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2018 LAW00150 Introduction to Business Law Assignment 2 LEGAL PROBLEMS (30 marks) Marking criteria for all problems. Each problem is worth 5 marks. You will be assessed on your ability to: · identify...

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2018
LAW00150
Introduction to Business Law
Assignment 2
LEGAL PROBLEMS
(30 marks)
Marking criteria for all problems.
Each problem is worth 5 marks.
You will be assessed on your ability to:
· identify the legal issues;
· apply your knowledge of the law to identify the relevant rules or statutes for the problem;
· identify the relevant cases; and
· reach a conclusion whilst explaining your reasoning
Note – there is NO ru
ic for this assignment as each problem has clearly stated expectations
Problem 1
(5 marks)
Topic 3 only
Charlie operates a flower shop. He agrees to sell his business to his sister Ali for $45,000. They both use their own solicitors to negotiate the terms of a formal written agreement. The agreement contains a restriction that Charlie cannot, in the following two years, open another flower shop within 2 kilometres of the one he has just sold to Ali.
After six months, however, Charlie opens another flower shop just one kilometre away. Ali wants to sue Charlie for a
each of contract but fears the agreement was not intended to be legally binding because they are siblings.
Ignore any restraint of trade issues in your answe
a)
What is the issue you need to consider? (1mark)
)
What are the relevant legal rules relating to this problem? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information, if Ali sues Charlie for
each of contract, will she win in court? What is your answer – yes? or no? Explain your answer. (2 marks)
Problem 2
(5 marks)
Topic 3 only
Nick is organising a university student party at the student union building. He approaches the local police, wanting them to keep out “undesirables” such as drug addicts and Brisbane Bronco supporters.
The station sergeant informs him that he would have a patrol car call in periodically during the evening. Nick says he actually wants an officer stationed outside the entrance all night but is informed this will cost him $1000. Nick agrees to this proposal. After the big event, when Nick receives the account from the Police Department, he refuses to pay. The Police Department sues Nick for a
each of contract.
a)
What is the issue you need to consider? (1mark)
)
What are the relevant legal rules relating to this problem? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information will Nick win in court? What is your answer – yes? or no? Explain your answer. (2 marks)
Problem 3
(5 marks)
Topic 3 only

