Describe- Students need to write detail about what they are being asked. This will usually include a definition and an outline of the details.

Transcription

1 2010 Business Law Revisin Bklet The Business Law final exam is 3 hurs with 10 minutes f reading time. HOW TO ANSWER CASE STUDY QUESTIONS When answering this questin student s need t fllw the frmat f: (i) state the issue (ii) state the law-this includes relevant legislatin and cases (iii) apply the law t the facts (iv) state the cnclusin Key wrds used in questins: Explain students need t prvide a definitin and give reasns in their answers. ie they must try t answer the questin why smething happens r give details f the cause f smething. An example will demnstrate understanding. Describe- Students need t write detail abut what they are being asked. This will usually include a definitin and an utline f the details. 1

2 Distinguish-Define and cmpare tw things shwing that are nt the same. Advantage- Students write abut the benefits r the gd things Disadvantage-Students write abut the csts r the bad things. Hw-Write abut the way smething happens. Example-Students prvide a case study r real life sample t help explain their answer. 2

3 Majr cncepts and definitins t knw and understand: Write a shrt definitin and include an example if pssible t shw understanding Tpics 1-4: Law Making Main surces f law in Australia-cmmn law and statute law Civil and criminal law Separatin f pwers Cncurrent law making pwers Exclusive law making pwers Residual law making pwers Sectin 109 f the Australian cnstitutin 3

4 Statutry Interpretatin Delegated legislatin Curt hierarchy state and federal curt system Precedent Rati decidendi Tpic 5: Business Structures Characteristics f a sle trader- advantages and disadvantages 4

5 Elements f partnership Features f a partnership Features f a cmpany- advantages Types f cmpany Tpic 6: Principal & Agent Agency defined Creatin f Agency 5

6 Authrity f an Agent Duties f an Agent Tpic 7: Trt Law Definitin and examples f Trt law Three requirements t prve negligence Defences t negligence Damages in negligence cases 6

7 Tpic 8: Cntract Law 6 elements f a simple cntract Express and implied cntracts Valid cntract Vid cntracts Vidable cntracts Terms in a cntract 7

8 Exclusin clauses in cntracts Remedies fr breach f cntract Tpic 12: Cnsumer Prtectin The Trade Practices Act 1974 Unfair practices Misleading and deceptive cnduct: Sectin52 8

9 Australian Cmpetitin and Cnsumer Cmmissin (ACCC) Cnditins implied int cnsumer cntracts by the Act. 9

10 Summary f Agency Law Definitin and features Principal Agent Third party Creatin and authrity f Agency Actual - Agent appinted-verbal r written Apparent - Persn gives the impressin they are the agent Case: Tth v Laws Implied - Psitin r circumstances f the persn indicate agency Ratificatin - Apprval by the principal after the agent has perfrmed an act Necessity Persn in cntrl f anther persn prperty An emergency r cmmercial necessity Impssible t cmmunicate with the wner f the prperty Agent must act in gd faith and the interests f the wner Case: Great Nrthern Railway v Swafield Duties f an agent Obey instructins Act in persn Act in the principal s best interest Nt make a secret prfit r secret cmmissin Take care f the prperty f the principal Keep separate and prper accunts Use reasnable skill and diligence Agents rights Remuneratin Reimbursement Lien Stppage in transit Types f Agents Special General Universal 10

