LST2BSL: Introduction to Business Law and Ethics

Julie owns and runs a small traffic management business called Round-The-Bend. They use signs and barriers to safely divert traffic around roadworks, construction works or emergencies on roads.  On Monday, Julie receives an email from Simon: ‘Are you available in the first week of February? We will  be carrying out some earthworks around 50 Main Rd and need someone to divert traffic.’

Julie responds immediately: ‘I don’t have any jobs booked in the first half of February. How big a team do  you need? If you can say what hours you’ll be doing the earthworks, I can give you a rough quote.’  Simon then replies on Tuesday: ‘We’re working on a pretty big stretch of the footpath – around 20  metres long. We’ll start at 6am and go until 10pm, each day until the job’s finished. It’ll probably take 3-4  days, I’d say.’

Julie then emails back: ‘Sounds like we’d need a team of 4 people. We’d need an extra half an hour  before you start, to set up, and an extra half an hour at the end to pack up and ensure everything is left in  a safe condition. We charge $340 per hour for a job this size. Our calendar tends to fill up fast, so you  need to let me know soon if you want to book the job. I can only hold the first week of February open for  you until the end of this week.’

After Simon reads the email he contacts several other traffic management businesses to get more quotes for the job. He discovers that Julie’s quote is the best but gets delayed with other matters rather than responding to her straightaway. Concerned that maybe she doesn’t check business emails on the weekend, Simon gets her mobile number from the website for Round-The-Bend and sends her an SMS at 6am on Sunday morning: ‘Simon here. It’s a YES for the Main Rd job in February!’

1. Is there a binding agreement between Simon and Julie, for the job in February?

The same week, Julie gets a call from the Berrytown local council about an upcoming ‘Easter Eggs Hunt in the Park’ event.

Peter from the council tells Julie that they have sourced a range of local businesses to volunteer their services for the event, since it is the annual charity fundraiser, for the community’s wildlife sanctuary. “Everyone in the community is pitching in – we just need someone to manage all the traffic on the day! It gets very hectic and we open up part of the local football oval to accommodate all the extra parking.”

Julie says she is willing to help. “Wonderful!” says Peter. “We don’t have much to offer in return – only a small Easter hamper of goods donated by local businesses.” “That’s fine,” replies Julie. The day before the Easter in the Park event, Julie realises she has accidentally double-booked her team.

She calls Peter: “I’m so sorry but we won’t be able to help with the Easter event tomorrow after all!” “What?” replies Peter. “You can’t back out now – we have a binding agreement. You can’t simply change your mind!”

2. Is there a binding agreement between Peter and Julie, for the local fundraiser job?

After a job Julie sends her invoice for $2300 to the client, Tina. It states that it is payable within three business days. But two weeks later, Tina still hasn’t paid. Julie calls her to follow up. “Yes, I know, you’ll have it soon” says Tina. But another two weeks go by and still she hasn’t paid. Julie decides to show up at Tina’s business to demand payment. Tina says she doesn’t have the cash to pay the whole account right now.

“That’s hardly my problem! What do I have to do to get you to pay?” says Julie. Tina responds: “Well, you could try taking me to court… but it wouldn’t change the fact I can’t pay you right now. How about this instead?” Tina then suggests that she pays Julie what she can right now, which is $1500, and then also provide her with a personal reference to Tina’s aunt Tania who works in state government. “Tania manages projects every month which need traffic management. You’ll have more jobs than you know what to do with! Tania trusts me; she’ll be happy to use your service.” Julie reluctantly agrees.

3. Is the new agreement between Tina and Julie legally binding?

Julie is attending a statewide trade show, displaying the signs and equipment that Round-The-Bend use and showing video footage of their traffic management in action. Michael comes up and chats with her about the business and the kinds of job that they take on. He explains that he’s looking for a traffic management team to help with an unusual project, working in conditions of low visibility on a steep mountain. “Hmm, that does sound tricky,” says Julie. “But I know how we can do it. We just need to get some special electronic equipment to go with our traffic lights. It can keep the whole system connected and then we can pre-empt the problem of the limited visibility. We don’t normally need such a system, but for a job like yours I think it would be a good solution.” “Great! I have been trying to find a business that will take this on. It sounds like you will be able to handle it well,” says Michael.

“Yes, we can handle it. But I’ll need you to set out all the details in writing – you can send me everything via email or fill out the form on our website. Here,” explains Julie, as she hands over a business card. “No problem, I’ll do that by tomorrow,” responds Michael, as he takes the card and puts it in his pocket. But three days later, Julie still hasn’t heard from Michael. She’s wondering whether to go ahead and order the special equipment and electronics needed to take on this unusual job. She looks up the details of Michael’s business, and calls him. She asks if he’s still interested, and reminds him that there are extra details, like dates, location, and hours, that he needs to indicate on the form. “Yes, we’re definitely still interested! I’ve just been too busy to fill out the online form this week. But we’re on for the project. So, do what you need to do, and you’ll have all the details from me soon,” says Michael. Julie goes ahead and orders the special equipment, which costs $3,000. A week later, the online form still hasn’t been completed. Julie calls Michael but he doesn’t answer. The next day she receives a voicemail from him saying that he’s no longer going ahead with the project.

4. Can Michael be ‘estopped’ from saying that he has no agreement with Julie?

Guide to citation for the common law assignment Legal citation is different to other styles of citation, such as Harvard or other in-text citation. Legal citation involves providing the most relevant legal authority for any statement of legal rules or principles. Citations are provided in footnotes. (If you’re working in MS Word, simply go to the ‘References’ tab and click on ‘Insert Footnote’.) For the purposes of LST2BSL Introduction to Business Law and Ethics, we do not expect you to learn the Australian Legal Guide to Citation, which is the usual approach to legal citation in Australia. That Guide is incredibly complex. Instead, you can simply follow these instructions for citations in your common law assignment.
As stated above in the Assignment Instructions, where you state a legal principle which comes from a case, you must provide a citation to the relevant case. You are not expected to read the cases themselves: as long as a case is summarised in the textbook, you can cite the case itself. An example of this would be if you said this in your assignment: If a letter of comfort includes statements which are not promissory, then it probably was not intended to be legally binding.1Alternatively, you could mention the case name in the sentence of your assignment itself, and just put the case citation in a footnote, like this:

As in the case of Commonwealth Bank of Australia v TLI Management Pty Ltd2 a letter of comfort with only non-promissory statements was probably not intended as legally binding. Either way, we expect you to provide a citation to the relevant case for the legal principle you are stating.If you are stating a legal principle that is covered in the textbook or lecture and which does not have a relevant case provided in the textbook, you should cite the textbook. An example of this would be: If an agreement is executed as a deed then there is no requirement for both parties to provide consideration.3

Please also note that you are not expected to use any materials beyond the lectures and the set textbook. But if you do, you must provide appropriate citations. No bibliography is required. Finally, remember that footnote citations do not count towards your word count, so don’t hesitate to provide citations for any statement of legal principle. If in doubt, provide a citation.