Business Law Week 1: Introduction to Business and the Law

Course Overview and Learning Objectives

  • This course is LAW2442: Business Law at RMIT University.
  • Course Learning Outcomes (CLOs):
    • CLO1: Identify, interpret, and apply rules and issues relating to the law.
    • CLO2: Identify, interpret, and apply basic legal concepts in negligence, contract law, and the Australian Consumer Law.
    • CLO3: Analyse legal problems with an appreciation of the multiple issues impacting on business and non-business legal issues.
    • CLO4: Examine and apply legislation and case law relating to business.
    • CLO5: Communicate information and concepts relating to business and non-business legal issues to professionals and non-professionals in diverse contexts.
  • Weekly Schedule:
    • Week 1: Business and the Law
    • Week 2: Understanding the Australian Legal System - Finding and Using Law Online
    • Week 3: Deliberately or Carelessly Causing Harm
    • Week 4: Contracts - Formations and Terms
    • Week 5: Contract Law - Enforcement & Agency
    • Week 6: Consumers & Competitors
    • Week 7: Intellectual Property
    • Week 8: Non-corporate Business Structures
    • Week 9: Companies, Corporate Governance & Finance
    • Week 10: Payments, Debts, Insurance & Tax
    • Week 11: Employing Workers
    • Week 12: Managing a Business: Closing Down

Assessments

  • Assessment Task 1: Consultation with a Client
    • Submission Date: Due on 17 August at 23.59pm17\text{ August at 23.59pm}
    • Weighting: 10%10\%
    • Purpose: Assess comprehension and application of foundation law concepts from Topics 1, 2, and 3.
    • Description: A simulated timed challenge acting as a "BizRight" consultant. It is an open-book assessment involving a legal business problem presented by a client.
  • Assessment Task 2: Problem Solving Scenario - Memorandum of Advice and AI Critique & Improvement
    • Marks Allocated: 40 Marks40\text{ Marks}
    • Submission Date: Due on 14 September at 23.59pm14\text{ September at 23.59pm}
    • Learning Outcomes: CLO1, CLO2, CLO3, CLO4.
    • Description: Includes drafting a Memorandum of Advice and using Generative AI to generate, critique, and improve a draft contract based on an email exchange and brief of evidence.
  • Assessment Task 3: Invigilated Final Exam
    • Value: 50 Marks50\text{ Marks}
    • Timing: 2 hours plus 15 minutes15\text{ minutes} of reading time during the exam period.
    • Focus: Identify legal problems across broad contexts, applying rules to facts for legally correct conclusions.

Textbooks and Materials

  • Prescribed Text: Business Law by Nikolas James (6th6\text{th} or 7th7\text{th} edition).
  • Secondary Text: Concise Australian Commercial Law by Turner, Trone, and Gamble (7th7\text{th} or 8th8\text{th} edition).
  • Weekly Canvas module materials.

Introduction to Legal Studies (Topic 1A)

  • The Necessity of Law:
    • Resolves disputes and maintains social order.
    • Preserves and enforces community values.
    • Protects the disadvantaged and stabilizes the economy.
    • Prevents the misuse of power.
  • Classifying Law:
    • Private Law (Between individuals): Includes Contract law, Tort law, Family law, Property law, and Succession law (wills).
    • Public Law (Between individual and state): Includes Criminal law, Constitutional law, Tax law, and Employment law.
  • Criminal Law vs. Civil Law:
    • Criminal Law: Concerns wrongs against society. Prosecuted by the state to punish the offender. Standard of proof is "beyond reasonable doubt." Examples: murder, treason, theft, littering.
    • Civil Law: Concerns wrongs between private individuals where the state provides a dispute resolution forum. Taken to court by a plaintiff to compensate the innocent party. Standard of proof is "balance of probabilities." Examples: breach of contract, negligence, trespass.
  • Reasons for Legal Change: Political change, the need to fix legal problems, changing community values, pressure from lobby groups, and shifting technology.
  • Defining Business Law: A set of rules made by the state (courts or parliaments) enforceable in courts relating to business activities.
  • Law and Politics: Law is shaped by power and politics. Legislation is created by politicians to implement government policies.
  • Enforcement Entities:
    • Police and OPP: Investigate and trial crimes for the State.
    • ASIC: Investigates breaches of the Corporations Act.
    • ACCC: Investigates breaches of the Competition and Consumer Act 2010.
    • Private Individuals: Enforce rights via civil action (lawsuit, trial, verdict, appeal).
    • Civil Remedies: Damages (compensation), Injunctions (stopping an action), or Restitution.

Types of Legal Systems

  • Civil Law (Roman Law): The most common system. Primary source is legislation (codes/statutes/constitutions). Case law is generally not a recognized source. Used in France, Germany, China, Japan.
  • Common Law: Based on the British system. Follows the Doctrine of Precedent. Sources include legislation (Parliament) and common law (made by courts). Used in UK, Australia, Canada, New Zealand.
  • Common Law vs. Statutory Law:
    • Common Law: Judge-made legal principles (e.g., Donoghue v Stevenson [1932] AC 562).
    • Statutory Law: Laws from Parliament (Acts/Statutes, e.g., Corporations Act (Cth) 2001).
  • Common Law and Equity:
    • Historical background: Common law was often too strict after the 1066 Norman invasion. Appeals to the monarch led to the creation of courts of equity (chancery) applying maxims of fairness.
    • Equity: A body of rules intended to alleviate the harshness of common law.
    • Supreme Court Act 1986 (Vic) s 29: Law and equity are administered concurrently; if they conflict, equity prevails.
  • Principles of Equity:
    • Discretionary: Courts are not bound to grant relief.
    • Equity follows the law: Will not depart from common law unless the result is manifestly unfair.
    • Clean hands: Must not be guilty of misconduct.
    • Does nothing in vain: No remedy unless it solves the problem.
    • Aids the vigilant: Aids those who look after their interests early.
    • Will not suffer a wrong without a remedy.
    • Acts in personam: Provides a remedy for a person rather than general law.

