Please note that the word limit of 2 000 words is a total for both questions (ie, it is not 2 000 words for each question). I would however expect that students should be able to answer both questions in far less than 2 000 words. Your bibliography is not included in the word limit.

You must use the ILAC format when answering these questions.

**In this subject, assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format, NOT as a PDF document. If you submit in PDF it will not be able to be marked.**

***If you anticipate applying for an extension for this assignment, please read the rules on extensions in this Subject Outline before doing so.***

Question 1 (10 marks)

Sue, Grabbit & Runne is a firm of solicitors. There are three partners, Anne, Mary and Jane. There is a partnership agreement which states that each partner may enter into contracts worth up to $ 50 000, but that any contract in excess of that amount requires the prior agreement of all partners.

Anne and Mary are away at a law conference when Jane sees an advert in the local Law Society Journal for a set of law reports being sold by a local barrister, Tom, who is retiring. The set would cost in excess of $ 100 000 if all the back issues were bought from the publisher, so Jane thinks that the asking price of $ 60 000 is very good, and she agrees to buy them for the firm.

She also decides that because she and Mary both did film studies as part of their undergraduate degrees, the firm would make money if it branched out into film-making, and so she buys a movie camera for $ 20 000 from Edgar. When Anne and Mary return from the conference they are furious to find out what Jane has done and refuse to authorise payment for the law reports and the camera from the firm’s bank account.

Advise Tom and Edgar as to their legal position, citing relevant law.

Question 2 (10 marks)

Mark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-10. A term of his contract was that if he should leave the company, he could not engage in the trucking industry in Queensland for six years. In 2011 he registered a company called Sunshine Trucks Pty Ltd. Mark owns 99% of the shares. The other 1% is owned by his brother, Greg, whom he elected as sole director and CEO.

Sunshine Trucks operates from Townsville and carries goods all over Queensland. All contracts for haulage of goods are signed by Greg in the name of Sunshine Trucks Pty Ltd. Greg also signed a contract on behalf of the company, taking out a loan of $ 2 million from Grasping Bank in 2011 as start-up capital. The company did well during 2011, 2012 and the first half of 2013, but in July 2013 was not able to repay a loan instalment of $ 100 000 owing to Grasping Bank Ltd.

Mark comes to you for advice after receiving two letters: One from United Trucks Pty Ltd requiring him to cease the operations of Sunshine Trucks Ltd in Queensland, the other from Grasping Bank Ltd threatening to sue him for $ 100 000. Advise him, citing all relevant legal authority.

Please note that you should assume that the restraint of trade clause in the contract that Mark had with United Trucks is valid under the law of contract, and so you should therefore not address that issue.
**Please check that your assignment complies with the rules in the Style Guide before you hand it in.**
Rationale
This assessment will allow you to demonstrate your ability to:
• engage in legal research;
• identify the legal issues arising out of novel factual situations, to analyse the applicable law and to differentiate between which rules are applicable and which are not and then apply the law to the problem;
• to explain and summarise the applicable law in such a way as to create a report for a client which states what liabilities arise from novel factual situations

And more specifically:
• your knowledge of the law of partnership and of the legal effect of incorporation, and your knowledge of the law governing the legal relationships within partnerships and corporations and the relationships between these types of business organisation and with outsiders ;
• your ability to undertake an assessment task relevant to the workplace and professional practice.