Law00150: Introduction To Business Assessment Answer

Assignment Task:

Question 1 

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 support 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.

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. 

Question  2 

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 support your decision.

1. John cleans his next door neighbour 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.

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.

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

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.

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 the Saturday so he offers Dale an additional $200 if she does the agreed job on Friday.

Question  3 

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.

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

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.

Question 4 

Grant sells second hand motor vehicles from his Sydney car yard. Grant enters into a contract with 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 injurious act caused by an employee of the company unless such 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) 

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

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

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) 

Question 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) 

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

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

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.

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