Mike, a motor mechanic, owes Helen $5000 due and payable on 24 June 2018. He phones Helen and informs her that he has lost his job and there is no chance he can hope to pay the full debt for a while because there are no job opportunities for mechanics in the area.
Helen says “if you can
ing me $1000 on 24 June, and while you’re here check my BMW’s steering because I’m wo
ied there’s something wrong with it, I promise I will not sue you for the rest.”
Mike does as Helen asks and then learns that she is suing him for the outstanding amount.
a)
What is the issue you need to consider? (1mark)
)
What are the relevant legal rules relating to this problem? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information, if Helen sues Mike for
each of contract will she win in court? What is your answer – yes? or no? Explain your answer. (2 marks)
Problem 4
(5 marks)
Topic 4 only
Lizzie sees a big sign in the window of the local video shop advertising a special membership offer of 100 overnight DVDs for the next three months for only $100. The sign also lists the numerous terms and conditions of the membership contract. Lizzie pays the $100 joining fee and commences to enjoy recently released movies at that cheap price.
Several weeks after joining Lizzie rents an overnight DVD and, because she falls ill, does not return it for eight days. When she does return the DVD, the shop owner tells her that she must pay an extra $140, refe
ing Lizzie to a term of the contract that states:
“Hire of DVDs under this agreement is restricted to overnight hire only. Any such DVD not returned by 3pm on the following day must be paid for at the rate of $20 per day.”
The normal late fee in the DVD-hire industry is $5 per day.
a)
What is the issue you need to consider? (1mark)
)
What are the relevant legal rules relating to this problem? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information, if The DVD store sues Lizzie for
each of contract will the store win in court? What is your answer – yes? or no? Explain your answer. (2 marks)
Problem 5
(5 marks)
Topic 4 only
Tori took her best dress to the dry cleaners because it was badly stained at a recent party. She was asked to sign a small document which looked a bit like a receipt but was headed Agreement and contained the following clause,
We will not be responsible for any loss or damage of whatever nature or howsoever caused.
Tori’s dress is damaged beyond repair and she demands compensation from the dry cleaner’s owner who flatly refuses and draws her attention to the above clause in the agreement. Tori hadn’t actually read the wording before she signed because it never occu
ed to her that anyone could avoid their obligations in this manner.
a)
What is the issue you need to consider? (1mark)
)
What are the relevant legal rules relating to this problem? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information, if Tori sued the dry cleaners for the destruction of her dress would she win in court? What is your answer – yes? or no? Explain your answer. (2 marks)
Problem 6
(5 marks)
Topic 5 only
Sandra wishes to buy a new copier for her accounting business. She tells Mr Smith of Smith’s Office Equipment that she needs one that can handle large volumes and can sort and complete work very quickly and asks for his advice on which copier she should purchase. He recommends a particular model that Sandra purchases for $12,000.
Within a week she discovers that her new machine is very slow, continually overheats and is unable to handle the large amounts of work she requires. Parts of the copier have fallen off and cracks have appeared in the glass. When she tells Mr Smith he responds that it’s not his concern and she should take it up with the manufacturer.
Refer only to the Goods Act 1958 (Vic) as per your textbook
a)
What is the issue you need to consider? (1mark)
)
What are the relevant sections of the Goods Act? (1 mark)
c)
What are the main cases related to this problem? (1 mark)
d)
Based on this information, Does Sandra have any rights against Smith’s? What is your answer – yes? or no? Explain your answer. (2 marks)

Slide 1
TOPIC 3
Making the contract Part 2
Ch 5 of Textbook
Remember the 4 elements
Offe
Acceptance
Intention
consideration
The last two elements
Intention and
Consideration
As well as offer & acceptance…
For a contract to exist, there must not only be agreement, but also:
intention to be legally bound; and
consideration.
Intention (cont)
For social or domestic agreements, courts begin with the presumption that the parties did not intend to contract. – see Balfour v Balfou
Intention (cont)
For commercial agreements, the courts begin with the presumption that the parties intended their agreement to be legally enforceable. – see Ca
olic Smoke Ball case
Intention (cont)
The ultimate question is always whether a reasonable person present at the time would have concluded that the a
angement was contractual. Ermogenous v Greek Orthodox Community of SA
Thus each presumption is rebuttable if there is evidence indicating a contrary intention – see Todd v Nicoll (domestic/social) & Rose & Frank v Crompton (commercial).
Letters of comfort and
heads of agreement/letters of intent
Letters of comfort are provided where the provider does not wish to give a formal guarantee Kleinwort Benson v Malaysia Mining
One party wants them to be binding the other doesn’t
With heads of agreement or letters of intent – look at wording for intention Air Great Lakes v Easter and Coal Cliff Collieries v Sijehama
Letters of comfort
Consideration
What is it?
Both parties must provide something of value in return for the promise made to them
Must be present in every simple contract
Not required for deeds (contracts under seal)
Example of Deed
History of consideration
Read green section on p. 200
Contract law a relatively recent development.
Chancery (Equity) would intervene to uphold promises on the basis of conscience. Look at the intention (position in most civil law countries)
Common law courts only looked to see if valuable consideration
Parties to a contract
Examples of consideration
Consideration may be:
A promise to do something
A promise not to do something
Doing something
Carlill v Ca
olic Smoke Ball Co
Refraining from doing something
A benefit flowing to the promisso
A detriment to the promisee
Examples of consideration
Executed
Where you have acted upon your promise (present consideration)
Executory
Where you are yet to act upon your promise (future consideration)
Examples
Here’s $2 for this loaf of
ead (both executed)
Here’s $20 for the meal I’ve just ordered which will be delivered by waiter in 10 minutes ($20 = executed and meal = executory)
Consideration - Rules
Consideration must move from the promisee Dunlop Pneumatic Tyre v Selfridge (see next slide)
Only parties to the contract can sue for
each of contract (privity of contract)
If a promise is made to two or more persons jointly, only one of those persons need provide consideration (‘joint promisee rule’) – see Coulls v Bagot’s Executor (no case note)
Privity rule has exceptions eg Trident
…from the promisee…
The privity rule - example
Alice promises to pay $500 to Ba
y if Ba
y will build a garage for Clive. Ba
y agrees, but then fails to do the job. Can Clive sue Ba
y for
each of contract?
Figure 5.4
Consideration – Rules (cont)
Consideration may not be past
Consideration can be present (executed) or future (executory)
see Roscorla v Thomas but
compare with
Re. Casey’s Patents; Stewart v Casey.
XXXXXXXXXXConsideration – Rules (cont)
Consideration must be sufficient
Sufficient consideration
Consideration need not be adequate or fair but must have value in the eyes of the law
Consideration may
Answered Same Day Apr 07, 2020 LAW00150 Southern Cross University

