Business And Corporation Law: Sole Trader Essay


Discuss about the Business and Corporation Law for Sole Trader.



Steve has been running a car hiring business as a sole trader. It has been quite a lot of time since the time the business has been in its operative conditions. In the first case, Steve's friend, Tom has to bear loss because of the fact that the cargo carried in truck as hired by him from Steve got collapsed during its journey to its respective destination. The truck was given to him at a charge of $200 per day and dude to the collapse; Tom had to bear a reduction of $5,000 in its profit every day.(Federal Register of Legislation, 2012)

In the second scenario, Pamela has been watering, for a month, Steve's garden, in his absence to make sure that all the plants in the garden do not die. In order to have a return favor from Steve, Pamela had called up Steve in order to get a car; free of cost, as her own car was not in a movable condition for the vacation as she was going to take on the coming weekend. Steve had said that she will be getting the car, but due to some unforeseen situation, the car was given to some other customer, when Pamela had come to take the car, from Steve. In order to get the car, Pamela had decided that she would take the whole situation to court to make sure that the car she wished to have for the vacation is given to her under any situation.(Australian Catholic University, 2012)(Government, 2012)

The third case involving Danny is almost a similar case where the desired car was not being given to him. Danny, wanting a Toyota Corolla, which he drove last week, was ready to pay $40 per day plus the charges of fuel. Steve, agreeing to provide the same was unaware of the fact that another customer destroyed the car, the previous day. Hence, when Danny came to receive the car, Steve could not supply it, as there was no availability of the respective car.

In the fourth case, Steve had by mistakenly sent the signed contract by fax to Aircon Ltd. As he was willing to sign the contract between him and a supplier of microchips, he had to revoke the contract as sent by him to Aircon. This happened because of the fact that all these paper got mixed on his desk, and he being unaware which paper was being signed by him, agreed to all the terms and conditions as stated by Aircon Ltd. As his intention was not to do so, he informed Trisha, the owner of Aircon Ltd. to get the deal cancelled.(Government, 2012)


The Australian Contract Act states for a fact that any agreement or deed, between two persons or companies, would not be considered legal, till the time legal enforceability has been executed on the same. The basic element of any contract is to make sure that it is legally bonded. Section 2 of the contract deals with the elements of each contract, which is to be executed by the parties involved. Following are certain elements, which should be apart of a contract at any given point of time:

Firstly, there should an offer made by either of the parties, which should be profitable enough for all the parties concerned.

Secondly, the offer should be accepted and the information should be transmitted to the party making an offer.

Thirdly, consideration should be given for the offer to the person or company making an offer.

Fourthly, the parties should legally enforce the agreement or promise under the law. (FOS, 2014)


As mentioned above, it is important to have a contract between the parties before any matter could be taken to the court. In the case of businesses too, contracts play a very important role in executing all their respective operations. Applying the rule in the first three cases, it should be said that there was no contract as such between Steve and other parties involved. In the first case, Steve is not responsible for the collapse of the suspension in the truck (because of which Tom had to bear a loss of $5,000 per day). It might be a mere accident or Tom did not tie the locks efficiently. In the second scenario, Pamela, who has been watering his garden for his plants to grow for a month, didn't have any agreement or contract with Steve to do so. It was only because of the cordial relation they share, which had her do the work. There was not any obligation on Steve to give her the car, as there was no contract between them. In the third scenario, Danny when went to take the car, he was informed that car was destroyed on the previous day by some other customer and hence the same could not be provided to him on the stipulated date.(Government, 2013)

In the fourth and final case, the contract was signed Steve by accident and hence he wanted to revoke the same and informed Aircon Pty Ltd. As the contract was signed between both the parties, Aircon Ltd did not have any intention to actually breach the contract. Hence, for this reason, Steve had to take the case to the court to get the contract revoked.(Government, 2014)


In the cases as mentioned above, it can be said that the contract act does play a very critical role in the various businesses. As in the fourth case, the contract had to be revoked. Hence, the provisions in the contract act had played an important role for Steve. Apart from this, in the other cases, it was important for whole scenario to be qualified as a contract. There was no specific contract between any of the parties and hence no legal action can be taken against Steve and his business. (LawNotes, 2011)


Federal Register of Legislation. (2012). Insurance contracts act 1984. Retrieved August 23, 2016, from

Australian Catholic University. (2012). Contract Law. Retrieved August 23, 2016, from

Government. (2012). Western Australian Current Acts. Retrieved August 23 2016, from

Government. (2012). Legislation. Retrieved August 23, 2016, from

FOS. (2014). Changes to the Insurance Contracts Act. Retrieved August 23, 2016, from

Government. (2014). Frustrated Contracts Act 1988 . Retrieved August 23, 2016, from

Government. (2013). australian contract law. Retrieved August 23, 2016, from

LawNotes. (2011). Contract Law. Retrieved August 23, 2016, from

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