Corporate Law LAW2001
Trimester 3 – 2016
Assessment 1 - Participation Activity 2
Module 2 (Topic 2.1) - Chapter 6
[2.5% - 5 marks]*
Case Study 2
Janice was an art dealer and the director of ‘Janice’s Gems Pty Ltd’. On behalf of the company, Janice agreed to sell a painting by a famous contemporary artist to an art collector, Tim. Before the date on which payment and delivery of the painting were due, the famous artist died and all of his artworks drastically increased in value overnight, which meant that Janice had in fact agreed to sell the painting for millions of dollars less than its current value. Janice was devastated and came up with a strategy to avoid delivering the painting to Tim.
Janice would allege that the corporate constitution of Janice’s Gems Pty Ltd placed a prohibition on the sale of artworks and that its business activities were restricted to the acquisition of artworks for display in art galleries and museums. Janice would argue that any contract for the sale of an artwork entered into by Janice’s Gems Pty Ltd with a third party would consequently be void.
Discuss the legal issues raised by Janice’s strategy and what argument could be advanced by Tim to defeat this strategy. What would the outcome be? Provide relevant case law and/or statutory law as authority for your answer.
In answering the question, use the following guide to structure your answer:
1. Identify the legal issue/s raised.
2. Research the law relevant to the legal issue/s. State and analyse the law.
3. Apply the law to the relevant facts of the case study. Quote the actual words used in the case study when selecting the relevant facts. Give reasons and support your answer with relevant case law and/or statutory law wherever possible. Apply the statutory law first and explain why it and/or any relevant case law cover/s the relevant facts.
Set out the argument: you need to consider the law from the perspective of both of the parties. In particular, check whether any exception or defence applies to the legal principles raised. (If the case law is not settled or different interpretations of the law apply, set out the opposing views).
4. State your conclusion, which should follow on from the reasoning in your answer.
*Case study 1 and Case study 2 are each worth half of the overall mark for Participation Activity 2.