Content: Apply appropriate rules: Contract law, tort law, agency, partnership,
corporation. (2 of 5)
In brackets: allocation of marks
Problem-solving questions:
CONTRACT LAW
1. Offer & Acceptance
1. Issue:
1.1. Whether the contract of buying and selling the Dell computer has been
entered between A&B or A&C?
1.2. Determine the date of contract formation
(conclusion: answer these 2 questions)
2. Rule, 3. Acceptance:
a) Rule regarding the manner of accepting an offer: Acceptance must follow any
method set out in the offer.
→ “Please accept by post”
b) Postal acceptance rule: The acceptance is complete when the letter of
acceptance is properly posted by the offeree.
The letter of acceptance creates a binding contract at the time of its posting and,
significantly, thereafter the offeror cannot revoke the offer.
c) Counteroffer: changes or seeks to change one or more of the material or
important terms of the offer
Acceptance must be unconditional. A qualified acceptance would be a
counter-offer → does not result in a legally enforceable agreement
Last-shot doctrine
2 March: accept on 2 Mar with the additional condition: ship to B’s office
(whereas A had said computer is ready for pickup) → amount to a counteroffer →
terminate the original offer by A
→ B terminated the original offer → A can sell to C
7 Mar: B offer to buy
9 Mar: letter of C qualified the acceptance requirement → contract formed
4. Conclusion:
4.1. A&C
4.2. 9 Mar
2. Past Consideration
Alice traveled on an interstate bus to Bolton to get her admission in the degree
program at one of the Universities there. Upon reaching the University, she
realized that she left her folder containing all her certificates on the bus. She
contacted the bus company. With the assistance from the bus company, she then
contacted the bus driver and asked if he could help to deliver the folder to her.
The bus driver made a trip to the University and handed over the folder to her.
Alice was very relieved and pleased and instantly announced that she would
reward the conductor with $ 500. Once her admission formalities were finalized,
Alice realized that she had been too impulsive and now refuses to hand over the
reward, saying that there was no agreement as there was no consideration to
support her promise. Do you agree? Justify your answer.
1. Issue: whether the promise that Alice gave to the bus driver is supported by valid
consideration?
2. Rule: past consideration
3. What the bus driver did has passed before she made the promise
4. Conclusion: No
3. Fraudulent Misrepresentation
1. Issue: Whether Alan can avoid the contract and claim damages under fraudulent
misrepresentation
2. Rule: Fraudulent misrepresentation - a lie used to trick SO into an agreement that
harms them
3. Application:
The ad vs facts are different → wrongful information:
- not 3 yo, 5yo
- not correct abt accident-free
- have run 150k km already
Intentionally make an advertisement
4. Conclusion: Yes, Alan can get money back
LAW OF TORT
*statement - disclaimer
4. Tort of Negligence: Negligent Misstatement
1. Issue: Can Simpkins recover the amount paid for the advertisements from the
bank? Whether the bank could be liable for the Simpkins damage
2. Rule: Apply Tort of Negligence
Negligence misstatement
Similar case you could refer to
According to what cô said: The disclaimer on the written report does not make
sense ???
The bank should be liable for paying the damage???
→ khác với case trong sách?? → nma chốt nên theo sách
5. Voluntary Assumption of Risk
Whether the football league can yield a Voluntary Assumption of Risk defense to be
released from liability?
● The legal issue and the legal rule: voluntarily assumption of risk
● The league is not liable because Gerard voluntarily assumes the risk.
Advise Gerald → help him claim st
→ It could be contributory negligence (Gerald should have been aware of the risks and
the football league should have assigned him another role for example) so Gerald can
be compensated for his damage
6. Contributory negligence
Julio suffers from a back injury, due to years of heavy lifting while working for
Samson Bros. Although there was a safe system of lifting available to workers,
Julio rarely used it. Now Julio seeks to sue Samson Bros for his back injury.
Samson Bros plan to use contributory negligence on Julio's part as a defence.
Advise Julio.
Julio can only claim part of the injury (contributory negligence) because Julio put himself
at risk.
