Contract Law Assignment: Case Analysis of Rhino Distillery
Task: Your task is to consider a case of Rhino Distillery, a famous whisky distillery placed advertisement claiming prize money of $75,000 for reeling in Misterjaw, a giant Barramundi and prepare a contract law assignment.
As stated in this contract law assignment, business and corporate laws are essential to managing any kind of issues in business organizations. Contract law of Australia encompasses any law directed towards enforcing certain promises. The law helps to resolve conflicts due to any false promise or contract. A good business structure is also important to make the performance of the business organization better. Rhino Distillery, a famous whisky distillery placed advertisement claiming prize money of $75,000 for reeling in Misterjaw, a giant Barramundi. There was an error in the prize money but two anglers called Georgie Lang and Tyler Henry are claiming prizes for catching Misterjaw. How Rhino Distillery should deal with the matter will be described here based on the contract law of Australia. The article will also discuss the preferred business structure for promoting the tour for the new album of the music promoter. The dangers and risk factors of the business structure will also be described here.
1. Company liable to pay
Georgie Lang who is known as 'Gorka' to his friends had caught Misterjaw on the next day of the advertisement that Rhino Distillery placed on a magazine. Gorka was not aware of the rumour at the point when he had caught Misterjaw. He caught the giant Barramundi when on the very next day of the advertisement. He heard the rumour just after a few minutes of catching Misterjaw. The representative of Rhino Distillery was present at the moment to certify the catch of Gorka but did not inform anything about the actual prize money (Sobel-Read, Anderson and Salminen, 2018). The rumour was that the prize money for catching Misterjaw is $7500 instead of $75,000 and unfortunately the rumour was true.
Gorka is now claiming the prize money worth $75000 for catching the Giant Barramundi. His claim is legal and Rhino Distillery should give him the claimed prize money. Theindependent contractor act of 2006 also focuses on the term of the contract. It is stated in the contract law of Australia that “If one of the parties does not do what one or more of the terms of a contract say they must do; it can lead to what is called a breach of contract. In that case the other party can take them to court and ask for damages to be paid to them, because they have not honoured the terms of the contract”. In this case the damages can only ordered by the Australian Court (McKeown,2016). This contractor act requires establishment of the legal liabilities, obligations, and rights that give rise in the employment contract between businesses and independent contractors.
Rhino Distillery cannot neglect the claim of Gorka and is bound to give him the prize money of $75,000. As the error was not corrected by the company, it has to pay the prize money to Gorka and the prize money would be the price which was printed in the magazine. Giving advertisements in a magazine is making a promising public (Botero, 2020). When any promise is done publicly and there is evidence available, the claim cannot be neglected. Moreover, not taking any action against the wrong advertisement indicates the carelessness of the company (LASABALLETT, 2017). The company should make changes in the advertisement before. Now, when Gorka has caught Misterjaw, Rhino distillery should pay the prize money worth $75000 to Gorka.
The representative of the company had not informed Gorka about the prize money even after witnessing that Gorka had caught the company must appoint representatives to make every angler aware that the prize money printed in the advertisement is wrong and the real prize money is $7500. When the action was not taken by the company, they could not avoid the claim of Gorka. If Gorka is claiming the prize worth $75000, the company must pay it to him.
If the error is from the authority of the magazine, the company must contact the concerned authority. The magazine will be bound to pay the prize money worth $75000 to Gorka if the fault is theirs. If it can be proved that the fault is of the authority of the magazine, Rhino whisky Distillery will be saved from giving the prize money to Gorka. On the other hand, if the fault is from the side of the distillery company, there is no choice for the company to neglect the claim of Gorka who had caught Misterjaw just the day after the advertisement. The company might pay a fine if Gorka takes any legal action for not responding to his claim.
2. Liable to pay Hunk
Hank has also claimed a price worth $75000 from Rhino Distillery for catching the barramundi. Hank had caught Misterjaw on the eve of Christmas. Therefore, it is clear that Hank has made the work done almost after one year of the advertisement (Botero, 2020). Though he had not heard the rumor before catching the giant barramundi, he does not deserve the prize worth $75000. The main reason behind the fact is that he had not to make contacts with the company for a longer period and the validity of the prize might get expired.
The case of Hank is not as simple as Gorka for a number of reasons. It can be understood that the announcer company had certain faults from their end as they did not clarify the process amount and duration of the event (McCormick et al., 2019). However, Hank caught the fish after a long period. He caught the fish just before the time of Christmas. The advertisement was published at the start of the year.
The company can claim that the catch of Hank is not valid as it was done after a long time of the advertisement. Hank did not hear the rumors of the wrong prize money in the overall period. The company can claim that it was a mistake from his end as he did not clarify the validity of the offer. However, Hank can also claim that it was the responsibility of Distillery to make the participants aware of the dates and amount of the contest. It would be best for the company to go to negotiation with Hank. The company can provide Hank with the original prize money that they intended to give the angler who caught the fish. In that case, Hank would get $7,500 from the company. It is not sure that Hank would react to this proposal. But if he does not respond positively to the offer that is made by the company, then the company is bound to get into a legal contest with him (Konings and Hettinga, 2018). The frustrated contract act 1978 of Australia suggests that if the contract is not legal, no one claim for any issue regarding the contract. Rhino Distillery can claim that they have not made any legal contact with Hank and they are not bound to give him the prize after so many days of the advertisement. A. v. HAYDEN(1984) 156 CLR 53 case of Australia clarified the fact that no people can claim a subjective issue to a person, if the employment contract is termed as illegal (Beazley, 2018). There are good chances of getting the decision of the judge in favour of the company as the date of the catch is a long time after the date of the advertisement. However, the company should try their best to negotiate with Hank.
