickey the $15,000 agreed upon in the

verbal contract as the contract can be enforceable against me yet as he is a minor but I cannot

enforce the contract on Mickey to complete the clauses in the contract (Age of Majority

(Reduction) Act 1971 (SA), s.3). Mickey did complete the condition of the verbal contract

and whilst he didnt complete the warranties in the written contract they were invalid as

explained above.

Conclusion

Therefore, I must pay Micky the $15,000 as he did show up on the night even though he

didnt complete the warranties in the written contact.

Question 1.2:

Issue

Do you have any rights under the Sale of Goods Act (SA)?

Rule

Sale of goods act 1895 (SA), Part 1, Division 6, Section 15 - Sale by sample section
Sale of goods Act 1895 (SA), Part 5, Division 2, Section 52 - Remedy for breach of

warranty

Application

According to legislation I do have rights under the Sale of goods Act 1895 (SA), the towels

are considered a good as they are a tangible item of my property and therefore are covered.

As the towels were bought based on the sample provided, the law states that there are implied

conditions of sale that the bulk of goods have to be of similar quality to the sample and that

the goods should be free of any defect that wasnt apparent from the sample that renders the

goods unmerchantable (Sale of goods Act 1895 (SA), Part 1, Division 6, sec 15). Through a

high quality provided sample, it was implied by the seller that a majority of the 200 towels

purchased would be of the same or similar quality of the sample first provided (Sale of goods

Act 1895 (SA), P 1, Div 6, sec 15).

As I have rights under the legislation and because the seller didnt provide the quality of

goods implied by the sample there is a breach of warranty of quality and I am entitled to

several remedies. I can request a reduction in the product cost, replacement of the lesser

quality goods or a complete return and refund if there no towels to replace the 175 that do not

meet the quality requirements.

This is seen in the case of Royston Dmello and Oreen Dmello and Carpet Call (WA) PTY

LTD [2007] WABDT 85, false representation was made through a sample and it was stated

that as there was not a way Carpet Call could rectify the issue, the contract between the two

parties would be terminated and Carpet Call would have to return the full deposit paid less a

small amount of work done that was of value. I am entitled to take legal action against the

Soccer Super Store as well as pursing the previously listed remedies however as I am not

planning on selling these products and instead handing them out, it will be difficult to argue

what loss or damage there will be to the business (Sale of goods Act 1895 (SA), P 5, Div 2,

sec 52).

Conclusion

As the towels are considered a good under the Sale of goods Act 1895 (SA), I have the right

to receive at the least the majority of 200 towels at the same quality as the sample provided.

Under the Act I am also entitled to having the 175 towels replaced by towels of the quality

promised or a full refund if this isnt complied with.

Question 2.1: Leasing and Property

Issue

Is it possible to refuse permission?

Rule

Retail and Commercial Leases Act 1995 (SA) Part 1, Section 5 This Act overrides

leases
Retail and Commercial Leases Act 1995 (SA) Part 1, Section 6 When the lease is

entered into
 Retail and Commercial Leases Act 1995 (SA) - Part 6, Section 37 Lessee to be given

notice of alterations and refurbishment

Retail and Commercial Leases Act 1995 (SA) Part 6, Section 38 Lessee to be

compensated for disturbance

Application

The agreement is a lease which is covered by the Retail and Commercial Leases Act 1995

(SA) as a lease is entered into with both parties having executed the lease (Retail and

Commercial Leases Act 1995 (SA), P 1, Sec 6). Firstly, this Act overrides the leases and the

lease is considered void if its inconsistence with the Act (Retail and Commercial Leases Act

1995 (SA), P 1, Sec 5). The lessee is to be given notice of Alterations and refurbishment, I

can refuse access as this will adversely affect my business. According to the Retail and

Commercial Leases Act 1995 (SA), the only other way that the lessor may make me give him

access is if the alterations was in writing a month before and the alterations are an emergency,

as neither are the case I can refuse him access (Retail and Commercial Leases Act 1995

(SA) ,P 6, Sec 37). As the lessor is trying to prevent access to the property the lessee is to be

compensated for disturbance, as the two weeks without access to the area has an adverse

effect on the shop and effects the flow of customers in the sports bar (Retail and Commercial

Leases Act 1995 (SA), P 6, Sec 38).

Conclusion

I have authority to prevent the lessor access to the property for the lessor to put in a fake

soccer pitch according to the Retail and Commercial Leases Act 1995 (SA). If the lessor does

put the football pitch in and denies access then I am within my rights to sue for damages

equal to the lost amount of income from the disturbance as it prevented me from performing

my business.
Question 2.2: Fixtures

Issue

Are the ceiling fans fixtures?

