MCD2070 BUSINESS LAW MOCK EXAM – TRIMESTER 3/2011 NOTE: This is a guideline only, and does not providea model answer to the questions QUESTION 1 Part a Overall issue: Can Gam Le’s client sue Gam Le for negligent advice causing for his share of the losses? Sub-issue 1 Does Gam Le owe his client a duty of care? - Apply the test of a special relationship in Shaddock & Associates Pty Ltd v Parramatta City Council (i) The subject matter of the advice must be of a business or serious nature (ii) Gam Le must know that it is being trusted by his client to give information (iii) Gam Le must realise that his client will act on his advice (iv) It must be reasonable for Gam Le’s client to act on the advice Apply law to the facts Sub-conclusion – Draw a conclusion about whether Gam Le owes his client a duty of care Sub-issue 2 Has Gam Le breached the duty of care owed to his client? - State the standard of care required of Gam Le in the circumstances Apply the weighing test from Wyong Shire Council v Shirt (i) (ii) Was the magnitude of the risk high? Was there a high probability of risk? Weighed against the following factors (iii) (iv) How difficult, expensive or inconvenient it would have been for Gam Le to remove the risk? Were there any conflicting duties upon the defendant Apply law to the facts Sub-conclusion – Draw a conclusion about whether Gam Le breached his duty of care by failing to exercise a reasonable standard of care Sub-issue 3 Did Gam Le breach of the duty of care cause the loss suffered by his client and were the losses reasonably foreseeable? - Did Gam Le’s breach directly cause the damage suffered by his client? MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 1 (causation) Apply the ‘but for’ test Chapel v Hart - Were the damages suffered by Gam Le’s client reasonably foreseeable and not too remote? (remoteness) Apply the objective test of reasonable foreseeability Kenny & Good Pty Ltd v MGICA Ltd. Kenny & Good Pty Ltd v MGICA (ii) Voluntary assumption of risk – Did Gam Le’s client consent to the risk in the circumstances? Moore v Woodforth (iii) Disclaimer – Did Gam Le issue a disclaimer? Hedley Byrne v Heller Apply law to the facts Sub-conclusion – Draw a conclusion as to whether any defences apply Overall conclusion: State whether Gam Le’s client would be likely to succeed in his action for negligent misstatement against Gam Le. 1 & 2) Apply law to the facts Sub-conclusion – Draw a conclusion about causation and remoteness Sub-issue 4 Can Gam Le argue a valid defence? (i) Contributory negligence – Was Gam Le’s client partially responsible for his losses? March v Stramare. OR group. Overseas Tankship (UK) Ltd v Mort’s Dock and Engineering Co. (iii) If balancing up the following factors indicated that the relationship MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 2 . QUESTION 1 Part b Overall issue: Can the other members of the group sue Gam Le for negligent advice causing for their losses? Sub-issue 1 Does Gam Le owe the other members of the group a duty of care? - Apply the tests in the cases of: R Lowe Lippman Figdor & Franck v AGC (Advances) Ltd (1992) Esanda Finance Corp v Peat Marwick Hungerfords (1997) and Kenny & Good Pty Ltd v MGICA (1992) It is likely that a duty of care is owed to the other members of the group: (i) If Gam Le assume responsibility for the risk of the other members of the OR (ii) If Gam Le induced the other members of the group to act/rely on the information/advice. Ltd (The Wagon Mound No. expensive or inconvenient it would have been for Gam Le to remove the risk? Were there any conflicting duties upon the defendant Apply law to the facts Sub-conclusion – Draw a conclusion about whether Gam Le breached his duty of care by failing to exercise a reasonable standard of care Sub-issue 3 Did Gam Le breach of the duty of care cause the losses suffered by the other members of the group and were the losses reasonably foreseeable? - Did Gam Le’s breach directly cause the damage suffered by the other members of the group? (causation) Apply the ‘but for’ test Chapel v Hart Were the damages suffered by Gam Le’s client reasonably foreseeable and not too remote? (remoteness) Apply the objective test of reasonable foreseeability Overseas Tankship (UK) Ltd v Mort’s Dock and Engineering Co.