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BUS107 Commercial Law

Question

Answered

Task

Case Scenario

Mark is a Director of a pet food company, Happy Pets Pty Ltd. His best friend, Jordan, owns Pawfect Fur Pty Ltd, a dog food manufacturer called “Pawfect Fur”. Jordan’s company is struggling financially due to the pandemic around the world and is not able to sell its products overseas. Jordan offers $50,000.00 to Mark if Pawfect Fur Pty Ltd enters a supply agreement with Happy Pets Pty Ltd. Mark recommends Pawfect Fur Pty Ltd to Chloe, the other director of Happy Pets Pty Ltd. Chloe explains that she does not have any knowledge on dog food and that she will let Mark make decisions in that area. Mark enters the supply agreement with Pawfect Fur Pty Ltd although he is aware that the Pawfect Fur dog food is famous for having a low quality product. The shareholders are not happy with this new agreement and threaten to take legal action against the Directors of Happy Pets Pty Ltd.

Jean is a customer of Happy Pets Pty Ltd. One day she visited the store’s website to purchase dog food for her dog. She notices that there is a promotion for Pawfect Fur dog food that says “try before you buy” which will give her one week to try the dog food before she decides on the purchase. Payments will be processed after her confirmation of the purchase or after the one week expires. However, Jean decides not to complete the purchase of the Pawfect Fur dog food and chooses to return the product. Happy Pets Pty Ltd refuses to accept the returned product as the one week trial period has already passed which means that Jean is now the owner of the product.

The next day, Jean’s dog is very unwell. She was later advised by her vet that the dog is having stomach issues because of the Pawfect Fur dog food. She checks the packaging and realises that the dog food is one month past its expiry date. The vet recommends her dog should be hospitalised. Jean needs to pay $5,000 for all the health treatment that is required.

Questions 

1. Company Law

Use the IRAC method to advise the shareholders of Happy Pets Pty Ltd whether the Directors (Mark and Chloe) have breached their Director’s Duties and if they have any defences.

2. Sale of Goods

Use the IRAC method to advise Jean whether she is the owner of the Pawfect Fur dog food and if she can return it to Happy Pets Pty Ltd based on the Sale of Goods Act.

3. Law of Torts

Use the IRAC method to advise Jean if she can sue Happy Pets Pty Ltd under the Law of Torts and if Happy Pets Pty Ltd has any defences.

BUS107 Commercial Law

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