NOTE SUMMARY KEY IDEAS

Chapter 1 (nhớ là ko có thi luật Việt Nam, tập trung vào chap 5 trở đi)

• Sources of law: sources of law in Australia do not include repealed statutes. Includes: 1.
Consolidating statutes, 2. judge-made law, and 3. equity. (có 3 nguồn Law nhe)
• Which are some of the main features of the Electronic Transactions Act 1999 (Cth): are
the validity of electronic transactions, recognition of writing by electronic means, and
recognition of retaining information in electronic form.
• The doctrine of precedent: With respect to a case being decided under the appellate
jurisdiction of the Country Court of Victory, a decision of the appellate division of the
District Court of New South Wales on the same Commonwealth legislation is persuasive.
• Extrinsic Materials: Which of the following is NOT an example of an extrinsic source of
material? The internet. An extrinsic source: 1. Law reform commission reports, 2.
Parliamentary Committee reports, and 3. Parliamentary Debates.
• Simon and Stella, both of full legal capacity, agree to go on a date. Stella is to pay for the
dinner, but she is running late and does not meet Simon at all. Simon is embarrassed
and angry and calls Stella the next day to threaten to sue her for his taxi fares and
dinner expenses. Will Simon succeed in his claim? No, because Simon and Stella did not
intend the agreement to create legally enforceable obligations.
• Which of the following statements about consideration is correct? Consideration need
not be adequate.
• The rule of law: Which of the following concepts is closely related to the rule of law?
The due process. Not closely related: 1. Representative government, 2. a responsible
government, and 3. separation of powers.

• In Crown Melbourne Ltd v • Which of the following is not a

Cosmopolitan Hotel (Vic) Pty Ltd way in which an offer can be
[[2016]] HCA 26 why did the High terminated? Revocation after
Court disagree with the decision of acceptance has been mailed
the Victorian Court of Appeal in where the postal rule applies.
finding there was no case for True: Lapse, revocation before
promissory estoppel: acceptance, or lapse where no
o The plaintiff could not time was stipulated.
establish that the
statement that it would be
“looked after at renewal
time” was capable of
conveying to a reasonable
person that it was a
genuine offer of a further
lease, and
 o There was a need for
certainty as to what the
parties had agreed on at
the end of the
negotiations to find a
claim for estoppel.

• Delegated legislation: Which of • Section 51 powers: Which of the

the following is not correct? following is not an area that the
Delegated legislation can only be Commonwealth Parliament has
made by Government Ministers. the power to legislate on under
Correct: 1. Delegated legislation is s51 of the Commonwealth
subordinate legislation, 2. is made constitution? Education. Has
under the authority of an Act of power over 1. bankruptcy and
Parliament, and 3. often contains insolvency, 2. foreign
more detailed rules than those of corporations, and 3. banking and
the associated Act. insurance.

• Interpretation-extrinsic materials: In interpretation, extrinsic materials are allowed to