LAW OF AGENCY
7. Formality of business arrangement
Even though the business arrangement is not required to be in writing to be valid, it
should be put in written form to be referred to in case any dispute arises
8. Duties of an agent
1. Issue: Whether Brian is liable to pay for Maya’s purchase at Eve’s Nursery
2. Rule: Duties of an agent
- Follow the principal’s instructions
The scope of authorization: $350 and then $450
Maya buys $550 → Agent go beyond the power given
- Act in good faith: must act in the best interests of principal at all times
- Make full disclosure of any personal interest
Maya does not disclose → The seller (Eve’s Nursery) didn’t know that she actually act
for the principal → she should be liable
-
Keep proper and separate accounts:
An agent must keep all moneys and property of the principal separate
from their own
Must keep separate accounts of all dealings on behalf of the principal, and
to have such accounts ready for inspection by the principal
Joint account → They should have a separate account for agency use
4. Conclusion: Brian is not liable
9. Apparent authority
1. Issue: whether Marilyn is authorized to place an order
2. Rule: Apparent authority
If a principle allows an agent to occupy a particular position (without having been
formally appointed), the agent will have apparent authority to deal with third
parties in a manner consistent with the functions normally falling within the usual
authority of the holder of that position.
3. Application:
- Marilyn can do everything with respect to the business.
- By giving her the badge, she has been authorized as manager. Marilyn: to
a 3rd party she is authorized, liable. 3rd party assumes that she is the
manager
- Which the store normally does not stock??
4. Conclusion: Marilyn is liable to Mario under the principle and agent relationship
● She can conduct the activities.
● The relationship between principal and agent: authorization has been gone
beyond but the principal (Mario) still remained reliable.
LAW OF PARTNERSHIP
10. 3 elements of a partnership
1. Issue: whether the partnership between Peter and Fred is valid or not
2. Rule:
2.1. Definition of a partnership: the Partnership Act
A partnership has 3 elements:
- Carrying on a business
- In common
- With a view to profit: partnerships do not have to make profits by
they must be created with a view to profit
2.2. Formation of partnership: A partnership is created by agreement, which may be oral
or written
3. Application:
3.1.
- Whether the parties had been “carrying on the business” was not whether the
business venture had commenced, but whether the parties had embarked on the
venture. By securing office premises and furniture for their venture, Peter and
Fred had, indeed, embarked on their venture.
- In common: there must be a mutuality or sharing of rights and obligations”.
→ Each person contributes $10,000 to form the partnership
The drafted agreement includes a stipulation that all profits from the venture are to be
shared equally between the partners
They incurred debts and liabilities
Fred invests an additional…
- With a view to profit: they have the intention to make profits
3.2. Here, a written partnership agreement is drafted
4. Conclusion: the partnership is valid. Therefore, Fred is incorrect
The fact that they did invest the money
5. In fact, the requirement for a partnership to be formed is the ‘’intention’’ to make
a profit, not necessarily to actually make a profit. Moreover, partnership can be
formed verbally and not necessarily to be in written form. In this case, both Fred
and Peter did invest the money, which showed that they did have the ‘’intention’’
to make a profit. Therefore, the partnership between Peter and Fred is valid and
Fred is incorrect.
11. Partnership Act 1958 (Vic), ss 32-34
Rule: partnership act
Provision 32, 33, 34
32. Duty of partners to render accounts etc.
33. Accountability of partners for private profits
34. Duty of partner not to compete with firm
Greg is required to account for
Bc he carries out the business separately but in the same nature
Relevant case
This case is about whether Greg is breaching his partnership agreement and required to
account for the profits under the Partnership Act. According to Partnership Act 1958
(Vic), ss 32-34, it is a partner’s duty to render accounts and not to compete with the
firm, along with making private profit is not eligible. In this case, Greg carries the
business separately but in the same nature. Therefore, Greg is breaching the
partnership agreement, and the profit earned from additional legal services belonged to
the mutual account of the law firm, not to Greg’s private account.
LAW OF CORPORATION
12. Proprietary vs Public companies
Proprietary:
Easier to form
Everyone can participate in the management
Joint stock company
Advantages:
Can raise capital from the public
Issue shares to the public
Disadvantages:
Higher requirements for formalities, meetings, and reports
More expensive to form
More procedure
Proprietary
Public
Number of members
No more than 50
No limit
Fundraising
Not permitted to raise
funds by offering or issuing
shares to the general
public
Can raise capital from the
public
Share issuing
Issue shares to the public