Tanya JosevEmail: tjosev@unimelb.edu.au Office: 740 (Level 7 of the Law School)

Principles of Business LawSemester Two, 2011

One weekly lecture (2 hrs) Taught in two parts:

▪ A general overview of the week’s topic (following the Lecture Outlines)

▪ A weekly ‘case study’ to put what you have learned in perspective One weekly computer tutorial on the ‘First Principles

of Business Law’ software – to do in your own time Weekly reading from the Source Book, ‘First

Principles of Business Law’

and, on a purely optional/voluntary basis... ‘consulting sessions’ are offered twice a week in the law school to offer

a forum for queries

There are 4 components of assessment in PBL.

3 skills-tasks. These are done in weeks 4, 7 and 10. Each skills task counts for 15% of your final mark. They are all computer-based tests, in multiple choice format, done under supervision in designated computer labs. Each test takes about an hour. You can book the time at which you do the test via the Student Portal. Skills Task One: Friday 19th August Skills Task Two: Friday 9th September Skills Task Three: Friday 14th October

The end-of-semester exam. The exam counts for 55% of the final mark. It is also a computer-based test in multiple choice format.

None of the tests or the exam is a ‘hurdle’ requirement. Your final mark is calculated by adding together all your marks for the four components of assessment.

See the PBL homepage on the Learning Management System (LMS) for more information about the skills tasks and exam.

• Get the PBL materials as soon as possible. They are available on level 2 of this building.

• The materials consist of lecture outlines (including a timeline of topics), computer-based tutorials and a Source Book.

• The CD is copy protected so don’t buy old copies of these materials.

• There is a printed outline for each week’s lecture.

• In the lectures, I introduce you to new topics and explain the major concepts involved

• Lectures are not sufficient on their own. Additional work is required after each lecture.

• PBL lectures are not audio streamed.

• You do a computer-based tutorial each week in your own time. Expect to spend 2 – 3 hours on this.

• You can install the tutorials on your own computer. They are also available in the Law School computer labs on level 3.

• Read the CD booklet before installing the software on your computer.

• If you have Windows Vista or Windows 7, make sure to run the software ‘as administrator’. See the CD booklet.

• If you have a Mac, you will need Boot Camp and a Windows operating system.

• The FPBL software is copy-protected. If you reformat your computer after installing the software you will have to buy a new licence.

• After doing the tutorials, look through the relevant chapter of the Source Book. You will find:

– “Focus questions” that help you think about what you should have learned.

– A summary of the principles that have been explained in the relevant tutorial.

– Summaries of cases that have been decided in the past by the courts.

– Selected sections from legislation enacted by Australian governments.

– Some tables and indexes.

There are voluntary consulting sessions each week, starting next week.

The consultant is Laura Griffin. The times are:

Thursday, 1:30 – 2:30pm in Room 224, Law School Building

Friday, 1:30 – 2:30pm in Room G27, Law School Building

You can email the PBL consultant, Laura, at law-pblhelp@unimelb.edu.au if you have a short question. The email link is on the LMS.

For help with administrative matters, go to the Law School student centre on the mezzanine level of the Law school. Andrew Sage will assist you. You can email Andrew at:

pbl-administration@unimelb.edu.au. The email link is on the LMS.

If something unexpected and beyond your control happens that affects your study, see the LMS for information on how to apply for special consideration.

Business Law

The difference between legal rules and non-legal rules

Who makes ‘the law’? (ie legal rules)The subject-matter of law: some

examplesWhat is ‘business law’?The anatomy of law(a short break, then...)Case Study: The Coffee Shop

• We can define law as rules of conduct or organisation that are recognised, applied and enforced by the power of the state. Non-legal rules are rules of conduct or organisation that are enforced by things such as peer pressure, a need for co-operation, feelings of goodwill, or convenience.

• Non-legal rules are derived from a variety of sources, eg:

– moral or philosophical beliefs

– religious beliefs

– the ‘laws’ of nature

– social values

– rules that have become customary in a community.

