Law for Business

Law for Business

Introduction

This paper intends to explore the business law of Australia in relation with the case study of Groucho, Harpo and Chico. All three of them were friends and studied film making together. Right after graduating; they decided to make films together; however, there was not any written contract between them. Their film making project was successful and Zippo invested a huge amount of money in their production with certain conditions. Now the situation is that the company has become huge and is making exceptional profits. The business partners have started to believe that each one of them individually is the basic reason of the success and they want to exploit the situation. After extensive expenditures made on behalf of the company by individuals; the company is now faced with bankruptcy. The purpose of this paper is to analyse the partnership statues of the company and the liabilities of Harpo and Groucho. All the relevant business laws will be analysed in the form of Issues, Relevant Laws, Application and Conclusion.

Discussion

The case of Groucho, Harpo, Chico and Zippo reveals the significance of contract law. Groucho, Harpo and Chico being friends did not realize the importance of formal contract law. Initially, while entering into business partnerships; people do not bother to sign the formal agreements because everyone believe that business will be smooth and no one would ever need to refer to the contract clauses. However, with the passage of time, it has been witnessed that people are faced with certain problems within partnerships. These problems can occur for any reason like distribution of profits, work or even liabilities. The IRAC approach makes it extremely easy for the readers to analyse the case from different perspectives.

Issues

The basic issue identified in the case is the existence of partnership between Groucho, Harpo, Chico and Zippo. Initially, the three friends started doing business together without entering into a formal agreement which can be referred in the times of troubles. Similarly, Zippo only invested money in the company; he did not enter into a partnership (AG, 2010 Pp. 1-13).

Another issue which can be relevant to the case is the existence of a valid contract. Just like the existence of valid partnership; the existence of valid contract also lacks between the partners and even the investors. The existence of valid contract is extremely important in order to avoid circumstances which the TLP is facing currently (www.australiancontractlaw.com).

Relevant Laws

There are different laws relevant to the issues described above. The Australian law have made several amendments within the partnership acts. Moreover, different states imply different acts of partnership. For instance, WA uses the partnership act 1895 whereas NT uses the Partnership Act 1997. All the jurisdictions define partnership similarly. However, it remains an extremely important aspect of valid partnership to possess valid agreement, to carry on business jointly, to move on with the business in common and the view to profit must be justified. Individuals acting in the partnerships with the intent to become ...