Contract Law Uncertain Legacy Council

Question: Describe about the Contract Law for Uncertain Legacy Council. Answer: Critically evaluate, using case-law, on what different grounds (if any) Helen might argue that the contract of employment between her and Ray is unenforceable? Considering the situation in this scenario where Helen has been offered the contract by Ray in which there are two main clauses, one states that Helen must provide three month notice to the firm in case of leaving the firm and the next one states that if she gets terminated from the firm, she would not be eligible to apply in any law firm for the next five years. Helen considers the contact not too valuable because she trusts Ray being her niece and just signed it. However, when she got job in Haddocks Partners, she just gave one weeks notice to Ray and left. Now Helen is of the view that the contract of employment is unenforceable. There could be some of the reasons on which she is arguing over this and one of it could be the reason that she believes Ray has a family relation with her so there would be no restriction on her to leave and join the firm at any time. According to the Corporations Act 2001, relationships will be considered under three scenarios which are as follow: (a) Relationships between de facto partners (within the meaning of the Acts Interpretation Act 1901); (Corporations Act 2001, 2001) (b) Relationships of child and parent that arise: (i) if someone is an exnuptial or adoptive child of a person; or (ii) if someone is the child of a person because of the definition of child in this Act; (Corporations Act 2001, 2001) (c) Relationships traced through relationships referred to in paragraphs (a) and (b). (Corporations Act 2001, 2001) However, none of these clauses are being met in this scenario! This is the only reason on which she can argue over the contract of employment. Otherwise, she is bound to give notice of three months as mentioned in the contract and Ray has the authority to claim it within the court. If the contract of employment is enforceable, identify the most likely breaches of contract by Helen and identify and describe what the different remedies are that Ray maybe legally entitled to. As already discussed, that there is only one argument which Helen can proceed with but that is not going to stand for long as she has agreed over the contract terms which says as follow: Clause 1.6 In the event of resignation by the employee, the employee is to give three months of notice to the employer. Clause 1.7 The employee upon termination of employment cannot work for any other law firm providing law advice or services within Australia for five years. In this case, Ray is entitled to take legal action against Helens act for not following the terms and clauses of the contract she signed at the time of joining. Helen has breached one of the clauses of the contract which states clearly that she needs to give a notice of leaving at least three months before which she didnt and hence, Ray is entitled to claim it in legal terms. As far as their relation is concerned, Ray might not take such actions but he certainly has the authority to take such action whatsoever! Part B What is the best option for the company, insolvency or voluntary administration and why? In the present scenario where Video Pioneer is under so much debt and they have agreed with the bank too for paying the amount upfront at the end of the financial year, there is a lot of pressure on Jill and Christine as there are only two years left for their lease contract to end. There are two situations and conditions for both directors of VP, one is the insolvency and the other one is the voluntary administration. In such a condition where VP is facing a lot of issues in making profits and they are not in a position to give salaries as well, it is always a better option to take stand themselves and do voluntary administration without getting anything from Video Pioneer. One of the mistakes which Christine did was the car she took from the company without paying them anything which has a cost of about 12, 463$. If VP cannot pay the interest on the term loan of $60,000 what rights does Westpac bank Ltd have to recover the principal and the outstanding interest? In case if the company could not give the interest on the amount of 60,000$ to Westpac Bank, then they are liable to claim legally in the court. In that case, VP might have to pay a lot more than the interest rate because they might have to pay even double the amount which is already pending with them as they have agreed with the bank to pay off all the remaining interest amount (Andrews 2015). VP might face serious issues with that because it might leads them to sell the business totally in order to pay the debts. What is the impact of the personal guarantee on Jill? An individual certification permits an organization to obtain cash without extra encumbrances on its business or resources. In the event that the organization keeps up its installments, there is no requirement for the bank to uphold an individual assurance. Most banks and trustworthy monetary establishments will demand that the executive and additionally shareholder giving the individual certification gets autonomous lawful guidance in regard of the ramifications of giving such an assurance. This will guarantee that the signatory to an individual certification comprehends the terms and outcomes of giving the assurance (Hunter 2015). Assuming the company is placed in liquidation on 31 May 2015, what is the impact of transactions 4 and 5 above? In case of liquidation of the company on May 31, 2015, the car which Christine took could have been sold already or have been distributed amongst the members of the company. Moreover, as far as the transaction 5 is concerned, it could not have been returned or cleared because it is before the liquidation period so there is no duty of care on VP. We can get a similar example from one of the case studies, Esanda finance corporation ltd V Peat Marwick, in which Esanda files a case for breach over Peat Marwick while auditing the company to whom Esanda has given loan (Barker 2015). Peat Marwick won the case because there was no duty of care on them once the audit is done. It could have been a better option if VP goes for the liquidation a bit earlier than going under such a pressure of debts and could have easily resolved the issues. References Andrews, N., 2015.Contract law. Cambridge University Press. Barker, K., 2015. Negligent Misstatement in Australia-Resolving the Uncertain Legacy of Esanda. Ch, 13, pp.319-344. Corporations Act 2001. (2001). 1st ed. Canberra: Office of Parliamentary Counsel, p.117. Hunter, H., 2015. Modern Law of Contracts.