Law and Justice (Topic 1B)

  • Defining Justice: Fairness in decisions, compensation, punishment, or distribution.
  • Types of Justice:
    • Distributive: Dividing economic resources.
    • Retributive: Response to wrongful acts/punishment.
    • Restorative: Restoring the victim and reintegrating the perpetrator.
    • Procedural: Ensuring the legal process is fair (right to trial, timely notice, legal representation).
    • Natural: Fairness from administrative power holders.
  • Distributive Justice Theories (The Chocolate Cake Analogy):
    • Egalitarianism: Everyone gets an equal share regardless of need.
    • Desert Theory: Based on effort, performance, or what one deserves.
    • Utilitarianism: Maximizing utility/happiness for the greatest number.
  • The Rule of Law:
    • Popularized by AV Dicey. Law applies to everyone, including the government.
    • Ideals: Certainty, Flexibility, Accessibility, Fairness.
    • Magna Carta (1215): Signed by King John at Runnymede. First restraint on the "Divine Right of Kings," making the King subject to law.
  • Legal Philosophy (Jurisprudence):
    • Legal Positivism: Law as a set of rules without moral content; what the law is, not what it ought to be.
    • Natural Justice: Defined by universal standards (e.g., Nuremberg trials judged Nazi criminals by natural standards even if they didn't break local German law).
  • Ethical Theories in Business:
    • Utilitarianism: Focuses on outcomes/consequences. Maximizes happiness. Problem: The end doesn't always justify the means.
    • Kantianism: Focuses on principles and intrinsic moral value. Problem: Ethical rules can conflict.
    • Virtue Ethics: Focuses on the character/virtues of the decider (e.g., integrity, honesty). Problem: Doesn't always resolve moral dilemmas.
  • Terra Carta: A recovery plan by King Charles III putting nature and planet at the heart of value creation.

The Australian Legal/Political System (Topic 1C)

  • Legal History:
    • Following British settlement in the 1700s1700\text{s}, Australia was declared terra nullius (uninhabited).
    • Doctrine of Reception: British settlers brought common law with them.
    • Federation (1901): On 1 January 19011\text{ January 1901}, six self-governing colonies united into the Commonwealth of Australia.
  • Key Features:
    • Constitutional Monarchy: The reigning sovereign of Great Britain (King Charles III) is the Head of State, represented by the Governor-General (Federal) and Governors (State).
    • Liberal Democracy: Protects individual rights (free speech, fair trial) and free markets.
    • Representative Democracy: Citizens elect members of Parliament to represent electorates.
    • Responsible Government (Westminster System): The Executive is answerable to the Legislature. Ministers must be elected members of Parliament.
  • Separation of Powers:
    • The Legislature (Parliament): Makes law.
    • The Executive (Government): Carries law out.
    • The Judiciary (Courts): Interprets the law.
    • Note: In Australia, the Executive and Legislature overlap because Ministers are part of both.

The Australian Constitution (Topic 1D)

  • Structure of the Constitution:
    • Chapter 1: Parliament
    • Chapter 2: The Executive Govt
    • Chapter 3: The Judicature (Court system)
    • Chapter 4: Finance and Trade
    • Chapter 5: The States
    • Chapter 6: New States
    • Chapter 7: Miscellaneous
    • Chapter 8: Alteration of the Constitution
  • Legislative Powers:
    • Exclusive Powers: Solely for the Federal government (e.g., customs (s90s90), raising military forces (s114s114), coining money (s115s115)).
    • Concurrent Powers (s51s51): Areas shared by State and Federal governments (e.g., taxation, trade, corporations, marriage).
    • Residual Powers: Areas not listed in the Constitution that remain with the States (e.g., health, education).
  • Constitutional Inconsistency (s109s109): If State and Federal laws conflict, the Federal law prevails and the State law is invalid to the extent of the inconsistency (Case: Wallis v Downward-Pickford (1994)).
  • High Court Cases Expanding Federal Power:
    • External Affairs Power (s51(xxix)s51(xxix)): Broadly interpreted to include international treaties. Case: Cth v Tasmania (1983) (Tasmanian Dam Case) allowed the Federal govt to stop a state hydro-electric plant based on environmental conventions.
    • Corporations Power (s51(xx)s51(xx)): Initially restricted (Case: NSW v Cth (1990)), but States voluntary transferred power to create a unified national corporate framework.
  • The Executive Government: Vested in the King, exercisable by the Governor-General. Includes the Cabinet and Federal Executive Council.
  • Challenging the Executive:
    • Ombudsman: Investigates administrative complaints.
    • Freedom of Information (FOI): Right to access documents.
    • Administrative Review Tribunal (ART): Replaced the AAT on 14 October 202414\text{ October 2024}.
    • Judicial Review: Courts issuing prerogative writs.
  • Changing the Constitution (s128s128): Requires a referendum passed by an absolute majority of both houses of Parliament, a majority of voters nationwide, and a majority of the States (4/64/6). Only 8 out of 458\text{ out of 45} attempts have been successful.