Solution

Abr Writing answered on Apr 11 2020
145 Votes
2018
LAW00150
Introduction to Business Law
Assignment 2        LEGAL PROBLEMS
Answer 1
Issue
Objective is to analyse weather Charlie has
each the contract by starting new business near Ali’s flower shop. Agreement between Ali and Charlie can be considered as legal or not.
Relevant law
Contact law, for commercial agreements it is presumed by court that parties involved aim towards legally binding relationship (Gibson & Fraser, 2013).
Intention to create legal relationship is key factor decides readiness of parties to face legal consequences. Intention to create legal relationship makes an agreement legal, enforceable and binding, it will be considered as mere promise (Latimer, 2012).
References cases
With reference to Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd Supreme Court of New South Wales [1989] 2 NSWLR 309, objective is to evaluate parties’ intention to create legal relationship. In reference case, parties involved signed an agreement for sale of an airline business, later plaintiff (Air Great Lakes) claimed
each of contract by defendant (Easter) with no intention to create legally binding relationship.
Ali position in court
Yes, Ali can sue Charlie for
each of contract, as agreement clearly mention clause of not opening a new business within 2 km area. There is presence of offer, acceptance, proper consideration of business ($45,000), and agreement was signed; all these elements make it legally binding and enforceable. According to honour Mahoney JA, in such cases “Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always, the determining factor. (www.australiancontractlaw.com, 2015)”
Answer 2
Issues
Nick agreed to pay $1000 for having an officer stationed outside the entrance all night but later denied to pay. Objective is to analyse
each of contract.
Relevant law
Consideration can be defined as price asked by the promisor in exchange of their promise. It is a mandatory requirement to make agreement binding and enforceable. Price plays a key role in consideration; however it is not mandatory that price is in monetary terms. However, it can be any detriment in exchange of other benefit received. (McKendrick & Liu, 2015)
Promissory estopple, according to this legal principle any promise made is enforceable by law, it is an equitable doctrine made to protect position of parties involved.
Reference cases
For example, case of Carlill v Ca
olic Smoke Ball Co (1983); according to given scenario the Ca
olic small ball company use to produce Ca
olic smoke ball to prevent contracting influenza to its users (Gibson & Fraser, 2013). In this case, an advertisement was made by the company which states that 100 pounds will be given to any person who contracts the increasing epidemic influenza even after stated method of use of balls. On reading the same, Mrs Carlill purchased the ball and executed the same, however he catch flu and ask for consideration from the company.
Explanation
In given case, Nick promises the station sergeant to pay $1000 for officer stationed outside the entrance all night and he agrees to...
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