2105AFE – Introduction to Business Law
Table of Contents
Topic 1: Introduction to the Study of Business Law 2
Topic 2: The Australian Court System 7
Topic 3: Introduction to the Law of Contracts 13
Topic 4: Introduction to the Law of Contracts (cont.) 16
Topic 5: Contents of the Contract 19
Topic 6: Discharge or Termination of a Contract 22
Topic 7: Consumer Protection 25
Topic 8: Law of Negligence 30
Topic 9: Negligent Misstatement and Vicarious Liability 34
Topic 10: Law of Partnership 36
Topic 11: Relationship Between Partners: Dissolution of a Partnership 42
1
,2105AFE – Introduction to Business Law
Lecture 1: Introduction to the Study of Business Law
Law - enforceable set of rules that regulates/controls the behaviour of members of a society, controls
the conduct of individuals in a society
Effective Legal Characteristics:
Certainty
Flexibility (must be able to change with the societal differences)
Knowledge (conveyed to the public)
Reasonableness
Obedience
Separation of Powers
Functions of government are allocated to different institutions:
Laws are MADE by a Legislature
Both federal and state parliaments make laws
Laws are ADMINISTERED by an Executive
Prime Minister, Cabinet Ministers, Politicians
Laws are INTERPRETED by a Judiciary
Judges and the courts (AKA Judiciary)
Three Branches of Government
Exclusive Powers - gives the commonwealth exclusive or sole power to make laws in specific areas
E.g. Print money, regulate interstate and international trade, make treaties and conduct
foreign policy, declare war, provide an army and navy, establish post offices
Only held by the Australian Federal Parliament (highest governing body)
Concurrent Powers - permit both federal and state governments to pass laws in the same area
E.g. trade practices and consumer protection laws, insurance law, banking, industrial
relations, income tax, bankruptcy and insolvency, post and telecommunications, company law
Held by both federal and state levels of government
Residual Powers - any area that is not an exclusive or concurrent power
E.g. education, housing, land development, health and transport
Only the states may exercise residual powers
Sources of Law
Statute Law (laws made in federal, state and territory parliaments)
Can include delegated legislation where the original statute allows for more
regulations to be made by other persons or organisation
Recognizing a Statue
2
,2105AFE – Introduction to Business Law
Common Law (based on court decisions)
Decisions of superior courts in a particular case become the precedent for later cases
involving similar issues and circumstances
Recognizing a Case
1. Original court filling
2. The appeal if the defendant of the first case looses and is unhappy with the decision
(appellant v respondent)
3. If the respondent is unhappy with the second phase then the roles are switched
Statute law prevails over common law in case of conflict
Classifications of Law
Public and Private Law
Public Law - allows society to take action against others
Private Law - involves interactions between private citizens (e.g. divorce)
Criminal and Civil Law
Criminal Law - (sub division of Public Law) covers offences with which an individual
can be charged by the state, enforced by the state either through the police in magistrate
courts or the department of public prosecutions
Standard of proof is much higher in criminal law than in civil law
Civil Law - (sub division of Private Law) enforcement is undertaken by individual
person
3
, 2105AFE – Introduction to Business Law
Common Law System and Civil Law System
Common Law System (e.g. Australia, England)
There is not always a written constitution or codified laws
Judicial decisions are binding
Extensive freedom of contract - few provisions are implied into the contract
of law
Civil Law System (e.g. China, Japan)
There is a written constitution based on specific codes
Only legislative enactments are considered binding for all (there is little
scope for judge-made laws)
Less freedom of contract - many provisions are implied into a contract by law
and parties cannot contract out of certain provisions
Rules of Statutory Interpretation
Literal Rule
Whenever possible we should interpret an act literally
4
Table of Contents
Topic 1: Introduction to the Study of Business Law 2
Topic 2: The Australian Court System 7
Topic 3: Introduction to the Law of Contracts 13
Topic 4: Introduction to the Law of Contracts (cont.) 16
Topic 5: Contents of the Contract 19
Topic 6: Discharge or Termination of a Contract 22
Topic 7: Consumer Protection 25
Topic 8: Law of Negligence 30
Topic 9: Negligent Misstatement and Vicarious Liability 34
Topic 10: Law of Partnership 36
Topic 11: Relationship Between Partners: Dissolution of a Partnership 42
1
,2105AFE – Introduction to Business Law
Lecture 1: Introduction to the Study of Business Law
Law - enforceable set of rules that regulates/controls the behaviour of members of a society, controls
the conduct of individuals in a society
Effective Legal Characteristics:
Certainty
Flexibility (must be able to change with the societal differences)
Knowledge (conveyed to the public)
Reasonableness
Obedience
Separation of Powers
Functions of government are allocated to different institutions:
Laws are MADE by a Legislature
Both federal and state parliaments make laws
Laws are ADMINISTERED by an Executive
Prime Minister, Cabinet Ministers, Politicians
Laws are INTERPRETED by a Judiciary
Judges and the courts (AKA Judiciary)
Three Branches of Government
Exclusive Powers - gives the commonwealth exclusive or sole power to make laws in specific areas
E.g. Print money, regulate interstate and international trade, make treaties and conduct
foreign policy, declare war, provide an army and navy, establish post offices
Only held by the Australian Federal Parliament (highest governing body)
Concurrent Powers - permit both federal and state governments to pass laws in the same area
E.g. trade practices and consumer protection laws, insurance law, banking, industrial
relations, income tax, bankruptcy and insolvency, post and telecommunications, company law
Held by both federal and state levels of government
Residual Powers - any area that is not an exclusive or concurrent power
E.g. education, housing, land development, health and transport
Only the states may exercise residual powers
Sources of Law
Statute Law (laws made in federal, state and territory parliaments)
Can include delegated legislation where the original statute allows for more
regulations to be made by other persons or organisation
Recognizing a Statue
2
,2105AFE – Introduction to Business Law
Common Law (based on court decisions)
Decisions of superior courts in a particular case become the precedent for later cases
involving similar issues and circumstances
Recognizing a Case
1. Original court filling
2. The appeal if the defendant of the first case looses and is unhappy with the decision
(appellant v respondent)
3. If the respondent is unhappy with the second phase then the roles are switched
Statute law prevails over common law in case of conflict
Classifications of Law
Public and Private Law
Public Law - allows society to take action against others
Private Law - involves interactions between private citizens (e.g. divorce)
Criminal and Civil Law
Criminal Law - (sub division of Public Law) covers offences with which an individual
can be charged by the state, enforced by the state either through the police in magistrate
courts or the department of public prosecutions
Standard of proof is much higher in criminal law than in civil law
Civil Law - (sub division of Private Law) enforcement is undertaken by individual
person
3
, 2105AFE – Introduction to Business Law
Common Law System and Civil Law System
Common Law System (e.g. Australia, England)
There is not always a written constitution or codified laws
Judicial decisions are binding
Extensive freedom of contract - few provisions are implied into the contract
of law
Civil Law System (e.g. China, Japan)
There is a written constitution based on specific codes
Only legislative enactments are considered binding for all (there is little
scope for judge-made laws)
Less freedom of contract - many provisions are implied into a contract by law
and parties cannot contract out of certain provisions
Rules of Statutory Interpretation
Literal Rule
Whenever possible we should interpret an act literally
4
