Terence's Legal Counsel for Work Disputes


Task: You must answer the two problem-type questions below, using the ILAC (Issues, Law, Application, Conclusion) format, a worked example of which is in the Resources folder.

Question 1: Terence studies jewellery design at Charles Sturt University. After he graduates, he sets up a business called ‘Terry’s Terrific Designs’. He employs Peter and Sara, who are also CSU graduates to work for him. Peter is appointed as Supplies Purchaser and Sara as a Designer. Sara shares the design work with Terence himself.

Give Terence advice in relation to the following situations, citing relevant legal authority:

Gabby requests a brooch be made for her when Sara visits her. Sara displays to Gabby images of a variety of her own ideas. Sara neglects to inform Gabby that she is Terence's employee. Sara's art impresses Gabby, who commissions her to create an elephant-shaped $1000 brooch. The following day, Terence calls Gabby and informs her that he has received her order and will complete the brooch within two weeks. "Who are you?" asks Gabby. Sara and I have a contract.

Terence advises Peter to only purchase silver because the company has an excess of gold. However, Peter is enjoying a drink with Mary, a gold dealer with whom he has previously worked on behalf of Terry's Terrific Designs, and she makes the extremely good offer to sell 50 grammes of gold for $1500. Terence accepts Peter's offer to buy the gold on his behalf, but when Mary shows up at his shop with the gold and demands $1 500, Terence declines to take the metal or give her the money.

Terence dismisses Peter on Monday as a result of him disobeying his order to refrain from purchasing gold. However, Peter's access to the company's email system is not disabled by Terence until the following Thursday. Gordon, a diamond vendor that Peter frequently worked with on Terence's behalf, contacts Terence on Friday. Gordon claims that Peter wrote him an email on Tuesday ordering a $5,000 diamond for the jewellery store, which Peter picked up on Wednesday. Peter has vanished into South America and is no longer recognisable. Gordon is requesting payment.


Solution 1:
Brief Facts: This Corporation Law Assignment will look at Terrance, a businessman who graduated from Charles Sturt University with a degree in jewellery design and launched his enterprise under the name and brand "Terry's Terrific Designs." He hired Peter and Sara to fill the positions of supplies purchaser and designer, respectively, in order to operate the company efficiently. One time Sara visited Gabby and showed him some of her creations. Gabby was so impressed by Sara's work that he hired her to create an elephant-shaped brooch for $1,000. Sara, however, neglected to mention that she works for Terrance. Terrance called Gabby after placing an order and asked him whether his order will be ready in two weeks. In response, Gabby reminded him that he had a contract with Sara and not with Terrance.

Terrance, on the other hand, advised Peter to only purchase silver because the company had an excess of gold. A gold salesman approached Peter and Mary as they were enjoying a drink and offered him 50 grammes of gold for $1,500. Peter agrees to purchase the gold because he believes the price is extremely reasonable, but when Mary and Terrance arrive, he declines to make a payment or accept the gold. Terrance dismissed Peter on Monday but did not close his business access until Thursday because Peter had disobeyed his order not to buy gold. When Peter sent him an email on Tuesday ordering a diamond worth $ 5,000 on behalf of the jewellery company, Gordan, the diamond seller, contacted Terrance on Friday and inquired about the transaction. Peter picked up the stone on Wednesday. After that, Peter vanished into South America and was untraceable, and Gordan is now suing Terrance for his money.

Issues: In the present case, following issues were raised:

  1. As per the Corporation Law Assignment, whether the contract made by Sara with Gabby is valid as Gabby is under the impression that he had made the contract with Sara and not with Terry’s Terrific Designs?
  2. Whether Terrance is liable to pay $ 1500 to Mary on account of the deal finalized by Peter to purchase 50gms of gold in spite of the special instructions by the Terrance to not to buy gold?
  3. Whether Terrance is liable to pay $ 5,000 to Gordan on account of the diamond taken by the Peter specially when Peter was fired from the job before the order?