• Non-legal rules work well enough in smaller groups and communities.

• In larger groups, non-legal rules become inadequate. Rules enforced by the state are common in all larger societies as a necessary means of regulating conduct.

• The particular rules that the state chooses to enforce are identified and made in different ways. • One possibility is for the state to decide to enforce rules that originate as

non-legal rules, eg philosophical beliefs, or established customs.• Another possibility is for new rules to be created in response to a

perceived need for regulation.

This raises the question, who has the authority to make law?

In Australia, the power to make law is exercised by the various governments that exist at federal, state and territory level.

Governments make law through specified agencies, following recognised procedures or processes.

The main agencies of law making at federal, state and territory level in Australia are: elected legislatures, and the courts.

The computer-based tutorial ‘Government and Law in Australia’ provides more details about the structure of government in Australia.

Many aspects of daily life are governed or affected by the law. Consider and explain each of the terms listed below. Each term refers to a generally recognised ‘division’, ‘area’ or ‘category’ of law.

Contract law Tort law Property law Agency law Criminal law and civil law Corporations law Constitutional law National and international law

It is important to note that each area of law is concerned with particular types of conduct or situations. Dividing legal rules into areas helps to clarify the nature and structure of the law.

If you take examples of particular situations or events, you should be able to identify the relevant area of law.

For example, if a person is arrested for deliberately setting fire to a building, the facts suggest that the criminal law is relevant, because this conduct is prohibited and punished by the state.

What about: Forming a new company and registering it? Buying an apartment in the city? Getting the latest iPhone on a cheap mobile plan? Slipping on a wet floor at the supermarket and sustaining

serious injury?

Business law consists of selected rules of law that are of particular relevance to business activities. For example, business law includes aspects of: contract law tort law criminal law plus selected topics from other traditional

divisions of law.

Knowledge of business law is important because it enables a person to: Recognise the legal aspect of typical business

situations and understand the legal rules involved. Know the extent to which they can rely on legal rights

and duties. Know how to use the law constructively to achieve

desired outcomes. For example:▪ Enforceable agreements for goods and services can

be created.▪ Property rights can be acquired and protected.▪ Business organisations can be created.▪ How finance can be raised.

In studying law, you will encounter references not just to ‘the law’ as a whole, and to the major ‘areas of law, but also to things such as legal ‘concepts’, ‘principles’ and ‘rules’.

What do these terms mean? Study the diagram on the next page.

Time for a break…

We resume in 15 minutes

‘Law in action’ !

Stella decides to open a coffee shop in Melbourne. Rather than operate as a sole trader, she registers a company as the owner of the business. Acting on behalf of the company, Stella leases business premises, employs waiters, gets a loan from the bank and purchases equipment and supplies. She gets permission from the local council to put chairs, tables and umbrellas on the pavement outside the coffee shop. When she opens for business the following things happen:

• Stella does not properly secure one of the umbrellas and a customer is injured when it blows over in a gust of wind. The customer demands compensation.

• The espresso machine she bought to make coffee turns out to be defective. Stella wants to return it.

• A health inspector says that Stella’s kitchen is dirty. Stella’s company is prosecuted and fined $1000.

• A person (Peter) enters the shop and steals $1000 from the cash register. He is caught by the police.

• John owns the shop next door to the coffee shop. He claims that Stella’s tables are encroaching on his space and starts pushing the tables out of the way each day.

Find examples in the case-study of how the law does the following things:

Allows people to plan for the future with reasonable certainty. Lays down the rights, duties and powers of members of different

classes and groups. Permits, encourages, forbids or discourages particular activities. Controls the use of force and forbids unauthorised violence. Creates rights and duties that can be enforced and provides

remedies when rights are interfered with or when duties are not discharged.

In any given situation it is likely that a variety of different questions will arise.