11 Summary f Negligence Law Did the defendant we the plaintiff a duty f care? Freseeability Test Was it predictable that the defendant s cnduct culd injure r cause harm t the plaintiff? Vulnerability and cntrl test Was the defendant able t cntrl the plaintiff and was the defendant aware f this ability t cntrl? Did the plaintiff rely n the defendant? Was the defendant under a legal bligatin t prtect the interests f the plaintiff? Did the defendant breach the duty f care? The risk f injury must be reasnably freseeable The defendant must fail t d what a reasnable persn wuld have taken preventative measures against risk f harm. Likelihd that harm wuld ccur if care were nt taken Case: Bltn v Stne Likely seriusness f the harm Case: Paris v Stepney The burden f taking precautins t avid the risk f harm The benefit f the activity that creates the risk f harm. Did the plaintiff suffer damage? Plaintiff must prve that the breach f the duty was an effective cause f the damage. Did the defendant cause the harm? But fr the defendant s actin wuld the plaintiff have suffered damage?-is it apprpriate fr the defendant t be made liable? Remteness Is the damage caused t remte frm the defendant s act r missin t act? Defences t negligence Cntributry negligence Vluntary assumptin f risk Categries f negligence relevant t business Pure ecnmic lss Liability fr defective prducts. Case: Dnghue v Stevensn Case : Grant v Australian knitting Mills Negligent misstatement Case: Shaddck & Assciates v Parramatta City Cuncil Prfessinal negligence Vicarius liability (fr the cnduct f thers) Occupier liability Case: Australian Safeway Stres v Zaluzna Case: Hackshaw v Shaw Mtr vehicle accidents Damages 11

12 Special damages General damages Nminal damages Punitive damages Summary f Cntract Law Frmatin f a cntract Express cntracts-written, verbal Implied cntracts-by cnduct Classificatin f cntracts Valid-cntains 6 elements Vid- n cntract Vidable-can be repudiated by ne party Intentin t create legal relatins Scial and dmestic agreements n valid cntract, can be rebutted Case: Balfur v Balfur Case: Wakeling v Ripley Cmmercial and business agreements Agreement Offer rules Made in writing verbal r implied Invitatin t treat Case: Bts Cash Chemists case Offer t the wrld at large Case: Carlill v Carblic Smke Ball C Terms must be cmmunicated t the fferee Supply f infrmatin is nt an ffer Cnditins in the ffer must be fllwed Acceptance rules Acceptance must be certain Acceptance must be in reliance f the ffer Case: R v Clarke Acceptance must crrespnd exactly with the ffer Can be cmmunicated in writing, verbally r implied by cnduct An ffer can nly be accepted by the persn t whm the ffer was made Acceptance thrugh the pst given when the letter is psted Cnsideratin Exchange f mutual prmises Must be f sme value but it need nt be adequate Cnsideratin can be present and future but nt past Case: Rscrla V Thmas Capacity If there is n capacity then the cntract is vidable Minrs Cntracts fr necessaries Beneficial cntracts f service Peple affected by alchl r drugs Was the persn capable f understanding? 12

13 Was that persn s cnditin knwn by the ther party Bankrupts Cnsent Misrepresentatin Inncent misrepresentatin Fraudulent misrepresentatin Negligent misrepresentatin Mistake Unilateral mistake Mutual mistake Cmmn mistake Duress Undue influence Uncnscinable cnduct f the ther part Legality Crime r trt n a third party-n cntract Against public plicy-n cntract Terms and Representatins Representatins discussins befre the cntract Terms part f the cntract Express terms Cnditins essential term in the cntract Warranties minr imprtance t the cntract Implied terms By the curts By statute By usage r custm Exemptin clauses Limit r exclude the liability f a party fr damage r lss t anther party Cannt be used if there is misrepresentatin Cannt limit liability fr negligence Culd breach sectin 52 f the Trade Practices Act Terminatin f the cntract Perfrmance Agreement f the parties Operatin f the law Frustratin Breach f the cntract Actual breach bligatins nt perfrmed Anticipatry breach nt ging t perfrm in the future Remedies fr breach f cntract Recissin cancel the cntract if breached Damages General damage exact amunt nt certain 13