be referred to by a court.
• Ratio decidendi: The ratio decidendi of a case is the reason given for deciding the case.
• Illusory terms in a contract are problematic since they are vague or ambiguous so they
fail to create a legal obligation.
• Native title: Native title was first recognised in the case of Mabo v State of Queensland
(No 2)(1992) 175 CLR 1.
• Changing the Constitution: Section 128 of the Commonwealth Constitution provides
that the Constitution can be changed by referendum that requires a “yes” vote by the
majority of voters and in a majority of States.
• The main legal issue in Felthouse v Bindley (1862) 11CB (NS) 869 was generally silence/
lack of action does not constitute acceptance of an offer.
• Which of the following is not a class of persons regarded by the law as wholly or partly
incapable of entering into legally binding contracts? Women.
• Reporting obligations: What is a binding precedent? A decision of a court that brings
judges in a lower court in the same court hierarchy.
• Separation of powers: Which of the following is not one of the three branches of the
Commonwealth government in Australia: The Governor. The three branches are 1. the
executive, 2. the judiciary, and 3. the legislative.
• Criminal offences: Which of the following is incorrect with respect to criminal offences?
The committal hearing is held before most summary offense matters. Correct. Criminal
offenses are indictable offenses are generally the more serious offenses, summary
offenses are determined by a magistrate without a jury, and the prosecution must prove
its case beyond a reasonable doubt.
• Australian Constitution: Which Act established the federal legal and political system and
converted the separate colonies into states? Commonwealth of Australia Constitution
Act 1900.
• Public and private law: Which of the following is not classified as private law? Criminal
law (public law). Private law: 1. The law of contract, 2. the law of property, and 3. the
corporations law.
• Farah agreed to take care of an elderly woman Marge and in return was provided with a
house to live in that was promised by Marge to be Farah’s after she died. Farah cared
for the woman for 23 years, but upon Marge’s death, Farah discovered that their oral
• agreement was never put into writing. The woman’s son moved into the house and
Farah made a claim to the house. The court is likely to apply the doctrine of part
performance.
• Andy promises Ellie $100 on her 21st birthday. If this promise was contained in a simple
contract, the legal position is that such a promise is never binding as it must have
consideration supplied by Ellie.
• The High Court’s decision in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
is that they extended the doctrine of equitable estoppels such that it applies even
where there is no pre-existing contractual relationship between the parties.
• Which of the following statements about acceptance is false? Acceptance can be in any
manner chosen by the offeree. True: 1. Acceptance can be by telephone or email or
conduct, 2. acceptance must be unconditional, and 3. acceptance can only be made by
the person(s) to whom the offer was made.
• Section 15AA of the Acts Interpretation Act 1901 (Cth) provides that the purpose of the
statute or its object should be preferred method of determining the statute’s
meaning.
• Separation of powers: Which of the following statements about separation of powers in
Australia is correct? The executive is the body that administers the law.
• Equitable remedies: Which of the following is incorrect? Equitable remedies must be
awarded in a separate proceeding to common law remedies such as damages. Correct:
Equitable remedies are discretionary, and include specific performance, and injunctions.
• Civil and criminal law: Which of the following is not correct with respect to civil law? The
document filed by the defendant is called a writ. True: 1. The typical purpose of a civil
action is to obtain damages, 2. under civil law, one person may sue another who has
committed a wrongful act, and 3. interrogatories and discovery are procedures that are
available in civil proceedings.
• Federal system: Which of the following statements is correct? Australia is a federal
system, with two legal systems for each citizen.
• A contract dividing the proceeds of a cocaine importing venture that has no technical
defects and that is not overly harsh/unfair to either party is void.
• If one party has threatened another party to enter into a contract, the element that is
missing is real/genuine consent.
• Substantive and procedural law: Substantive law refers to actual rights under the law.
• The Age of Majority Act 1977 (Vic) reduced the age for contractual capacity of a minor
to
• Delegated legislation: An example of delegated legislation is the Corporations
Regulations 2001 (Cth).
• In which of the following types of agreements is there a presumption that parties intend
to be legally bound? A partnership between husband and wife.
• Court hierarchy: Local or Magistrates Courts are the lowest courts in the state
hierarchy.
• Which of the following statements about bilateral and unilateral contracts is not
correct?
o A unilateral contract does not require consideration but simply a promise to
perform an act if sufficient. True: 1. More than 1 party is required for both
bilateral and unilateral contracts, 2. both parties are obliged to perform their
promises in a bilateral contract, and 3. while only 1 of the parties is obligated to
perform an action in a unilateral contract.
• Criminal proceedings: An indictable offense is a more serious criminal offense.
• Law reports: Where are decisions of the High Court of Australia found only online? In
the Commonwealth Law Report.
• Which of the following circumstances are likely to affect the consent of one or both
parties to a contract? Mistakes and duress and undue influence
• Reception of English law in Australia: Which Latin phrase explained the rationale for
applying English laws to the new Colony of New South Wales? Terra Nullius.
• With respect to revocation, which of the following statements is not correct? The
offeror must personally communicate the revocation to the offeree. True: 1.
Revocation need not be in words, 2. the offeree may accept the offer until such time as
they become aware of the revocation, and 3. where an offer has been made to the
world at large, the revocation does not need to be seen by everyone in order to be
effective.
• Sources of law: the two main types of law in Australia are statute law and judgment-
made law.
• In Ashton v Pratt (2015) NSWCA 12, what was the main reason for the court deciding
that there was no intention to create a legally binding contract? The verbal language of
the agreement greatly lacked detail from either party and did not indicate definite
obligations.
• Simone advertises a car for $4,000. John responds to the advertisement and asks
whether Simone will take $3,000. Simon says “no”, but that she will hold the offer open
for a week. The next day, she sells it to Samantha. Which of the following statements is
 correct? Simone does not have to hold the offer open since no consideration was
given.
• Which of the following is not one of Brennan J’s six criteria for estoppel from Waltons
Stores (Interstate) Ltd v Maher (1988) 164 CLR 387? The promissory knew or was
reckless as to whether the promisee intended to act in that. 3 of 6 criteria: The
promissory induced an assumption, the promisee acted in reliance on that assumption,
and the promisee will suffer a material loss if the assumption is not fulfilled.
• Court hierarchy: The highest court in Australia is the High Court of Australia.
• Interpretation: Which of the following is not correct? With respect to interpretation, the
main approach used by courts is the purposive approach. Correct: The main approach
used by courts is the literal approach, the requirement that the natural and ordinary
meaning be given to words, and the courts are free to exercise judicial discretion.
• Which of the following no longer regulates business or commercial law? The Trade
Practices Act 1974 (Cth). Regulates: 1. Competition and Consumer Act 2010 (Cth), 2.
Corporations Act 2001 (Cth), and 3. the law of contract.
• Jack was subpoenaed to give evidence on Rods behalf. Jack claimed Rod promised him
$2000 to give evidence. Would Jack recover that money? No, since Jack’s public duty is
to give evidence in response to that subpoena.
• Which of the following statements about the contractual obligations of government
policy proposals is incorrect? Where the government makes a policy promise and a
citizen relies on it the court will always regard that policy commitment as a binding
contractual obligation. Correct: 1. The courts tend not to assign contractual obligations
to government policy promises, 2. Where the government enters into an ordinary
commercial agreement to buy services, the law of contract regulates this agreement,
and 3. In Australian Woollen Mills Pty Ltd v Commonwealth of Australia (1954) 92 CLR
424, the government’s wool subsidy was found to be an administrative scheme and not
contractual obligations.
• Constitution: Section 51 Commonwealth Constitution grants what type of lawmaking
power to the Commonwealth Parliament? Concurrent powers.
• Royal Assent: The Governor-General on the Queen’s behalf gives Royal Assent to an Act
of the Commonwealth Parliament.
• Sally puts up a sign stating that she has lost her dogs and will pay a reward of $100 for
their return to her within 3 days. Which of the following statements is correct? Chang
will not get the reward because he returned the dog knowing it was Sally’s, but
unaware of her offer of a reward.
• A qualified acceptance may also be known as a/an counteroffer.
• Which of the following statements about contracts is true? It is a statutory requirement
throughout Australia that some contracts must be in writing and others must be
evidenced in writing
• The legislature: Exclusive powers are those that can be exercised only by the
Commonwealth.
• Sources of law – statute: Which of the following is incorrect? Statutes may not overrule
existing common law.
• Civil law and criminal law: Where an act is both a crime and a tort, the State may
prosecute the offender for the crime, and the victim may bring a civil action.
• Which of the following is most likely to be considered an offer? “I’ll pay you $3,000 if
you complete a total rewrite of chapters 12 and 15 of this textbook.”
• Hierarchy of courts: Which of the following is higher than the Federal Court of Australia
in the federal court system? High Court. Lower than the Federal Court of Australia in the
federal court system: 1. Supreme Court, 2. Magistrates Court, and 3. Federal
Magistrates Court.
• The Executive Power: The Executive power is administered by the Queen, the Prime
Minister, and the Cabinet.
• Contracts voidable by a minor do not include those not binding unless ratified by the
minor during their minority. Include: 1. Those binding unless repudiated by the minor
during their minority, 2. Those binding unless repudiated by the minor within a
reasonable time after attaining their majority, and 3. Those not binding unless ratified
by the minor within a reasonable time of attaining majority.
• The postal acceptance rule can be impliedly excluded by offeror specifying actual
receipt of acceptance.
• With respect to the contractual capacity of corporations, s 124 of the Corporations Act
2001 (Cth) gives them all the legal capacity of a natural person (together with some
additional powers that can only be exercised by a corporation)
• In which of the following situations is the offer most likely not to have lapsed? Where
Wrench had an option to purchase land but, unknown to Wrench, the seller died prior
to Wrench’s acceptance. Likely: 1. Where Carter, a prospective purchaser of land,
makes a counteroffer that is rejected and then states that he will accept the earlier
offer, 2. Where no time was stated for acceptance by Jane, but Ben does not accept
within a reasonable time, and 3. Where Jim has become overtaken by insanity prior to
accepting.
• Where an agreement has been made during the course of trade or commerce between
businesses, the situation will commonly indicate that the parties intended to create
binding legal relations.
• Criminal offences: Which of the following is incorrect with respect to criminal offences?
A committal hearing is held before most summary offence matters. Correct: 1.
Indictable offences are generally the more serious offences, 2. The prosecution must
prove its case beyond reasonable doubt, and 3. Summary offences are determined by a
magistrate without a jury.
• Peter verbally offers Tara his car for $5000. Tara refuses saying it’s not worth that, but
she will pay $4000. What is the status of Peter’s first offer? It has lapsed because of
Tara’s counteroffer.
• Constitution: Which of the following statements about constitutions in Australia is NOT
correct? Australia has one constitution only (States have no constitutions). Correct: 1.
The Commonwealth Constitution sets out the relationship of the Commonwealth
government with the States, 2. A written constitution is a feature of a federal legal
 system such as Australia, and 3. The Commonwealth Constitution sets out the powers of
the Commonwealth government.
• What was one of the “practical benefits” received by Roffey in Williams v Roffey Bros &
Nicholls (Contractors) Ltd [1990] 1 All ER 512? Roffey did not need to find another
subcontractor.
• In Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995) 63 SASR 235, the option to
exercise renewal of the lease Negated the postal rule because the notification was not
sent by certified mail as required.
• Australian Constitution : Which Act established the federal legal and political system and
converted the separate colonies into states? Commonwealth of Australia Constitution
Act 1900.
• Common law: Which one of the following statements about common law is correct?
o Common law is judge made law.
• Business law: which of the following no longer regulates business or commercial law?
o Trade Practices Act 1974 (Cth).
• Which of the following facts about a “contract under seal” is incorrect? It must always
be supported by consideration to be enforceable. Correct: 1. It must be in writing, 2. It
obtains its binding legal force from the form in which it was prepared, and 3. It can allow
a gratuitous promise to be enforced.
Chapter 5 to Chapter 13