(a) (b) (c) (d) between the other members of the group and Gam Le was sufficiently close to impose a duty of care: Was Gam Le aware that the information/advice would be passed on to the other members of the group (or a class of persons to which the other members of the group belong)? Did the Gam Le know that the other members of the group (or class of persons to which the other members of the group belong) were likely to rely on the information/advice? Was the other members of the group’s reliance on the information/advice reasonable? The existence of a disclaimer and. Ltd (The Wagon Mound No. Apply law to the facts Sub-conclusion – Draw a conclusion about whether Gam Le owes the other members of the group a duty of care Sub-issue 2 Has Gam Le breached the duty of care owed to the other members of the group? - State the standard of care required of Gam Le in the circumstances Apply the weighing test from Wyong Shire Council v Shirt (v) (vi) Was the magnitude of the risk high? Was there a high probability of risk? Weighed against the following factors (vii) (viii) How difficult. if one existed. 1 & 2) - Apply law to the facts Sub-conclusion – Draw a conclusion about causation and remoteness MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 3 . its nature and prominence. An offer exists only where a reasonable person would conclude on the facts that the person was willing to be bound in a court of law Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 2 MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 4 . Kenny & Good Pty Ltd v MGICA (v) Voluntary assumption of risk – Did the other members of the group consent to the risk in the circumstances? Moore v Woodforth (vi) Disclaimer – Did Gam Le issue a disclaimer? Hedley Byrne v Heller Apply law to the facts Sub-conclusion – Draw a conclusion as to whether any defences apply Overall conclusion: State whether the other members of the group would be likely to succeed in their action for negligent misstatement against Gam Le. QUESTION 2 (a) Overall issue: Have Carmen and Aida entered into a contract for the sale of the car? Sub-issue 1 Is the advertisement placed by Carmen in the newspaper an invitation to treat? An invitation to treat is an invitation to others to make an offer Advertisements placed in the media generally amount to an invitation to treat Patridge v Crittenden Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 1 Sub-issue 2 Does Aida’s phone call to Carmen on 11 October constitute an offer? An offer indicates a willingness by the offeror to be bound on certain terms.Sub-issue 4 Can Gam Le argue a valid defence? (iv) Contributory negligence – Were the other members of the group partially responsible for his losses? March v Stramare. The offeree must have provided consideration to keep the offer open Routledge v Grant Where consideration is provided the option cannot be revoked Goldsborough Mort & Co Ltd v Quinn Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 4 Sub-issue 5 Does Aida accept Carmen’s offer when she posts the letter of acceptance on 17 October? The postal rule is an exception to the principle that acceptance must be communicated. electronic communication (such) as email is received when it enters an information system designated by the addressee as the system for the receipt of electronic communications or. when it comes to the attention of the addressee. Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 6 MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 5 . The postal rule applies where the parties have contemplated the post as the means of communication by the parties Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd Acceptance will have taken place and will be deemed to have been completed the moment that the letter of acceptance has been posted Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 5 Sub-issue 6 Is Carmen’s email to Aida on 16 October an effective revocation? The general rule is that revocation of an offer may occur at any time prior to acceptance Routledge v Grant The Electronic Transactions Act 1999 (Cth) states that unless there is an agreement between the parties to the contrary.Sub-issue 3 Is Carmen’s reply that $28.000 is the minimum price she would accept a counter offer An offer is rejected by the offeree making a counter offer Hyde v Wrench A counter offer is a response that indicates a willingness to contract but on a different basis from the offer Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 3 Sub-issue 4 Does Carmen’s reply that ‘my offer is good until 18 October’ constitute an option? An option is a promise to keep an offer open for a specified period. if no system is designated. Was the oral statement included in the contract? MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 6 . Sub-issue 2: Is Bob’s oral statement a term of the contract or a representation? Relevant Law: Apply the reasonable bystander test Oscar Chess Ltd v Williams . family and social agreements do not intend to create legal relations Balfour v Balfour The presumption can be rebutted if one of the parties produces sufficient factual evidence showing a contrary intention Todd v Nicol The question to be considered is whether a reasonable person would have concluded that the parties intended to be legally bound Ermogenous v Greek Orthodox Community of SA Inc Apply above law and draw a