Rule

Retail and Commercial Leases Act 1995 (SA) Part 3, Section 13 - Certain obligations

to be void
Retail and Commercial Leases Act 1995 (SA) Part 3, Section 12 - Lessee to be given

disclosure statement

Application

The legal term fixtures refers to something that has been attached to land in such a way so

that, in law, it has permanently become a part of the land. In determining whether or not

something is a fixture the courts examine: the intention of the person who attached the item to

the land; the ease or difficulty with which the item can be removed from the land; and,

whether substantial damage will caused by the items removal (James, 2014, pp 525 - 526).

To identify if the ceiling fans are fixtures, the above checklist was used. The lease states that I

must install at my expense, new ceiling fans in the outdoor undercover area to improve air

flow. When a landlord includes a term like this I am only required to fit or refit the property,

or provide fixtures, if the disclosure statement discloses the obligation and contains sufficient

details to enable the tenant to obtain an estimate of the cost of complying with the obligation

(Retail and Commercial Leases Act 1995 (SA) s.13(1)).

There is no mention of a disclosure statement and so I may not have to comply with this term

of the lease and the Retail and Commercial Leases Act 1995 (SA) will overrule the
discrepancy in the lease in the absence of a disclosure statement and may require repayment

of any cost associated with the fitting of the fans (Retail and Commercial Leases Act 1995

(SA) s.12(5)).

Assuming I do install the ceiling fans and conclude that the fans are fixtures not fittings as

stated in the case Re May Bros Ltd (1929) SASR 508 it is outlined that any machine fixed by

bolts, screws or other fasteners are prima facie a fixture.

I could argue that ceiling fans are not major additions to the property. They can be easily

installed and removed when the property is going to be used for a different purpose, so

therefore they are not fixtures that are intended to permanently improve the property and are

instead tenants fixtures. The lease states the ceiling fans are to improve air flow and the

property in my case needs good airflow because it is a sports bar that commonly has patrons

using the outdoor area. In Re May Bros Ltd (1929) SASR 508 it is stated that a trade fixture is

something that is used in order to assist or support someone in the conduct of their trade and

therefore, the ceiling fan can be removed by me at the end of the lease. In future the area may

be used for something completely different with few people using the outdoor area and the

ceiling fans would not necessarily be always needed, and so I could argue that I agreed to the

lease clause and installed the fans because they benefited my use of the property as a sports

bar the ceiling fans were attached to the outdoor area not to permanently improve the

property but were for my enjoyment or use of the property as a sports bar (Spyer v Phillipson

[1931] 2 Ch 183).

Conclusion
Thus, by using the checklist and relevant case law it shows that the ceiling fans are tenants

fixtures. The purpose of putting in the ceiling fans was to provide a comfortable environment

outdoors for patrons of the sports bar and this also reinforces that they are tenant fixtures

which means I can remove them at the end of the lease. If there is a significant disagreement

with the lessor about the fixture, due to the lack of a disclosure statement repayment for the

fitting would be within my rights under the Retail and Commercial Leases Act 1995 (SA).

Issue

Are there any consequences based on the above determination if the fans are removed at the

vacation of the premises?

Rule

Retail and Commercial Leases Act 1995 (SA) Part 3, section 13 - Certain obligations

to be void
Retail and Commercial Leases Act 1995 (SA) Part 3, Section 12 - Lessee to be given

disclosure statement

Application

Based on my conclusion above that the fans are tenants fixtures and I can remove them at the

end of the lease. This was also shown in Re May Bros Ltd (1929) SASR 508. I can also argue

that the clause about the ceiling fans is invalid due to section 12 and 13 of the Retail and

Commercial Leases Act 1995 (SA).

A tenant may be required to fit or refit the shop if a disclosure statement discloses the

obligation and contains sufficient details to an estimate of the cost of complying with the
obligation which has not been done in this circumstance (Retail and Commercial Leases Act

1995 (SA) s.13(1); Retail and Commercial Leases Act 1995 (SA) s.12(5)).

There is expected to be little damage however if the removal of the ceiling fans causes

damage to the property there may be consequences as the lessor may want me to pay for it to

be fixed. The lessor may want to arrange with me to reimburse the capital expenditure that I

spent installing and buying the fans to keep them with the property.

Conclusion

I am in a strong position due to a lack of a disclosure statement and there are minimal

consequences if I was to take the fans with me when I leave due to them being a tenant

fixture in the sports bar. I may be paid to instead leave them there and the only consequences

would be the capital I may have to pay to the lessor if I damage the property when removing

the fans.

Reference List

Age of Majority (Reduction) Act 1971 (SA)

Balfour and Balfour [1919] 2 KB 571

Bettini v Gye (1876) 1 QBD 183

James, N. 2014, Business law, 3rd edn, John Wiley & Sons Australia, Milton, Qld.

Minors Contracts (Miscellaneous Provisions) Act 1978 (SA)

Royston Dmello and Oreen Dmello and Carpet Call (WA) PTY LTD [2007] WABDT 85

Retail and Commercial Leases Act 1995 (SA)

Sale of goods act 1895 (SA)

Spyer v Phillipson [1931] 2 Ch 183