• Which of the following • A party in breach of contract is

statements is correct? A contract liable to pay damages for losses
may be illegal as performed occurring in the usual course of
where only one party performs it things from the breach.
in an illegal manner. • Which of the following is not one
• Which of the following is not of the six elements required for a
accurate? Duress involves: Duress claim of fraudulent
must be the only reason for misrepresentation to succeed?
entering into a contract. Correct: The representation must be in
1. Actual or threatened violence, writing (cannot be verbal only). 3
2. A party coerced into entering of the 6 elements are required for
into a contract (against their will), a claim of fraudulent
and 3. Coercion of a person or misrepresentation to succeed: 1.
their immediate family or near The representation must be false,
relatives. 2. the representation must have
been acted upon by the other
party, and 3. the representation
must be one of fact.

• Which of the following is not • The term “transparency” in unfair

true? Economic duress was found contracts means it is expressed in
in North Ocean Shipping Co Ltd v reasonably plain language that is
Hyundai Construction Co Ltd readily available to the affected
[1979] 1 QB 705 and the party.
threatened party was able to • Where a contract restricts one
recover the payments made party from exercising their trade,
under duress. True: 1. is a threat it may be valid provided it was e
to the innocent party’s economic reasonable as between the
interests, 2. permits the parties and the public.
threatened party to avoid the • Janine has sold her business to
contract, and 3. needs to be Simone. Simone insists on
distinguished from a legitimate inserting a clause in the
level of commercial pressure - an agreement that Janine cannot
example of an actionable level of open a similar business within 10
pressure is a threat to break a km of her former business, for the
contract without any legal next two years. Which of the
justification in order to extract following is not true? The court
money from an innocent party. will always uphold restraint of
• Which of the following is not trade provisions in contracts for
usually recoverable by way of sale of business. True. 1. The
damages? Compensation for clause is a restraint of trade. 2.
mere inconvenience or Where a restraint of trade is
 disappointment. Recoverable: reasonable, the whole parts of the
Loss that is difficult to estimate, contract will be void. 3. It is
nominal loss, and expenses impossible to say whether a court
incurred in reliance on the other would deem this restraint of trade
party’s promise to perform. clause reasonable without further
details.

