• Internal Code :
  • Subject Code : LAW00150
  • University : Southern Cross University
  • Subject Name : Business law

Legal Problems

Question 1 Set of Problems Topic 3

Examine the following two situations and:

  • state whether Tony and Brenda intended to be legally bound (just write Yes or No) and

  • state the rule and the case that best supports your decision.

1. Tony and Brenda are very close friends and Tony has promised to give Brenda $50 if she waters his garden for a week while he is overseas.

Answer: No.

As an essential of a valid contract offer and acceptance is required, an offer has been made but is not accepted, so it is not a legal contract.

Smith v. Hughes. 1871. The court held that a contract requires proper offer and acceptance else it shall not be a valid contract.

2. Tony and Brenda do not know each other personally and Brenda has responded to an ad that Tony had placed in a newspaper offering to pay $50 to someone who agreed to water his garden.

Answer: Yes.

Essentials of the contract are present and fulfilled, as it requires an offer, acceptance, proposal, consideration, and mutual consent.

Carlill v. Carbolic Smoke Ball Co. 1893. It was held that proper offer and acceptance were done by the parties, therefore the contract is done with mutual consent and consideration, therefore it is a valid contract.

Question 2 Set of problems Topic 3

Examine the following five situations and:

  • state whether consideration is present from both Dale and John (just write Yes or No; ignore other issues such as Intention) and

  • state the rule and the case that best supports your decision.

1. John cleans his next-door neighbor Dale's swimming pool because it was inundated with leaves blown from a tree on his land during a storm. Two weeks later Dale tells John that she so appreciated the excellent job he did that she will pay him $200.

Answer: Yes.

Consideration is an essential of a contract whether oral or written. Consideration is present by both parties.

Coulls v. Bagots Executor and Trustee Co.Ltd. 1967. It was held by the court that consideration is a valid feature of a contract that fulfills the requirement of the contract and connects other essentials to it.

2. John has borrowed $4,000 from Dale and it is agreed that he will repay the full amount by 30 June 2020 or else he will also be required to pay $400 interest. John informs Dale that he cannot repay her by 30 June but offers to pay her $2,000 on 30 May provided she promises to accept that amount and promise not to sue her for the outstanding amount and the interest. Dale agrees to John’s offer so he pays her the $2,000.

Answer: Yes.

Consideration is an essential of a contract whether oral or written. Consideration is present by both parties.

Carlill v. Carbolic Smoke Ball Co. 1893. It was also held by the court that before entering into a valid contract, there was the consideration of forming and entering into the contract, therefore it fulfills the requirement and is a valid contract.

3. John has promised to give Dale $10,000 if she promises to be friendly to him for the next two years.

Answer: No.

Consideration requires mutual consent by both parties, without any force or any imposed terms and conditions.

Carlill v. Carbolic Smoke Ball Co. 1893. It was also held by the court that before entering into a valid contract, there was the consideration of forming and entering into the contract, therefore if it is done without the mutual consent shall not be a valid contract.

4. Dale is a police officer. While driving in her police car she sees John being assaulted by a thug. John offers Dale $100 to arrest the assailant.

Answer: Yes.

Consideration and mutual consent are involved, is therefore a valid agreement or contract.

Biotechnology Australia Pty Ltd v. Pace. 1988. It was held that if power is given or transferred to the third party in an agreement, then that agreement shall not be uncertain. It is totally on the parties to involve and include.

5. On Monday Dale agrees to clean John’s windows the following Friday for $100. The day before she is due to do the job she is offered $300 to clean another person's windows. She phones John to say that she will be unable to do the agreed work. John is desperate to get the windows cleaned before he hosts a big party at his home on Saturday so he offers Dale an additional $200 if she does the agreed job on Friday.

Answer: No.

An offer and acceptance have been done, is a valid contract but termination of the same has been done by one party, therefore it is a valid act, and service was terminated by the will of the service provider.

Taylor v. Caldwell, 1863. The court held that termination can be done by either of the parties, by informing or by addressing to the other party.

Question 3 Set of problems Topic 4

Fynn enters into a contract to sell Toby his 1999 Commodore for $3,000. During negotiations leading up to the contract Fynn assured Toby that there was no rust in the car.