14 Special damage specified amunts Specific perfrmance curt directs a party t perfrm bligatins Injunctin curts stp a persn frm breaching a cntract r cmmitting a wrng act. Summary f actual case studies The facts f the case, the area f law and the decisin are given. Yu must give reasns fr a decisin in the exam. These case names can be used where relevant in yur exam t supprt yur answers. The decisins represent a precedent which will be used in ther cases where the legal principles (rati decidendi) are the same but the facts may be different. NEGLIGENCE Case law Case: Great Nrthern Railway v Swafield Facts: The plaintiff cmpany agreed t transprt the defendant s hrse t a particular railway statin. On arrival there was n ne t take pssessin f the hrse. The plaintiff cmpany sent the hrse t a cmmercial stable t be cared fr. The service required payment. Decisin: The curt held an agency f necessity had been created, and the wner f the hrse had t pay. The 4 cnditins f an agency f necessity had been met. Case: Tth V Laws Facts: The defendant had been the licensee f a htel. He allwed new wners t keep his name ver the dr even thugh he had sld the business. The new wners were supplied with beer by Tth and C. This cmpany sued the defendant fr the cst f the beer. Decisin:This a case f apparentcreatin f agency andapparent authrity f agency.the curt held that the defendant was liable and culd nt deny that the new wners were ding s as his agents because the sign n the dr held that the defendant was the principal. Case: Dnghue v Stevensn Facts: A ginger beer manufacturer sld a bttle f ginger beer t a retailer. It was sld t a custmer wh gave it t a friend t drink. The drink cntained a dead snail which had cme frm the manufacturer. The friend became ill and sued the manufacturer fr negligence. Decisin: The curt held that the manufacturer wed her a duty f care t make sure there was nthing in the drink that wuld cause harm even thugh there was n cntractual relatinship with the manufacturer. The defendant was negligent and liable t pay cmpensatin. The manufacturer is liable fr defective prducts. The 3 cnditins fr negligence had been created by the curt in this decisin. Case : Grant v Australian knitting Mills Facts: The plaintiff had bught sme underwear frm a shp. It was cntaminated with a chemical that caused him t develp a severe rash. The plaintiff sued the shp as well as the manufacturer. Decisin: The curt held that the manufacturer was liable fr defective prducts and wed a duty f care which was breached. The 3 cnditins fr negligence were invlved in this case. Case: Bltn v Stne 14

15 Facts:The plaintiff was struck by a cricket ball that was hit frm a cricket grund while a cricket match was being played. The ball passed ver a fence and struck him. Decisin: The curt held that the defendant liable fr damages caused by a ball struck ut f the grund ver a high fence. There was nly a slight pssibility f harm. The ball ging ut f the grund was a very rare event. A reasnable persn wuld ignre any risk f being hit.duty f care was nt breached. Case: Paris v Stepney Brugh Cuncil Facts:The plaintiff was emplyed by the defendant cuncil. He had sight in nly ne eye. The emplyer knew this but failed t supply prtective glasses fr wrk the defendant was ding where there was a risk f injury. The plaintiff suffered an accident while wrking and lst the sight in his gd eye. Decisin: If an emplyer knws that the plaintiff is suffering frm a disability that wuld increase the gravity f injury, shuld an injury ccur, then precautins need t be taken t avid injury. Duty f care was breached because precautins were nt taken due t the gravity f the pssible injury. Case: Shaddck & Assciates v Parramatta City C Facts: A slicitr, acting n behalf f Shaddck, cntacted the Parramatta Cuncil t ask if a prperty was affected by a rad widening prpsal. The cuncil emplyees issued a frm and made ther statements that wrngly shwed the prperty was nt affected. Shaddck later purchased the prperty and suffered lsses when rad widening tk place. He sued the cuncil fr negligent misstatement. Decisin: Shaddck received cmpensatin. The curt held that the cuncil gave infrmatin t a persn whm they knew wuld rely upn it and they were under a duty f care t make sure the infrmatin was crrect. Case: Australian Safeway Stres v Zaluzna Facts: The plaintiff, a shpper, slipped n the tiled flr f a Safeway supermarket n a wet mrning. Decisin: This is the standard f care wed by an ccupier f premises t thse entering the premises. The curt said that the plaintiff was a lawful entrant t the shp and that the defendant wed a duty f care t avid the risk f injury t all persns entering the premises. The duty was breached. Case: Hackshaw v Shaw Facts: A farmer sht at a car which was n his prperty. A persn in the car was stealing petrl and the reasn fr the shting was t stp the car. It was dark and the thief was standing next t the car. A passenger in the car was hit by a bullet and injured. Decisin: This is abut ccupier liability and their duty f care. The farmer was held t be liable fr negligence t the passenger. Shting at the car created a danger f injuring a persn in the vehicle, which wuld have been reasnably freseen by the farmer. CONTRACT Case Law Case: Balfur v Balfur Facts: The defendant was a civil servant wrking in Ceyln (Sri Lanka). When he was hme n leave in England, it was agreed his wife wuld remain in England while he wuld return t Ceyln and he prmised t pay her mney each mnth fr living expenses. The defendant breached this agreement and his wife sued him, alleging breach f cntract. Decisin: The curt held that there was n intentin t create legal relatins due it being a dmestic agreement. There was n cntract. Case: Wakeling v Ripley 15