• In determining whether a • Which of the following statements

statement has become a term of about the parol evidence rule is
the contract, the key test applied true? It does not apply where it
by the courts is contractual can be shown that the written
intention. contract was not intended to be a
• In which case did the court complete record of the
recognise that damages for agreement.
disappointment and distress could • In Jarvis v Swans Tours Ltd [1973]
be available subject to certain QB 233, where Jarvis was
limitations? Baltic Shipping Co v disappointed by, among other
Dillon (1993) 176 CLR 344. things, the little dry nut cakes on
his holiday damages were
awarded partly for
disappointment.

• No fault on the part of either party is an element required for the doctrine of
frustration to operate. (frustration sẽ nói là ko bên nào có lỗi, lỗi do acts of God)
• In Howe v Teefy (1927) 27 Sr (NSW) 301 where a leased racehorse was retaken three
months into a three-year lease, the fact that assessment was difficult did not prevent a
court from granting damages where the plaintiff had been deprived of something of
value.
• Which of the following is not an example of an unfair contract term? The specifics of
Rose’s situation were not taken into consideration by Melton Apartment Construction
Ltd.
• Unliquidated damages are damages where the court is to determine the amount.
• Which of the following is NOT a requirement for an assignment of a debt or other chose
in action under various State statutes? Fourteen days’ notice in writing is provided to
debtor. Requirement. 1. The assignment is absolute and not by way of charge, 2. The
assignment is in writing, and 3. If not in writing then notice of the assignment is given by
notice to the debtor.
• With respect to substantial performance and partial performance, partial performance
is where a party voluntarily accepts less than full performance by the other party.
• How is the Australian Consumer Law structured into the Competition and Consumer Act
2010 (Cth)? The Australian Consumer Law is Sch 2 to the Competition and Consumer
Act 2010 (Cth).
• Century Dragon Pty Ltd is contracted to export 1000 beach balls to Minerva Beach Surf
Club by 1 January, with payment due by 1 April. Which of the following is correct? The
time of delivery is likely to be considered an essential term.
• A term that is vital to a contract is known as a condition.
• Which of the following is NOT a method of termination? Rectification.
• Parol evidence may not be admitted in which of the following circumstances? To
contradict an unambiguous term.
• The test of whether a statement is a term or a representation is not dependent on
which of the following? Whether the party making the statement believed in the truth
of the statement or not.
• In Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107, it was
held that the subcontractor could get an indemnity even though the subcontractor
had given no consideration under the contract
• Which of the following is not correct? An action in restitution cannot be brought where
there is no contract between the parties. Correct. 1. An action in restitution is often
brought where one party has been unjustly enriched at the expense of the other, 2. can
• be brought where the contract between the parties is unenforceable, and 3. can be
brought where there has been only part performance.
• In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149
CLR 337, the High Court found that the contract was frustrated.
• Compensatory damages are also known as actual/ordinary damages.
• Which of the following is not a type of termination? Where an event occurs that is not
the fault of either party that causes a fundamental change to the nature of the
contract and the parties obligations and although the contract covers that eventuality,
it would cause hardship to one party to enforce it. A type of termination: 1.
Termination by bankruptcy, 2. When the parties have fully and exactly performed their
obligations to each other under the contract, and 3. when a deed displaces a simple
contract.
• Which of the following is a circumstance where specific performance would be ordered?
o Where the subject matter of the contract is an apartment in a complex of 20
apartments.
• The remedy of restitution is based on the concept of unjust enrichment where the
defendant is unjustly enriched at the plaintiff’s expense.
• Which of the following are not usually compensated for with payment of damages?
o Injured feelings/ disappointment.
• Which of the following is not correct with respect to the Australian Consumer Law?
o Owing to the Commonwealth’s limited lawmaking powers under s51 of the
Constitution, it applies only to corporations. True: It is contained within
Schedule 2 to the Competition and Consumer Act 2010 (Cth), it applies to
 conduct engaged in outside of Australia, and the Australian Consumer Law is
applied in each State and Territory.
• Which of the following is not one of the four ways a statute may render a contract illegal
set out in Yango Pastoral Co v First Chicago Australia Ltd (1978) 139 CLR 410? The
• contract may set out an unreasonable restraint. True: The contract may require an
action that statute forbids, may be performed in a prohibited manner, and may have
been made to effect an unlawful purpose.
• Jacq and Jack robbed the Commercial Bank. Jacq thinks that Jack was too aggressive
with the tellers and the robbery could have gone very wrong. Jacq is now refusing to
give Jack his share of the takings. Which of the following is correct? The contract
involved the commission of a crime and is therefore illegal and unenforceable.
• Janey takes her fur stole to the dry cleaner. When she returns to collect it, there is a
black mark in the shape of an iron in the middle of her stole and it is ruined. The dry
cleaner tells Janey that he is not liable for the damage to her fur stole as there was an
exemption clause in their agreement. Which of the following is not correct? If the
exemption clause was merely contained within a notice on the wall, the dry cleaner
will be liable for the damage. True: 1. If the exemption clause was on the dry cleaning
docket Janey was given and she was told : “don’t worry about this, it’s just the docket
you have to give us when you come to collect your stole”, the dry cleaner will not be
able to rely on the exemption clause, 2. In order for the exemption clause to be effective
where it was not in a signed document, it had to have been brought to Janey’s
attention, and 3. If the exemption clause was on the dry cleaning docket Janey was
given rather than a formal written contract, the onus will be on the dry cleaner to prove
that Janey was aware it contained conditions that would modify the agreement
• Criminal proceedings may be brought for unfair practices.
• Chris maintains that a document that he and Kathy have signed is a binding contract.
Kathy maintains that it is merely a receipt and does not include all the terms of their
agreement. Which of the following statements is correct? Parol evidence may be
admissible.
• In which of the following circumstances is the court likely to order specific performance
rather than damages? The contract involved the sale of an expensive waterfront
mansion on Sydney Harbour.
• In the case of restraint of trade with respect to employment, the court does not easily
allow parties to contract out of their means of employment.
• The general principle with respect to damages for breach of contract is damages are to
place the innocent party in the same position they would have been in if the contract
had been performed.
• Which of the following is not correct with respect to the prohibition of unconscionable
conduct within the meaning of the unwritten law? Unequal bargaining power of itself is
enough to constitute a special disadvantage. True: 1. Unwritten law includes equity, 2.
There is no unconscionable conduct where both parties have made the same mistake in
good faith, and 3. There must be a special disadvantage and exploitation of that
disadvantage.
• Which of the following is correct? Damages must not be too remote from a breach.
• James, a chef, tells Laura, who is looking to buy his antique lounge chair, that the chair is
of Spanish origin. Three weeks later a written contract is drafted that makes no mention
of the chair’s origin. The statement that the chair is of Spanish origin is most likely to be
a/an mere puff representation.
• Which of the following is not true? A signature on a contract containing an exemption
clause guarantees that an exemption clause will be effective. True: 1. Will not
guarantee the effectiveness of the clause where the doctrine of non est factum applies,
2. Incorporates the exemption clause into the contract, and 3. Will be effective even if
one party did not read the contract.
• Which of the following is not a requirement of a valid collateral contract? The
consideration must be of higher value than the main contract. True: 1. The statement
• must be promissory, 2. The parties must have intended the promise to be binding, and
3. The promise must be supported by consideration.
• In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528, only the
ordinary loss related to the delay in installation of the boiler was recoverable because
the defendant was not made aware that additional lucrative contracts had been
negotiated.
• Which of the following statements is correct with respect to mistake? Rectification is a
remedy for certain types of mistakes in written contracts.