conclusion as to whether or not the parties intended to contract QUESTION 3 (a) Overall issue: Does Elenora have any contractual and statutory rights against Boom Properties Ltd in relation to the purchase of the land? • Contractual rights: Can Elizabeth argue that Boom Properties Ltd has breached any express terms of the contract? Sub-issue 1: Does the parol evidence rule apply? Can Elizabeth rebut the parol evidence rule? Relevant Law: If there is a written contract then that is the entire contract between the parties and any oral promises are excluded from the contract British Movietone News v London & District Cinemas Ltd Exceptions: (i) (ii) Written contract is not a complete record of the agreement The contract is affected by misrepresentation or fraud Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 1. QUESTION 2 (b) Issue: Is there a valid contract between Michael and Patricia and Gerald? Is there an intention to contract between the parties? Relevant Law: The law presumes that parties to domestic.Overall conclusion: State whether Carmen and Aida have entered into a valid contract for the sale of the car. Gates v City Mutual Life Assurance Society Ltd Separate consideration must have been provided for the promise collateral (3) Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 3 Sub-issue 4: What remedies are available to Elizabeth? Relevant Law: Condition or warranty? Associated Newspapers v Bancks Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 4 • Contractual rights: Draw a conclusion as to whether Elizabeth can successfully argue that Boom Properties Ltd has breached any express terms of the contract • Statutory rights: Can Elizabeth argue that Boom Properties Ltd has breached s 52 of the Trade Practices Act 1974 (Cth)? Relevant Law: ‘A corporation shall not. in trade or commerce. engage in conduct that is MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 7 . could Elizabeth argue successfully that a collateral contract existed? De Lassalle v Guildford Relevant Law: (1) and to Blakney written (2) An oral statement was made that was intended as a promise induce the main contract J J Savage and Sons Pty Ltd v The oral statement must not be inconsistent with the main contract Hoyt’s Pty Ltd v Spencer.- - At what stage in negotiations was the oral statement made? Van Den Esschert v Chappell Was the oral statement promissory? How important was the statement to the overall deal? Oscar Chess Ltd v Williams Did one part rely on the special knowledge of the other party Esso Petroleum Co Ltd v Mardon Apply law to the facts Sub-conclusion Draw a conclusion that answers sub-issue 2 Sub-issue 3: If the parol evidence rule does apply. Apply law to the facts Sub-conclusion – Draw a conclusion as to whether there is a legally effective exclusion/limitation clause. household or domestic use and it is reasonable to allow. Liability can be limited to repair or replacement of the good.Misleading or deceptive or likely to mislead or deceive QUESTION 3 (b) Overall issue: Can Mary sue R Pty Ltd for breach of any implied terms under statute? Sub-issue 1: Does the scenario fit the threshold requirements under the Trade Practices Act 1974 (Cth)? Relevant Law: (i) Was the seller subject to the TPA? (ii) Was the buyer a consumer within s 4B of the TPA? (ii) Was the sale made in the course of business? (iii) Was the sale made at auction? (iv) Were the goods being purchased for re-supply or for use in production/manufacture? Apply law to the facts Sub-conclusion – Draw a conclusion as to whether the threshold requirements are met.Seller can take advantage of a limitation clause if the goods are not of a type normally acquired for personal. Sub-issue 3: Has there been a breach of s71(1) and/or s71(2) of the Trade Practices Act 1974 (Cth)? Relevant Law: (i) Has there been a breach of the implied term that the goods be of merchantable quality? – s71(1) TPA? (ii) Has there been a breach of the implied term that the goods be fit for their particular purpose? – s71(2) TPA? Apply law to the facts Sub-conclusion – Draw a conclusion as to whether there was a breach of an implied term set out in s71(1) or s71(2) TPA. Sub-issue 4: What remedies would be available for breach of an implied term under the Trade Practices Act 1974 (Cth)? Relevant Law: (i) Are damages available under s 82 TPA? MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 8 . s68A TPA . Sub-issue 2: Was there an exclusion / limitation clause? Relevant Law: s68 Trade Practices Act 1974 (Cth) Terms implied by TPA cannot be excluded. Overall conclusion: breach of any State whether Mary can sue R Pty Ltd for a implied terms under statute. MCD2070 Guidelines mock exam trimester 2_2010-09-08Page 9 .(ii) Could the goods be returned under s75A TPA? Sub-conclusion – Draw a conclusion as to the likely remedy available.