Question 1
Issues
The issues are what would be the legal positions for the different activities that Siddo engaged in. This is in relation to the relationship that exists between Siddo and Vera. The nature of the relationship is also necessary to establish as to what is its nature. The side effects of the actions taken by Siddo also need to be analyzed.
Rule
The relationship that is established between Siddo and Vera is that of agency. There are various duties which are pegged upon the agent and the principal. However, in this circumstance the facts are largely limited to the duty of the agent towards the principle. Australian jurisdictions have a more extensive idea of an ‘agent’, being a man with an expert or ability to make or influence lawful relations between a principal and outsiders. The common law administers the development, operation and end of the organization relationship and in addition the rights and obligations of the agent, the principal and the outsider (Dal pont 2013).
The term agent encompasses a person who is appointed to engage in commercial activities such as selling and buying of goods or to engage in other activities on behalf of a principal (Hynes 1997). A principal on the other hand is defined under the common law as an individual who gives upon an agent the specialist to follow up for the individual’s sake with the end goal of making or influencing legitimate rights and obligations between the individual and outsiders.
Under any relationship, an agent is bound by duties which include the duties to follow the principal’s directions (Dal pont 2013). An agent is not supposed to act via their own volition or without being informed of what they are supposed to do. They supposed to do exactly what their agreement stipulated acting contrary would be in breach of this obligation. An agent thus, cannot act outside the scope of being appointed as such an agent.
An agent is also supposed to act in person and should not subcontract the work that is imposed on him or her. He or she is thus not to give other people the authority to act as the contract is only between him and the principal. Necessarily, is the fact that actions of an agent directly affect the principal (Clark 1983). An agent therefore has to act in person as authorizing third parties would make him or her liable as he would be the new principal. The relationship is usually purely personal unless there is an authorization to appoint a sub-agent (John McCann & Co -v- Pow 1974).
The other duty is to act with due diligence and care. An agent should undoubtedly practice his obligation with care and steadiness and should apply such expertise as he has (Majone 2001). A business agent for instance should get the best cost sensibly possible. On the off chance that he has acquired a superior offer, which has been restrictively acknowledged, he has a further obligation to impart this to his principal (Keppel -v- Wheeler 1927). What’s more, he should uncover to him any data, which he has which may impact the principal in making the agreement. In Heath – v-Parkinson (1926) the agent was held not liable for payment of his commission for failing to exercise this duty.
The other duty is to act in good faith of which the agent is supposed to be honest to the principal by for example revealing all necessary information to them (Kahn-Freund 1972). The agent is thus not to make secret profits or engage in activities that are likely to be in breach of this obligation and close to this is the duty to account to the principal any monies made in relation to the duty imposed on them Shallcross -v- Oldham (1862). The other duty is to ensure confidentiality by not revealing details of agency to third parties unless it is extremely necessary to do so (L.S. Harris Trustees Ltd -v- Power Packing Services (Hermit Road) Ltd 1970). Close to this is to ensure that personal interests are not in conflict with the duties to the principal (Amstrong v. Jackson 1917). The Agent is also to ensure that they keep separate accounts of what they receive to ensure that they do not conflict in terms of being accountable in what is their personal monies made and those of their principal.
Remedies for breach of obligations of the obligations
Damages for breach of covenant- the principal can institute legal proceedings against the agent for breach of contract and claim damages there from.
A claim for damages in tort which may be done in case the agent colludes with third parties in order to take the principal’s property. Additionally, liability may be for detinue.
Others may be suit to claim the secret profits made. Additionally, Application for a request for account is likewise accessible where the agent neglects to keep legitimate account (Andrews -v- Ramsay & C0 1903).
Application
The first obligation discussed here above is to ensure that they follow instructions. Failure to follow instructions may make them liable. As per the first scenario, Siddo sold the painting for 20000 dollars which is less than the minimum 0f 32000 dollars of which he was asked to sell. In this case, it means that he is in breach of these obligations. Siddo may be liable for damages for selling the painting below the instructed price. The principal in this case may institute suit to claim damages against her agent for breaching the obligations imposed when the contract was entered into.