• The definition of “consumer” is limited by what amount? Recently increased

to $100,000.
• Which of the following are sources of illegality? Statute and common law.
• When a contract is made orally, the question of what the express terms are is
a question of fact.

• Which of the following would not constitute the unfair practice of harassment
or coercion under the Australian Consumer Law? Where there is a debt in
connection with the possible of goods and the creditor, Tells the debtor,
among repeated demands for payment give the debtor a discount for early
payment. Could constitute the unfair practice of harassment or coercion
under the Australian Consumer Law: 1. Consciously calculates to intimidate
the debtor with the content of her demands 2. Makes demands constantly in
order to exhaust the debtor, and 3. Chooses particularly threatening demands
in order to demoralise the debtor.
• Smithy Builders have a contract with Big Bank Pty Ltd which contains the
following clause: “Where Smithy Builders fails to complete the contract by 7
December, it will pay a sum of $300,000 in full and final satisfaction of its
liability.” Smithy Builders fails to complete by 7 December. If Smithy Builders
 wishes to avoid paying the sum of $300,000, what must it prove? That the
clause is a penalty clause (to punish the builders).

• Which unfair practice involves participation in a trading scheme where persons at the
top receive most of the benefits? Pyramid selling.
• Sharma was selling his secondhand vacuum cleaner to Natasha and told Natasha that it
could “do all the rooms in the house ten times over without the filter needing to be
changed”. Natasha spent a few weeks shopping for other vacuum cleaners but
eventually returned and purchased Sharma’s, telling Sharma it was the cheapest she
had seen in two weeks and she liked the colour. When Natasha took it home she soon
discovered that the vacuum cleaner could only do one room at a time and then the filter
would need changing. Natasha cannot rely on Sharma’s statement for breach of
contract because Natasha did not attach any importance to the statement when it was
made.
• Which of the following is not a circumstance where the court would award specific
performance? Where the contract would require constant supervision by the court.
True: 1. Mitigation, 2. Contributory negligence, and 3. Remoteness.
• In which case did the court recognise that damages for disappointment and distress
could be available subject to certain limitations? Baltic Shipping Co v Dillion (1993) 176
CLR 344.
• Which of the following is not an element required for acceptable quality of goods? That
the goods are acceptably fit for the consumer’s purpose. True: 1. Free from defects, 2.
Durable, and 3. Safe.
• Which of the following is not a type of contract illegal at common law on the grounds of
public policy? Contracts to oust the jurisdiction of the courts. True: 1. Contracts to
commit a tort, 2. Contracts prejudicial to the public safety, and 3. Champertous
contracts.
• Non est factum means it is not [my] deed.
• Which of the following is an element required for the doctrine of frustration to operate?
o No fault on the part of either party.
• Sandy is selling her horse, Flossy. Miranda is interested in buying Flossy. Sandy tells
Miranda that Flossy is the best little racehorse in Australia and has all the registrations,
licences and permits required to race in the current season but that Miranda should
probably get this checked herself. These two statements are mere puff and
representation.
• Where a contract has not been completed within the specified time, the innocent party
will be entitled to terminate the contract upon giving notice that time is of the
essence.
• Which of the following statements is correct? An exemption clause is a term that
excludes or limits the liability of one or more parties.
• Which of the following actions is unlikely to constitute duress? A threat to contact
police if stolen moneys were not repaid to the employer. Likely: 1. A threat to destroy
the house of a party’s sister, 2. A physical beating to a party until they signed a contract
that they would have signed without the beating, and 3. Physical confinement of an
otherwise unharmed party to pressure them to enter into a contract that would be for
their benefit.
• How may a court view substantial performance of a contract? The contract is complete,
but the uncomplete portion may be allowed for as a reduction of the full contract
price.
• Where a contract is made in writing, the express terms of that contract are generally to
be found in the writing.
• Which of the following matters is least likely to contribute to a finding of
unconscionable conduct in connection with goods or services? Where the supplier
makes a commercial decision to breach the contract knowing that the customer will
seek a legal remedy for the breach. Likely: 1. Where conditions imposed on a customer
were not necessary for the protection of the supplier’s interests, 2. Where the supplier
acted in bad faith, and 3. Where unfair tactics were used against the customer.
• Which of the following is incorrect? Repudiation is the same as termination; the
contract is at an end.
• Which of the following statements is not correct? A breach of a warranty entitles the
innocent party to be compensated with damages and termination of the contract.
Correct: 1. A condition is a major term of the contract; a breach renders the contract
substantially different from the agreed term, 2. A breach of a condition entitles the
innocent party to be compensated with damages, and 3. A warranty is a minor term of
the contract; a breach renders the contract insubstantially different from the agreed
term.
• Which of the following statements is not correct? With respect to legality of object,
o illegal objectives will not affect a contract provided both parties have agreed to
it.
• Chris and Tama buy a noodle bar from Udon4U Pty Ltd. In the course of negotiations,
Udon4U Pty Ltd’s agent, Nadia, misrepresents the turnover of the noodle bar, stating an
amount that is double the actually turnover. Nadia herself received this information on
turnover from Geoff, a director of Udon4U Pty Ltd. In making the misrepresentation,
what sections has Nadia likely contravened? As she merely passed on the information
with no intention to procure a contravention, she probably will not be personally
liable.
• Which of the following is not correct? With respect to s 18 of the Australian Consumer
Law, silence is not relevant in considering the contravention.
• A divisible contract is one that provides expressly or impliedly that performance is due
after the other party has performed stages of the contract.
• Which is not an enforcement measure under the Australian Consumer Law?
Disqualification from managing corporations for a period of time for a breach of s 18.
 An enforcement measure under the Australian Consumer Law: 1. An order of the court
requiring a supplier to establish a training regime for its employees, 2. A one-year
• probation order of the court, and 3. An order directing that a supplier comply with the
terms of an undertaking they have given as well as pay compensation for the breach.
• In which of the following cases would a plea of frustration not succeed? Where the
event should have been foreseen. Succeed: 1. Where no specific provision was made
for the event in the contract, 2. Where performance is still possible but would be
pointless, and 3. Where performance has become fundamentally different from what
was contemplated by the parties.
• Ben planned the perfect surprise birthday party for his mother. He hired a hall, he hired