For example, when deciding whether to buy an item in a local shop rather than by bidding in an on-line auction, there may be: financial questions (the cheapest price);

practical questions (how to pay, delay in getting delivery);

social questions (the value of good personal relationships and goodwill) and

legal questions (non-delivery, faulty goods, etc).

A legal question (issue) is one which is resolved by finding and applying a rule of law. Find some legal issues that arise from the case-study.

Why is it important to know the law? Are people expected to know the law? Where do you look to find the law? In what different forms does the law exist? How are rules of law collected and organised?

Knowledge of the different areas of law helps in knowing where to look for the law that is relevant to particular facts. Which areas of law do the following aspects of the case study involve?

Peter steals $1000 from the cash register.

A customer is injured when an umbrella blows over.

Stella leases premises, employs waiters and borrows money.

Stella purchases equipment and supplies.

Stella registers a company.

Stella manages the cafe on behalf of the company.

In basic terms, legal decision making involves applying particular rules to specified facts in order to decide the appropriate outcome. In other words, the proper outcome or result of a case is deduced by applying the relevant rules of law to the proved facts. For example:

Facts: Peter, who is 34 years old, has stolen $1000.Issue: How should Peter be punished?Rule: All persons found guilty of serious theft must go

to prison.Decision: Peter must go to prison.

Deciding questions in this way is a logical, deductive approach. The correct decision is presumed to result from the logical process.

Generally, as well as being logical, legal decisions ought to be ‘just’. One element of justice is that everybody should be treated in the same way. That means that if another case were to arise with essentially the same facts as in Peter’s case, that other person should be treated in the same way as Peter.

However, if case were to arise which involved significantly different facts from Peter’s case, applying the same rule might lead to an outcome that seems harsh and unfair. For example:

Facts: William, who is 12 years old, has stolen $1000.

Issue: How should William be punished?

Would it be fair to apply the rule that all persons found guilty of serious theft must go to prison? Obviously not. To send a child to prison would be in an obviously harsh outcome,

and justice requires that outcomes should not be unduly harsh or unfair.

We need to decide William’s case differently from Peter’s, taking account of the important fact that William is only a child.

The original rule needs to be restated more narrowly, to say: 'All adult persons found guilty of serious theft must go to prison'. A different rule 'Children found guilty of serious theft must be placed on probation'. This latter rule should be applied in all future cases of serious theft by children.

The strictly logical application of existing rules promotes certainty and predictability.

The fair and just nature of judicial decisions promotes respect and support for the law.

By taking proper account of significant differences of fact, and finding appropriate rules to apply to each type of case, the courts can strike a balance between the strict application of established rules and the pursuit of fair outcomes.

Do the computer-based tutorial ‘Government and law in Australia’.

Read chapters 1 and 2 of the First Principles of Business Law source book.

And…

Copyright reserved 2011

Future Law is the network for aspiring law students

Interested in studying law? Join Future Law

- Get access to sample law classes

- Get help preparing for the LSAT

- Meet current law students and academics

- Stay in touch via Future Law e-news

Register now:www.futurelaw.unimelb.edu.au

Find out more, join us at:Melbourne JD Information Sessions 28 July, 25 August

Life in the JD – the Student Experience 10 August

LSAT Information Session 2 August, 4 October

Lunchtime Sample Law Classes

Family Law: Legislating for shared parenting 9 August

Refugee Law: Australia’s refugee policy 23 August

Taxation law: Deduct your education expenses 30 August

www.futurelaw.unimelb.edu.au

Guest Lecture Series

GM15, Melbourne Law School, Thursdays at 1pm

Drugs, Death, the Media and Foreign Law (GLS1) 4 August

Australia’s Carbon Pricing Scheme (GLS2) 8 September

Whaling and the International Court of Justice (GLS3) 15 September

Facing up to Facebook in employment (GLS4) 6 October

To register:

www.jd.law.unimelb.edu.au/GLS[1-4]