The second scenario of selling the property to him is also a breach as it was followed by reselling the painting at a higher price hence making a profit. In this scenario he has breached two obligations which are placing himself in a position where his interest conflict with those of the principal. He has also got himself a secret profit. The principal in this case may sue him and claim damages for not acting in good faith and also require him to refund the profits made which are contrary to the relationship the two have.
Siddo selling the painting to Isobel is per the agreement that he had with the principal. However, he is getting paid for the sales which are secret commissions. He has to reveal this to the principal otherwise he will be committing the breach of making secret commissions or profits. Failure to reveal will make him liable.
Conclusion
In the three situations, all are set for that according to the discourse above there will be a break of obligation. There is outright break in an) and b). There is additionally the likelihood of break in c). Three obligations emerge in the situations which are: there is an obligation to uncover mystery benefits, there is an obligation to take after directions and to act in compliance with common decency. These have all been possibly breached. The last scenario there is potential breach if revelation of the failure to reveal the secret commissions and or profits.
Question 2
The issue is to determine the legal position, legal rights and obligations of each party in this scenario. The issue of minor contracting is also another issue.
Law
The inquiry is simply pegged on financial advise and the law identifying with it in Australia. The above situation depends on credit contracts and the law identifying with money related rules. According to part 6 of the NCCPA 2009, the law characterizes credit contract locks in individual as a man who plays out the duties, or exercises the rights, of a credit provider in association with a credit contract or proposed credit contract (paying little heed to regardless of whether the individual does in that capacity as the credit provider or for the advantage of the credit provider).
The Corporations Act 2001 has provisions which cover on financial advice offered on people. It regulates that only people with ability and licensed to offer advice can provide it. Being given financial advice by persons or entities which are not registered is illegal and a person upon discovery can rescind a contract. This is as per sections 925A to 925D and 925H of the Corporations Act. Any information that is given regarding finances which is meant or is known by a party to be false is taken to be misleading. This is provided for under section 769C.
Financial advice which is made reckless may be related to giving information negligently and may lead to liability (Hedley Byrne v Heller and partners 1964). This assertion is supported by the ASIC Act (2011). This is under section 12D of the said legislation. Section 12CA of the ASIC indicating is unmitigated in giving that a man ought not take an enthusiasm for offering cash related interest which is unconscionable. Neglect to give full data that is comprehendible by the social events can be held to be a break and in this way, this can discharge parties from their truly confining obligation (Commerical Bank v Amadio 1983).
There are three conditions that must be met for an incite be unconscionable as shown by the purpose of reference based law. These are: the weaker party is under surprising hinder, the more grounded one ponders this shortcoming and it is out of line for the more grounded one the way in which they gained the statement. Unconscionable direct is besides hindered on associations scanned for private, individual or house hold utilize. The uncommonly based law proposes the haggling imperativeness of the parties, paying nearly nothing regard to whether a social event got a handle on substance of records or potentially weight associated on a social event.
Acting in the negative interests of the clients is what is prohibited by the law and this may be done deliberately or in-deliberately (FoFA 2012). Agreements made which may ultimately have this side effect are taken to be unconscionable. Division 2 of the ASIC display confines unconscionable direct with respect to offering budgetary associations. As shown by parcel 12DE it is an offense to give budgetary associations or offer a person giving such associations to an arrival of a blessing or prize to some other person. The courses of action of the criminal code are to be appropriated against any part who irritates this strategy.
Contracts by a minor
For an agreement to exist the gatherings must have legally binding limit. There are sure persons and classes of persons that do not have the ability to go into an agreement with the outcome (ordinarily) that subsequent contracts won’t be enforceable against them. Absence of limit now regularly stems shape a dread of defenselessness to abuse. This region has turned out to be more mind boggling because of statutory improvements at a state level (calls for national law change have not yet met with progress) which result in a wide range of guidelines.
Both the precedent-based law and statute work to confine the limit of minors to contract. The current blend of customary law and various distinctive state administrative principles in connection to the limit of minors has rendered the evaluation of the authoritative limit of minors exceedingly intricate.
Common law
The general control at precedent-based law is that an agreement made by a minor (a person less than 18 years old) is voidable. There are, nonetheless, various special cases (some of which now have statutory power).