a violinist and he organised catering. Two weeks prior to the event, the violinist called to
cancel. Ben was so upset at the loss of what he thought would be the highlight of the
evening that he called the whole event off. Ben lost both the deposit on the hall and the
deposit for the catering. Which of the following is correct? Ben has a duty to mitigate
his losses.
• Which of the following constitutes pyramid selling? Jaz is approached by her neighbour
to join the sales team of Thames Beauty Products. Thames sells its products door-to-
door through agents and is a close-knit family type of company. Agents that introduce
other agents to “the family” are rewarded with a finders’ fee. It is only $500 to join
the Thames family, and Jaz only has to spend $400 on products in her first month.
• What is the main difference between the misleading or deceptive conduct provisions in
the Trade Practices Act 1974 (Cth) and in the Australian Consumer Law? The Australian
Consumer Law refers to a person.
• The plaintiff in an action under s18 of the Australian Consumer Law is required to prove
what? The conduct is misleading or deceptive or likely to mislead or deceive.
• Which of the following guarantees applies to a sale by auction? Guarantee as to title.
• When are nominal damages awarded? A legal right has been infringed but there is no
actual loss.
• A unilateral mistake does not include mistake as to capacity of the parties. Include: 1.
Mistake as to the nature of the document signed, 2. Mistake as to the identity of the
parties, and 3. Mistake as to the terms of the contract.
• A consumer contract with respect to unfair contract terms does not involve wholly for
personal, domestic or household use or resupply. Involve: 1. The supply of goods or
services, 2. The sale of land, and 3. An individual who acquires goods or services or land.
• Which of the following is a way that a contract may be terminated by operation of law?
o Where a party to a delivery of goods contract becomes bankrupt.
• Which of the following statements is incorrect? The remedies available for breach of an
intermediate term depend on their classification as an intermediate term, not the
effect of the particular breach. Correct: 1. Innominate terms are neither conditions nor
warranties, 2. Intermediate terms are the same as innominate terms, and 3.
Intermediate terms are terms that are capable of being breached in minor and major
ways.
• Which of the following is not correct? An injunction is sometimes granted to compel a
party to do something they would not have been ordered to do by specific
performance. Correct: 1. is an order of the court, 2. Restrains a person from doing
something, and 3. Is an equitable remedy.
• Which of the following is not correct? Parol evidence is not admissible to evidence
whether a document constitutes a contract or merely a note. Correct: 1. Will always be
admissible to evidence duress, 2. Is admissible to evidence a collateral oral agreement,
and 3. Will always be admissible to evidence fraud.
• Exemplary damages might be ordered as a penalty where there has been an
intentional breach.
• In considering whether a contract is a standard form contract, which of the following is
not something that the court must consider? Whether the price payable takes into
account the specifics of the party and the transaction. Must consider: 1. If one of the
parties has most of the bargaining power, 2. If one party prepared the contract prior to
discussing it with the other party, and 3. If another party was given opportunity to
negotiate the terms.
• Which of the following is not correct? The Australian Consumer does not have any
provision for unconscionable conduct. Correct: 1. The Australian Consumer Law
contains provisions on unconscionable conduct, 2. The Australian Consumer Law
contains provisions on misrepresentation, and 3. The Australian Consumer Law contains
provisions on misrepresentation in relation to the sale of land.
• John tells Cara that the car he has for sale is “as is, where is” and “only needs the oil
filter changed and she’s good to go”. John made this statement based on the fact he has
had the car checked by a mechanic a few weeks ago. Unfortunately, the car required
more significant repairs before it was roadworthy. What remedies are available for Cara
under the common law? Cara has no remedy under the common law (if John’s
statement was not a term in the contract).
• Which of the following is correct? When the parties’ obligations under a contract have
been discharged then so has the contract.
• In which one of the following cases was it held that damages are not recoverable for
distress or disappointment unless the contract promised to provide pleasure, enjoyment
or relaxation or where the distress or disappointment arises from physical injury or
physical inconvenience? Baltic Shipping Co v Dillon (1993) 176 CLR 344.
• Which of the following is not an equitable remedy? Exemplary damages. Equitable
remedy: 1. Injunction, 2. Specific performance, and 3. Restitution.
• In which one of the following cases was it held that for a loss in the contemplation of
the parties to be recoverable it must be “a serious possibility”, “a real danger”, “liable to
result” or “not unlikely” to occur? Koufos v Czarnikow Ltd [1969] 1 AC 350.
• How is repudiation determined by the court? Objectively.
• Tom agrees to fix Richie’s car for $1,000. Richie pays a deposit of $200 and Tom
guarantees the job will be completed within two weeks. Before Tom commences the
repairs, the car is stolen from Richie’s locked garage and destroyed by fire. Richie
demands the return of his $200 deposit and Tom refuses to give it to him. Which of the
 following is not correct? Under the Australian Consumer Law and Fair Trading Act 2012
(Vic), Tom is entitled to retain the $200 deposit. Correct: 1. The contract is
automatically terminated, 2. Tom is no longer obligated to fix Richie’s car, and 3. Under
the Australian Consumer Law and Fair Trading Act 2012 (Vic), Tom is entitled to retain
the portion of the $200 deposit he spent on parts and other relevant expenses, if any.
• Which of the following statements about damages is not correct? Damages are
awarded to compensate a party for all losses caused by breach of contract.
• Where one party believes the contract refers to the Bonny Lass, a freight ship based out
of Norway, and the other party believes the contract refers to the Bonny Lass, a freight
ship based out of Hong Kong, this is an example of a mutual mistake.
• Which of the following is not one of the three elements of an unfair term under s 24(1)
of the Australian Consumer Law? Where the term is not transparent. Three elements of
an unfair term: 1. It would cause a significant imbalance in the parties’ rights and
obligations, 2. It is not reasonably necessary to protect the interests of the
disadvantaged party, and 3. It would cause detriment to a party if it were applied.
• In Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625, Gibbs CJ listed all but the
following various ways that a contract may be repudiated “[I]f one party discharges
[themself] from performance by agreeing to a new agreement that supersedes the
previous one”.
• In Barton v Armstrong [1976] AC 104, the court held that the threats to the plaintiff’s
life contributed to the plaintiff’s decision to sign the contract and therefore
constituted duress.
• Which of the following is not correct with respect to mitigation of loss? The burden of
proving that losses were mitigated falls upon the party claiming the damages ie. the
defendant.