Examine the following three situations and:

  • state whether Fynn’s statement about rust is a term of the contract or a representation (just write term or representation) and

  • State the rule and the case that best support your decision.

1. Where three weeks pass before Toby accepts Fynn’s offer.

Answer: Representation.

Informing about the activity, not on the papers but informing about the situation.

Dietrich v. The Queen, 1992. Representation is just a process to show and build an image of a valid contract.

2. Where Fynn works as a salesperson at a local used car yard.

Answer: Representation

Informing about the activity, not on the papers but informing about the situation.

Dietrich v. The Queen, 1992. Representation is just a process to show and build an image of a valid promise.

3. Where Fynn and Toby write down all the things they have agreed to (including the no-rust assurance) on a sheet of paper that neither sign.

Answer: Term.

A contract is formed based on terms and is legally binding in the country; moreover the terms which are implied are on the words or provisions hat a count tells that the contract and terms were intended.

Carlill v. Carbolic Smoke Ball Co. 1893. It was also held by the court that agreeing on the terms after getting knowledge about every clause mentioned directly means to know and have the acknowledgment about the fact and circumstances.

Question 4 Problem Topic 4

Grant sells second-hand motor vehicles from his Sydney car yard. Grant enters into a contract with the Ace Security Company whose guards are required to patrol his premises every night. One night Georgie, the Ace security guard on patrol, lights a cigarette and throws the match into what she thinks is a puddle of water but is, in fact, oil which catches fire and then causes an explosion that destroys the car yard and all the vehicles contained therein. The contract between Grant and Ace includes the following clause:

Ace Security shall not be responsible, under any circumstances, for damage or an injurious act caused by an employee of the company unless such an act could have been foreseen and avoided by the exercise of due diligence on the part of the Company as his employer.

What will you advise Grant who has come to you very distressed and fully expecting to successfully sue Ace Security Company? (NB ignore any possible statute law issues).

a) State the issue you need to consider. (1mark)

Answer: An act of negligence on the part of an employee of Ace Security Company.

b) State the relevant legal rule relating to this problem. (1 mark)

Answer: The Civil Liability Act Australia 2003, Section 9 of the Act tells about the explicitly indicated responsibility of the defendant to take every possible risk which is absent from the present facts and circumstance.

c) State the main case related to this problem. (1 mark)

Answer: Donoughe v. Stevenson 1932, AC 562.

d) Based on this information, if Grant sued the security company for the destruction of his car yard would he win in court? What is your answer – yes? or no? Explain your answer. (2 marks)

Answer: Yes, Grant will be able to win the case against the company on the grounds of the negligence caused by an employer of the company. Though the policy of the company says that they shall not be liable for the actions of the employee but also it is not mentioned in the policy about the action of the negligence.

Question 5 Problem Topic 5

Anya enters into a contract with a local electrical company to install ceiling fans throughout her home. Unfortunately the electrician did not correctly attach the lounge room fan causing it to fall onto Anya’s coffee table on which sat a sculpture that she had purchased for $3,000. The sculpture was damaged beyond repair. She seeks your advice as to whether she would be successful if she sued the electrical company for a breach of contract even though the written contract contained no term relating to the proper installation of the fans.

a) State the issue you need to consider. (1mark)

Answer: Whether a breach of contract was done on the part of the electrician.

b) State the relevant legal rule relating to this problem. (1 mark)

Answer: Breach of contract and breach of care of duty will be applied to the facts.

c) State the main case related to this problem. (1 mark)

Answer: F.Y.D. Investment Pty Ltd v. Promptair Pty (Ltd No 2) [2019] FCA 419.

d) Based on this information, will Anya win if she sues the electrical company for breach of contract? What is your answer – yes? or no? Explain your answer. (2 marks)

Answer: Yes, Anya can win the case if she sues the electrician on the grounds of breach of contract and breach of duty of care. There was no contract signed, but it is the moral duty of a worker to provide the best services, moreover, the fan could have fallen over Anya at the moment if she was present there. It was the moral duty of electricians to fix things properly, also it’s an act of negligence on the part of electricians.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Law Assignment Help

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