Notes of Business and Contract Legal Studies

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Course Notes
TECHCOMM 7012
Master of Project Management & Master of Applied Project Management

Semester 1, 2013

BUSINESS AND CONTRACT LEGAL STUDIES

Table of Contents
Introduction 5 The Common Law 6 The Law of Contract 6 The Rules of Offer and Acceptance 7 Electronic Communications 9 Contracts between Parties of different Nationalities 11 Intention to create Legal Relationships 12 Form and Consideration 13 Capacity to Contract 15 Consent of the Parties 15 Legality of Object 16 Content and Interpretation of Contracts 17 Breach of Contract 18 Liquidated Damages 19 Equitable Remedies 24 Discharge of Contracts 24 Modification of the terms of a contract during performance 26 Retention of title clauses 27

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Table of Contents (continued)
Tendering Contracts 27 Contracts of Agency 28 Statutory Modification of the Common Law 30 The law of Negligence 31 Contract Law of the Peoples’ Republic of China 37 Legal Personality, Partnerships and Corporations 56 Sole Traders 56 Partnerships 56 Corporate Personality 59 Negotiable Instruments 64 Intellectual Property 66 Copyright 66 Designs 70 Patents 71 Trademarks 71 Insurance Contracts 72 Legal Relationship between Principal and Project Manager 75 Duties of an employer under an Employment Contract 78 Duties of an employee under an Employment Contract 80 Standard Contracts for Project Management 86 Dispute Resolution 87

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Table of Contents (continued)
Litigation in the Courts 88 Commercial Arbitration 89 Alternative Dispute Resolution 94 International Arbitration 97 CONTRACTS REVIEW ACT 1980 (NSW) 98 SALE OF GOODS ACT 1923 (NSW) 101 COMPETITION & CONSUMER ACT 2010 (CTH) 103 FAIR TRADING ACT 1987 (NSW) 108 CLASS EXERCISES AND SAMPLE ANSWER 110

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Introduction
Textbook This material is to be found in Turner chapter 1. The law is of particular concern to project managers for a number of reasons. Primarily a project manager is a person or organization that is engaged to procure goods and services or both on behalf of a principal. This will be so whether the project manager is an external consultant or part of the principal’s organization. The relationship raises immediately the matters of contract law. Here the project manager will be required to set up and administer a number of contracts. There will be a contract between the project manager and his or her principal in situations where the project manager is an independent consultant. In situations where the project manager is in-house the relationship will be regulated by the project manager’s contract of employment as (perhaps) varied by letters or oral agreements. In either case the legal status of the relationship is significant and needs to be understood. More importantly, the project manager on behalf of the principal will need to procure the goods and services that constitute the project. In addition the project manager when acting in this capacity will be an agent of the principal. It is therefore necessary for the project manager to be aware of the legal obligations and rights of an agent. The law under consideration is primarily that developed by the courts (referred to as the common law) and some statutory modifications brought about by the rise of consumerism. Finally, a project manager needs to have an understanding of the civil law principles of negligence. This area of the law is expanding exponentially. There is potential for a project manager to be negligent in his or her dealings with the principal, for the project manager to be negligent in the process of procurement and for the providers of goods and services to be negligent in the provision of those goods and services. Almost any advice or statement made in the execution of a project may, if inaccurate, amount to negligence. It is also possible for factual situation to lead to liability in both breach of contract and negligence. These notes commence with a short explanation of how the law is made by the judicial process. This explanation is...
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