• Which of the following is the general position of the courts when awarding damages?
o Where it is possible to place an innocent part in the position he/she would
have been in if the breach had not occurred.
• With respect to consumer guarantees, which of the following is not correct? With
respect to fitness for purpose, a “disclosed purpose” relates to the supplier only - the
manufacturer may make representations to the consumer, but the consumer cannot
disclose a purpose to the manufacture and receive a guarantee in return. Correct: 1. It
is possible to exclude the consumer guarantees in very limited circumstances, 2.
Remedies for non-compliance with the consumer guarantees depend in whether there
was a “major failure” or not, and 3. A manufacturer does not need to provide repair
facilities or spare parts after a certain period.
• Consumer guarantees as to title are contained within sections 51-56 and ss 60-61 of the
Australian Consumer Law.
• Which of the following is not an unfair practice under the Australian Consumer Law?
o Where a television advertisement for a chocolate bar shows teddy bears
working the manufacturing lines.
• Which of the following is not a type of contract void at common law? An agreement
that offends the Australian Consumer Law (ACL). A type of contract void at common
 law: 1. A contract to oust the jurisdiction of the courts, 2. A “marriage brokerage”
agreement whereby money is paid in order to procure a marriage, and 3. A price
maintenance agreement that restrains trade.
• What does the concept “quantum meruit” mean? The innocent party would be unjustly
enriched if they were able to retain the benefit without compensating the party in
breach for the “amount he deserves”.
• In Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 the court recognized “reasonably
foreseeable losses” as being
o Losses that arise naturally from a breach of contract, and
o Losses that are actually contemplated by the parties.
• Which of the following is correct with respect to privity of contract? Despite the
doctrine, a new owner of land is able to enforce a covenant between the previous
owner and another party.
• Why are late payment charges on credit cards not penalties? Banks penalties on cards
are legitimate to cover their costs.
• In Curtis v Chemical Cleaning & Dyeing Co Ltd [1951] 1 KB 805, the exemption clause in
the sales agreement for the drycleaning was not sufficiently explained to the
customer.
• Which of the following is not a situation where frustration would occur? Where the
performance of the contract is rendered illegal by the destruction of the subject
matter of the contract by one of the parties. A situation where frustration would occur:
1. Long term serious illness of a person contracted to perform a personal services
contract, 2. Where the government in exercising its powers has made completion of the
contract impossible, and 3. Where a change in the law renders performance of the
contract illegal.
• When considering whether a contract is a standard form contract, the court does not
have to consider whether one party’s vicarious liability for its agents is limited.
Consider: 1. The bargaining power of the parties as unequal bargaining power does not
constitute a special disadvantage, 2. Whether both parties had the opportunity to
• negotiate the terms of the contract, and 3. Whether the terms of the contract take into
account the specifics of the particular transaction.
• A party repudiates a contract when they are no longer able or are unwilling to perform
their obligations
• Chung is looking to purchase a carwash business from Terry. Terry tells Chung that she
serves 100-150 cars per day and that she has just concluded an agreement to service
the fleet of cars of a local business. In reality, Terry has only served around 15 cars per
day since her customer service received a bad review in the local newspaper and a
competing carwash business opened one street away. Terry intends for Chung to buy
her business based on what she has stated. This is an example of fraudulent
misrepresentation
• Undue influence differs from duress in that with undue influence, no unlawful act is
required
• If one party has completed its obligations under the contract, and the other has not: The
contract cannot be terminated by simple agreement without consideration
• In ACCC v Turi Foods Pty Ltd [2012] FCA 19: The statement that the chickens were “free
to roam” was misleading as there were too many chickens pr square metre for the
chickens to easily move.
• Can a person use an official position they hold for their financial advantage? No because
if a contract is involved, this could lead to the promoting of corruption in public life.
• Marnie loans Bill $1000 so that Bill can pay a local politician to ensure his tender will be
the winning tender. The contract between Marnie and Bill is an illegal contract.
• Which of the following is not a valid assignment of a contract? A contract for personal
services.
• Which of the following is correct? When the parties’ obligations under the contract
have been discharge, then so has the contract
• Matt sells his car to Tabitha, who purchases it on the condition that she can continue to:
keep it in his garage at no cost for the next six months. Tabitha pays in full. Two months
later, Matt tells Tabitha she will have to remove her car from his garage as he has
bought a: new car and wants to keep it in the garage. Which of the following statements
is correct? If Tabitha promises to remove her car, Matt will not be able to enforce the
promise: unless the promise is supported by consideration or made under seal.
• In which case was it that held that where an exemption clause is in a non-contractual
document, the clause must be brought to the other party’s attention for it to be
effective? Causer v Browne [1952] VLR 1.
• A liquidated damages clause in a written contract: Sets out the amount agreed payable
to the innocent party if there is a breach of contract
• In which case did the court find that passing off had been engaged in and the misleading
and deceptive conduct provisions had been contravened? Apand Pty Ltd v The Kettle
Chip Co Pty Ltd (1994) 52 FCR 474.
• Which of the following sections of the Australian Consumer Law are relevant to
misrepresentation? Sections 18 and 29.
• Terms may not be implied into a contract by representations
• In Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, the court
recognised which of the following terms which later became part of Australian law in
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115?
Innominate term
• Fraser crashes his car with his friend Angus as a passenger. Angus is injured. Angus was
not wearing a seatbelt. Which of the following is not correct? Damages cannot be
apportioned for breach of contractual duty of care where there is contributory
• negligence. Correct: 1. Liability would likely be apportioned between Fraser and Angus,
2. Damages awarded to Angus, if any, would be reduced by his contributory negligence,
and 3. Angus’ contributory negligence relates only to his own safety, not to that of
others.
• Which of the following is not a restraint of trade? An agreement by which Steve agrees
to repay his daughter’s loan debt in return for the person who advanced the loan to
his daughter agreeing not to report Steve’s daughter to the police for fraud. A restraint
of trade: 1. A price maintenance agreement, 2. A contract restraining Laura from
working as a welder within Ballarat for two years after her termination with Welders R
Us, and 3. An agreement between John and Liz that John will not open a brew shop
within 2km of the brew shop he just sold to Liz.

