(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW Page 1 of 5 School of Business EXAMINATION (1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW Examination Duration: 180 minutes Total Marks: 50 Reading...

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(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW
Page 1 of 5
School of Business
(1520) Semester 2, 2015
Examination Duration: 180 minutes Total Marks: 50
Reading Time: 10 minutes
Exam Conditions:
This is a THEORY examination
This is an OPEN BOOK examination.
Materials Permitted In The Exam Venue:
Normal writing materials
Printed or written materials (except li
ary books) are permitted.
Electronic devices are not permitted.
Materials To Be Supplied To Students:
2 x FedUni Standard Answer Booklet
Instructions To Students:
This exam comprises 50 marks in total.

You must answer all FIVE questions. Each question is worth 10 marks.
Student Number __ __ __ __ __ __ __ __
Family Name _______________________
First Name _______________________
1. Do not detach any
portion of the
examination paper.
2. Listen for all
instructions from
venue supervisors.
3. Do not begin writing
until reading time has
4. Ensure that you print
your name and
student number on all
exam papers, answer
ooklets and multiple
choice sheets.
(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW
Page 2 of 5
(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW
Page 3 of 5
Question 1 – Business structures and relationships
Answer all of (a), (b), (c), (d) and (e).
(a) What is meant in law when someone acts as the ‘agent’ for a principal
when contracting with a third party? What duties does the agent owe, and
to whom are those duties owed? (2 marks)

(b) Abdul is Peter’s agent. Abdul, acting outside the scope of his actual
authority but representing himself to be Peter’s agent, enters into a
contract with Colin. Using at least one case authority, on what basis might
Peter be bound in the contract with Colin? (2 marks)

(c) Max, Asgar and Fatima are in practice together as an unincorporated firm
of accountants. What is the nature of the legal relationship between the
three accountants? Explain whether or not the firm is a separate legal
person? (2 marks)

(d) In what ways is the relationship between a trustee and beneficiaries similar
to the relationship between a company director and shareholders? (2

(e) Briefly explain whether or not each of the following is recognised as a
separate legal person:

(i) a joint venture;
(ii) a company;
(iii) a franchise;
(iv) a person in business as a sole trader? (2 marks)
(10 marks in total)
Question 2 – Contract law
Based on the following scenario, answer the questions below refe
ing only
to the general law, both common law and equity. Do not refer to statute law.
Mark offers specialist business consulting services for which his advertised fee
is $200 per hour. Gina, the sole director, shareholder and employee of GTX
Pty Ltd, emailed Mark and asked whether he would be willing to supply his
services to GTX at $150 per hour. Mark emailed back offering a rate of $180
per hour. Gina replied by email that the most GTX could afford is $160 per
hour. Mark sent an emailed reply stating that he could go no lower than $170
per hour. Gina sent no reply to this. However, today Mark commenced
supplying his services to GTX.
Explain your view on whether or not Mark has entered into any contract. If not,
why not? If you conclude that Mark has entered into a contract, with whom
has he entered the contract, at what rate and when was the contract formed?
(10 marks)
(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW
Page 4 of 5
Question 3 – Contract law
Answer all of (a)-(e) refe
ing only to the general law, both common law
and equity. Do not refer to statute law.

(i) “All contracts must be in writing to be valid.” Explain your view on
whether this statement is co
ect.(2 marks)

(ii) In contract law, what is the difference between duress and
unconscionable conduct? (2 marks)

(iii) In contract law, what is the difference between rescission and
termination? (2 marks)

(iv) What does it mean in law to say that a contract has been
“frustrated”? (2 marks)

(v) Today Mandy
eaches an essential term of her contract with Luke
and the
each causes Luke to suffer financial loss. What are
Luke’s likely remedies in contract law? (2 marks)
(10 marks in total)
Question 4 – Sale of Goods
(a) Leo Pty Ltd manufactures and delivers dog and cat vaccines to animal
hospitals and clinics. The vaccines need to be transported and stored at
etween 0 to 4 degrees Celsius to remain effective. A consignment of
vaccines ordered by the Lakeland Animal Clinic (by reference to the
vaccines’ product codes) is ruined during a delivery due to failure of the
efrigerated delivery van’s thermostat. The contract of sale is silent on
the question of when property in the vaccines passes.