16 Facts: Ripley was a bachelr wh lived in Sydney. The plaintiffs were Ripley s sister and her husband, wh was a university lecturer in England. Ripley tried t cnvince his sister t mve t Australia. He prmised t give a hme and living if they mved t Australia. And that he wuld leave all prperty t his sister n his death. The sister and her husband agreed. They sld their huse and the husband resigned frm his jb. After being in Australia fr a year, the parties had a serius fight and Ripley sld his huse and cut the sister ut f his will. The plaintiffs sued fr breach f cntract. Decisin: The curt held there was intentin t create legal relatins despite the fact it was made between family members. The plaintiffs had sacrificed a lt by leaving a jb and mving t Australia. Therefre they culd sue fr a breach f cntract. Case: Bts Cash Chemists case Facts:Bts chemists pened up a self service chemist shp. Custmers culd chse medicines and take them t the cash register. Previusly medicines were always kept behind the cunter. The pharmaceutical sciety argued that the display f medicines was an ffer that was accepted when the custmer selected ne f them. This was befre they culd be checked by the pharmacist. They argued that this breached regulatins saying that medicines need t be checked by the pharmacist. Decisin: Gds n display were an invitatin t treat. An ffer is made when the custmer takes the gds t the pharmacist fr checking and then t the register fr payment. Case: Carlill v Carblic Smke Ball C Facts: An advertisement was placed in several magazines ffering a sum f mney t any reader wh cntracted a cld r flu frm using the cmpany s carblic smke ball three times a day fr tw weeks. The ffer was made t anyne reading the advertisement. Decisin: The curt held this was an ffer t the wrld at large and that the plaintiff had a right t claim the mney as she had accepted the ffer. Case: R v Clarke Facts: A reward was ffered fr infrmatin leading t the arrest and cnvictin f persns respnsible fr the murder f tw plicemen. On June 6 tw persns X and Y were arrested and charged with murder f the plicemen. On June 10 Y gave evidence leading t the cnvictin f X and anther persn Z. fr the murders. Y was released and claimed the reward. Decisin: The curt fund that Y had nly prduced infrmatin t the plice in rder t escape the murder charge. Y did nt accept in reliance f the ffer when he gave infrmatin s there was n acceptance f the ffer f a reward. He culd nt claim the reward. Case: Rscrla V Thmas Facts:Rscrla purchased a hrse frm Thmas. After the cntract was cmpleted, Rscrla demanded a prmise frm Thmas that the hrse was healthy. The prmise was given and later it was fund that the hrse was sick. Rscrla sued fr breach f cntract. Decisin: There was n cnsideratin because the cntract had already been cmpleted befre the prmise was made. Therefre it was past cnsideratin. There was n breach f cntract because the prmise was nt a valid cnsideratin 16

17 Sample Revisin Questins Sectin A This sectin cnsists f 20 multiple chice questins. Advice In the 10 minutes reading time, students can decide mst answers and answer questins quickly when the writing begins. Students chse the best answer. If they dn t knw an answer they shuld eliminate stupid answers that are definitely wrng and by a prcess f eliminatin they will be left with the crrect answer. If students can t d a questin they shuld leave it and cme back t it befre cmpleting the exam. Multiple Chice questins. 1. A key feature f a partnership is: (a) mutual agency (b) limited liability (c) separate legal entity (d) all f the abve 2. Negligence is : (a) a criminal wrng (b) an ffence punishable by imprisnment and/r a fine (c) an ffence punishable by imprisnment (d) a civil wrng 3. Exemptin clauses are used in cntracts t: (a) limit liability (b) exclude liability (c) increase liability (d) limit r exclude liability 4. In an agency there are: (a) tw main parties (b) fur main parties (c) three main parties (d) five main parties 17