1. Options of business structure
The famous brand is being brought from England to Australia. Various parties are involved in this event for their particular profits (Carrà et al., 2016). The music promoter has some contacts in a national radio station. It can be a great help in terms of the promotion of the musical concert. The advertisement for the event in the national radio station can attract huge buyers of the tickets for the event. It can also attract some extra sponsors for the event. The financier can also be very profitable by sponsoring the music tour. If the marketing of the event can be conducted properly, the show can earn a huge number of viewers. The amount of revenue would be greater than most of the other events that the promoter has conducted. The scope for the promoter itself is very high from this event. If he can manage the entire tour smoothly, his reputation would be increased by a huge margin. The overall management of the event and the contracts of the entities that would be involved in this process would be done according t the norms of the Corporations Act, 2001.
Apart from that, many large financiers would try to contact him for further events. The overall career of the promoter would be restructured by the success of this particular event. Some advertisers can use the event to promote their brands to the audiences. They can find this event interesting as it would feature a very popular music band. The meeting that would be organized by the promoter would be attained by various parties (McGinnity et al., 2018). The parties involved in the process should be covered under the ABN application. The tax file number (TFN) of all the associates must be registered with ABR. Australian Business Number Act, 1999 is effective in this section (Hansell& Rafi, 2018). The entities that would be a part of the meeting can have different requirements from the event. If all the parties can fulfil their personal interests, then the event can be better in an overall manner.This aspect needs to cover under the Australian Securities and Investments Commission Act, 2001. The ASIC norms would be applicable for he governance of the issues in this matter.
2. Dangers of business structure
? Partnership: Partnership is a formal arrangement that operates a business with two or more parties and the profits are shared between two candidates. There can be different types of partnership arrangements, such as a specific partnership business in which they share their liability and profits equally and, in this case,, they enjoy equal liability, but in business, the partnership can create a variety of problems, such as partnership can lead to different management styles which can create problems in the future (Ivanova et al., 2019). Personal habits can also grow in the case of a partnership. It creates a kind of boundary for their level of commitment.
? Sole Proprietorship: Sole proprietorship is a type of business where one is the owner and the other runs the whole company. This reflects a limited liability partnership. There are no partners in this business, but there is some legal status that never considered a separate legal entity as a business owner. It can also create a variety of problems in business (Nikolova, Rodionov and Afanasyeva, 2017). Sole proprietors provide a limited amount of capital and the amount of money they borrow to make this business stand out has to be paid in all its from their savings, and in the case of such a business, The Limited managerial ability can be noticed that one can never be an expert in this business. In this case of this research, the person will travel from England to Australia for the promotion of his song album and in that case, researchers think that this business may not be suitable in any way.
? Corporation and S Corporation: A corporation is a business structure that provides a separate legal entity. However, search businesses have to pay both Federal and state taxes when their shareholders disclose their payments. S corporation, on the other hand, is the advantage of corporate business structure, corporate business shares their losses and profits through a partnership with shareholders, S corporation gives them all kinds of advantage.
3. Limitations of risks
In this case study, the music promoter is calling for a meeting of different interested parties but he has not any surety regarding the business organisation, so there can be many risks by each party. Below all the risks will be described regarding each business structure-
- Risks in partnership business structure: The biggest risk in a partnership is their unlimited liability because in this case, the partners involved their liability to their creditors.
- Risks in Sole Proprietorship: In this case, the business owner becomes the only risk barrier. As a result, the owner of the business has to be here for all kinds of risks. For example, this business owner is most affected as he has to wear all kinds of problems and risks together (KOVALENKO, 2020). In this business structure, the owners have fully credited their liability, therefore, all taxes have to be paid from their Savings and one of the major drawbacks is that after death, there is no hope as a result and the business in here.
- Risks of corporation and S Corporation: Corporations exert a huge influence on the business structure which puts their general economy at risk. This causes the company various problems in terms of their taxes and regulations. These risk factors take a more deadly shape when this corporation structure operates its business with any other industry (Guliyeva, 2019). Similarly, S Corporation creates different types of risks in the case of restructuring a business. It brings a variety of qualification obligations to pay taxes. This binds the ownership of the company to a kind of stock restriction, and it is very close to IRS security.
The music event has several scopes and risks that are equally attached to this event. However, the risks and advantages that are present in this regard are essential for the associated parties in this regard. The financier of the event has the most quantity of risk involved in this case. All the resources that would be invested in this event would be at stake for the duration of the program. In case of any failures of the marketing system, the earning can be significantly lower. The promoter also has a certain amount of risk involved in this process. If the events fail, it would also impact the career of the promoter badly.
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