Outline the operation of the statutory provisions governing the sale of
goods that are relevant to this scenario. In particular, explain who
owned the vaccines at the time they were ruined? (5 marks)

(b) In property law what is the doctrine of nemo dat quod non habet? In
what ways does sale of goods legislation create exceptions to that
doctrine? (5 marks)
(10 marks in total)
(1520) Semester 2, 2015 BULAW5914 COMMERCIAL LAW
Page 5 of 5
Question 5 – Bankruptcy law
In your answer consider all the (a)-(e) transactions below.
Over the past two years Frank has experienced financial difficulties and he is
ently being pursued by creditors. Frank owes over $800,000 to 10 different
creditors, including Expert Credit which holds a properly registered personal
property security interest over Frank’s boat. His creditors successfully petition for
Frank’s bankruptcy, after Frank’s failure to satisfy a valid bankruptcy notice.
In the period from the week before the day that the bankruptcy notice was served
on him to the date that the petition is accepted by the Federal Court, Frank:
(a) Sells his camper van valued at $20,000 to Linda his daughter for $5,000.
(2 marks)
(b) Sells his boat at fair market value to a stranger, Leo, who responded to an
online advertisement placed by Frank. (2 marks)
(c) Pays off a $20,000 personal loan that he owed to his long standing friend
Jessica. (2 marks)
(d) Transfers by gift (under a valid deed) the legal title of his house to his wife,
Beth. (2 marks)
(e) Gifts to George his father (by handing over physical possession) some low
value chattel property of high sentimental value. (2 marks)
Explain if the transactions (a)-(e) mentioned above will be enforceable against
Frank’s trustee-in-bankruptcy or his creditors under the Bankruptcy Act 1966
(Cth). (10 marks in total, comprising 2 marks for each transaction)
XXXXXXXXXXmarks in total)
Answered Same DayOct 02, 2021BULAW5914


Preeti answered on Oct 06 2021
51 Votes
Law Questions
Question 1: Business structure and relationship
a) When someone acts as agent for a principal while contracting with third party, it is understood as ‘contract of agency’. Agents owe certain duties towards principal and customers as well. These duties include acting within the scope of authority, adhering with the directions and instructions of principal, acting with reasonable skill and diligence, disclosing material information to the principle, and, not disclosing any confidential information of the principal to the customers (Busch, Macgregor & Watts, 2016).
) In the underlying case, Abdul used apparent or estoppel authority leading third person or party to rely on such representation to deal and accept agent’s authority. Peter has by his words, behaviour or act led Colin believing that Abdul is his agent and is authorised to enter into contract with third person on his behalf.
c) Unincorporated companies are not considered as having legally separate and distinct identity from their owners. It is quite easy to establish unincorporated companies as it takes no effort and no complexities. In an unincorporated corporation, Max, Asgar and Fatima act as general partners sharing business losses, profits and management duties with each other (Bennett, 2014).
d) Relationship between trustee and beneficiary is understood as similar to the relationship between a company director and shareholders. Trustees enjoy fiduciary relationship with the trust’s beneficiaries. They assume responsibility of taking good care of the property owned by the trust and kept for the beneficiary. There exist relationship of trust and confidence between trustee and beneficiary, and, trustee can be held responsible for
eaching this relationship of trust and confidence. The company director and shareholders also enjoys same nature relationship of trust with each other. Both company director and shareholders are responsible for acting in continuum of trust towards each other, shareholders and directors can be held responsible for
each of this relationship and compensating each other.
e) Joint venture is not a legal entity, it operate through the existing legal status of partners and co-ventures. As Joint venture is not a legal entity, it is not allowed to enter into contracts, hiring employees and assuming tax liabilities. All these activities and obligations should be handled by co-ventures or governed by the contract law (Macgregor, 2013).
A company is a legal entity under the provisions of the Companies Act. It can act as an artificial legal person having separate identity from members, officers and employees. A company can enter into contract on its name, and, can hire personnel, assumes tax responsibility and other obligations.
A franchise is not a legal entity but it is business model that can operate under several legal structures such as sole trader, limited company, and business partnership. Franchise operates through agreements depicting how the franchised business should be run, right and obligations of the franchisor, and, relationship between franchisor and franchisee (Munday, 2010).
A sole trade is a type of business format in which there is no legal distinction between owner and business entity. All profits, losses and debts are bear by the proprietor, and, is entitled to employ or hire other people.
Question 2:
As per the provisions of contract law, a valid contract is ‘an agreement between the two or more parties who have clearly created and defined the obligations’. In order to form a valid contract, process of proposal should happen and occur in formal and detailed manner. It means proposal or offer should be made by one party and accepted by other party. This involves a process of negotiation asking parties to use their intelligence and creative ability to make offer and acceptance and forming a valid contract (M. A. Clarke, R. J. A. Hooley, et.al. 2017).
In the underlying case scenario, proposal given or made by GTX Pty Ltd to Mark, offering specialist business consulting services, is not accepted in absolute and qualified terms. The process of negotiation took place between the parties where Mark offers advertised...

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