18 5.. A business established t carry ut a single nce-nly prject is likely t be a: (a) partnership (b) jint venture (c) sle trader (d) cmpany Sectin B This sectin has 10 shrt answer questins, each wrth 2 marks fr a ttal f 20 marks. Advice T distinguish between tw things means t find the differences between them. A gd wrd t use when distinguishing cncepts is whereas. This allws yu t cnnect the tw cncepts in ne sentence and shw the difference between the tw. eg. Questin: Distinguish between a lease f land and a licence t use land. Answer: A lease gives smene exclusive pssessin and use f the land whereas a licence des nt allw exclusive pssessin f the land. In sme cases the differences are bvius frm prviding the basic definitins but try t shw any differences between the cncepts in yur answers. 1. Distinguish between cmmn law and statute law 2. Distinguish between a binding precedent and a persuasive precedent. 3. Distinguish between actual authrity and apparent authrity. 4. Explain the difference between vicarius liability and ccupier s liability. 18

19 5. Distinguish between inncent misrepresentatin and negligent misrepresentatin. Case Study Questins Advice Fllw the frmula when answering case study questins in Sectin C. 1. State the issue 2. State the law- include relevant case law. 3. Apply the law t the facts 4. State the cnclusin Sample Case study questin and answer Lizzie wh is aged 16 years enters an apprenticeship agreement with Bb s pies Pty Ltd. She is training t be a baker. The apprenticeship is t last ne year. During that time she will learn all aspects f bread making. She is given an allwance f $30 per week, free accmmdatin and meals. She must wrk 10 hurs a day, 6 days a week and must get permissin frm her emplyer if she wishes t g ut at night. She decides t leave the apprenticeship. The wners f Bb s pies Pty Ltd are angry and want t sue Lizzie fr breach f cntract. Advise Bb s pies Pty Ltd. 1. The issue here is whether there is a valid cntract r nt. It cncerns the capacity t cntract and whether there is an enfrceable cntract between Lizzie and Bb s pies Pty Ltd. 2. The area f law is t d with cntracts fr minrs that are beneficial cntracts fr Service. Minrs can enter int cntracts where there is sme benefit fr service. If there is a benefit the cntract will be enfrceable. Include a relevant case study by name. (inthis answer there isn t ne we use but in ther case questins there is usually a case yu can mentin) 3. There is a cntract fr service as this is an apprenticeship agreement. But is it a beneficial agreement? The advantages are learning abut bread making, free accmmdatin and meals. Hwever the mney is pr, hurs f wrk are harsh and the need fr permissin is harsh and unrelated t her duties. Disadvantages ut weigh the advantages. 4. This is nt a beneficial cntract f service. There is n breach f cntract and she is free t leave. 19

20 1. Sally while walking past K-Mart sptted a dress in the windw priced at $9. She walked int the shp and intended t buy the dress. The shp assistant tld her it was a mistake. The price shuld be $90. Advice Sally f her rights. 2. Aarn returns a lst cat t its wner. The cat was in his backyard and had a tag shwing its name and address. While walking hme, Aarn sees a reward fr the cat n a pwer ple. Is Aarn entitled t the reward? Why r why nt? 20

21 3. Angie was very drunk when she barded a tram in Melburne. She demanded a ticket t nwhere. The cnductr reeled at the breath and sld her a mnthly unlimited travel pass fr $200. She gt ff the tram tw stps later. The fllwing mrning Angie fund the pass and culd remember the incident. She never uses trams nrmally and desn t want the ticket. What can Angie d? 4. Dunstan and Jenkin entered int a cntract whereby Jenkin was t lad grain in an Italian prt. War was suddenly and unexpectedly declared between Australia and Italy prir t the perfrming f the cntract, which meant that Jenkin wuld be invlved in trading with an enemy natin. When he refused t d s, Dunstan sued fr breach f cntract. Wuld he be successful? Why/Why nt? 21

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