Contracts for necessities
An agreement by a minor for necessities is official on the two gatherings. Necessities are dictated by reference to the minor’s ‘current way of life’ and must be important for keeping up that way of life (Nash v Inman 1908). Valuable contracts of business An agreement by a minor for work is restricting given gainful (not unjustifiable or harsh). A minor can renounce such an agreement upon attaining the age of adulthood.
The impact of minority at common law
Contracts not falling inside both of the above special cases are voidable. Be that as it may (clearly for causing disarray) the Courts treat “voidable” in this setting uniquely in contrast to voidable as ordinarily comprehended in contract. Where the agreement brings about the minor for all time gaining property (eg arrive) or includes continuous commitments (eg organizations) at that point the agreement is restricting unless and until dodged by the minor – the minor stays bound by any commitments that emerging before that point. Every single other contract went into a minor are not restricting unless approved (finding a way to avow) by a minor when they turn into a grown-up. Part of the Act 8 characterizes a minor as a person under 18 years old. When in doubt a minor is not bound by an agreement aside from as gave by the Act (s 17). Helpful acts are possibly official (s 19). Minors may likewise attest acts while accomplishing the period of limit (s 30). A Court may likewise confirm authoritative limit on a minor (s 26) (Minors (Property and Contracts) Act 1970 (NSW).
Application
For Karl and Maria, one of them is educated and the other is uneducated. Parties can only be bound if they were given full information regarding the nature of the contract, a chance to bargain as to whether to enter into the contract or not to. they had no bargaining power and hence are weaker parties to the transactions that are taking place in the above scenario. Under the provisions of the ASIC Act as noted above under division 2, this is unconscionable character that Joan and Frank were engaging in. Joan lied to her parents and Frank realized it but did not reveal it to them. this would mean that the rights of Karl and Maria of not being misled, and not to be given impressions that were false were breached in this scenario. The two are in a position to rescind the contract that they entered into. The one which they were lied to in order to provide guarantee and hence their liability can only to be to the extent of which they knew of 25000 dollars. These two may thus claim unconscionably of which was done deliberately as per the scenario.
Frank and Frank PTY have a right under the law to be compensated for the breach that Joan has been engaged. However, Frank knew very well of the lie that Joan had on her parents and hence the contract is unconscionable. Frank was party to the fraud perpetrated against Joan’s parents. The fraud was to his benefit. He has no right to claim from Joan’s parents save to the 25000 dollars of which they knew of. The rest of the amount he has the right only to recover from Joan.
For Joan, has no legal right as regards the set of facts for the reason that she misguided her parents. She also lied on bank loan of which did no exist. She has also colluded to defraud her parents of which she had led them to sign an unconscionable contract. She is thus liable for the balance of which they did not know of. Frank should thus recover this money from her. However it is noteworthy that the NSW law provides that all contracts with minors are void. This would mean thus the contract that has been entered into between Frank and Joan is voidable at the option of either party. This for the reason that section 8 categorizes Joan as a minor. Section 19 may lead the court to pronounce that she is bound for that her actions were beneficial to her and this right is to accrue to frank. However, he must move to court to have this determined.
Bibliography
- Books
Kahn-Freund, O., 1972. Labour and the Law (Vol. 24). Stevens [for] the Hamlyn Trust.
- Journal
- Legislation
Corporations Act cth sect. 763B
Life Insurance Act cth 1995
ASIC Act 2011 cth, section 12 ED
Future of Financial Advice Act (FoFA) (cth) no. 67 of 2012
National Consumer Credit Protection Act 2009
Minors (Property and Contracts) Act 1970 (NSW).
d)Cases
McCann (John) & Co. v. Pow (C.A.). [1975] 1 All E.R. 129.
keppel v wheeler 1927 1 kb 577
Heath v Parkinson (1926) 42 TLR 693
Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964) AC 465 (HL)
Commercial Bank of Australia v Amadio (1983)151CLR447
Shallcross v Oldham (1862) 2 J & H 609, 70 ER 1202).
- S. HARRIS TRUSTEES LTD. (TRADING AS L. S. HARRIS & CO.) v. POWER PACKING SERVICES (HERMIT ROAD) LTD. [1970] 2 Lloyd’s Rep. 65. QUEEN’S
Armstrong v Jackson [1917] 2 KB 822
Andrews -v- Ramsay & C0 1903) [1903] 2 KB 635
Nash v Inman 1908 2 KB 1
