Law > EXAM > Issue, Rule, Application, and Conclusion (IRAC). Problem Solving Question (All)

Issue, Rule, Application, and Conclusion (IRAC). Problem Solving Question

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Problem Solving Question - IRAC example from week 5 In 2015 Sebastian started operating a pool cleaning business as a sole trader under the registered business name ‘Diamond Pool Cleaning’. At ... first, he completed all of the jobs himself, however, as the business grew, he hired Alberto to assist, paying him $30/hour and providing the necessary pool cleaning equipment. In November 2016, Sebastian decided he needed an injection of capital to invest in a second van, buy a third set of equipment and to hire a third person so that the business could expand. He approached Alberto and asked if he would be interested in investing in the business. On 10 November 2016 Alberto agreed to contribute $15,000.00 in exchange for a 25% share of profits. He also agreed that he will now only receive $10/hour as an allowance to cover his costs. On 1 December 2016, Sebastian enters into a contract with Speedy Motors to purchase a new van for $20,000.00. He is only required to pay a deposit of $5,000.00 and is given car finance by Speedy Finance for the remaining amount. Between December 2016 and April 2017 Sebastian uses the new van to complete pool cleaning jobs and Alberto is given the old van to use for his allocated jobs. On 10 May 2017, Alberto discovers that Sebastian has converted the newly purchased vehicle into a camper-van and is about to leave Sydney to spend 6 months driving around Australia with his family. On 1 June 2017, Alberto receives a letter of demand from Speedy Finance, stating that as no repayments have been received as required under the loan contract, they are seeking immediate repayment of the full loan amount. Advise Alberto of his potential rights and liabilities. [Show More]

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