Business Law and Ethics
Contract Law
Elements of a valid contract: offer, acceptance, consideration, intention to create legal relations, capacity, and legality. Understand terms (conditions, warranties, innominate terms) and remedies for breach (damages, specific performance, injunction). Traps: confusing invitation to treat with offer; forgetting that consideration must be sufficient but need not be adequate.
Corporations Law
Key concepts: separate legal entity (Salomon v Salomon), limited liability, directors' duties (care and diligence, good faith, not to misuse position or information), and insolvent trading. Business structures: sole trader, partnership, company, trust. Traps: assuming directors are liable for company debts (unless insolvent trading or personal guarantees).
Ethics
Ethical theories: utilitarianism, deontology, virtue ethics. Professional codes of conduct (e.g., CA ANZ Code of Ethics based on IESBA). Fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, professional behaviour. Traps: conflicts of interest; confidentiality exceptions (legal requirement, professional duty).
Worked Example
A director learns that the company is about to lose a major contract and sells her shares before the information is public. This breaches the duty not to misuse inside information and may constitute insider trading under the Corporations Act. She could face civil penalties and criminal liability.
Rule of thumb: Directors must act in the best interests of the company and avoid conflicts of interest; disclose and manage conflicts.