• Which of the following • Chang wants the court to imply an

constitutes referral selling? Jaz engineering custom into a term of
purchases a painting through a a contract to which he is a party.
new art gallery that has just The other party has no knowledge
opened in town. The price is high of this custom. It is not contrary to
and Jaz is at first uncertain about any of the express terms of the
the expense, but the art dealer contract. The court may imply the
promises Jaz a commission on term.
sales to any of Jaz’s friends who • Jong complains that the barbecue
she sends along to the gallery. Jaz he bought is not fit for purpose
has a lot of art collector friends so because the metal sides melted
is sure that she will receive some the first time he cooked with it.
commission from the gallery in The manufacturer maintains that
the near future. Jong should not have used the
barbecue for slow cooking and
that it never represented that the
barbecue would be fit for the
purpose of slow cooking. What are
the circumstances in which the
guarantee as to fitness for purpose
would apply? Where Jong made
known to the supplier that he was
going to use the barbecue for
slow cooking meals.

• Ella contracted Anasaki to build a • It is important to distinguish

balcony for her house to certain between representations and
specifications. When Anasaki had terms because damages can only
finished, Ella was shocked to see be awarded for fraudulent or
that the balcony was much bigger negligent misrepresentation.
than she had specified. Ella • Which of the following is not an
refused to pay Anasaki. Which of enforcement measure under the
the following is incorrect? It Australian Consumer Law? A
would be unjust for Ella to have disclosure order issued by the
to pay any money for a balcony ACCC. An enforcement measure
that was not built to her under the Australian Consumer
Law: 1. An order of the court
 specifications under the requiring a supplier to publish an
contract. advertisement, 2. A two-year
• Cathy and Mel entered into a probation order of the court, and
contract where Cathy was to 3. A notice issued by the ACCC
steam clean seven rooms in Mel’s requiring a supplier to
house at $200 per room. After substantiate a claim about a
cleaning three rooms, Cathy product they are selling.
abandoned the job for a more • Which of the following is not an
valuable contract. Which of the exception to privity? Employment.
following is true? If the contract Exception: 1. Insurance, 2. Agency
is divisible, Cathy is entitled to and trust, and 3. Property Law.
payment for the work she has
done.

• James is going through a difficult time and does not feel he can confide in anyone.
Eventually he confides in the priest of his church and asks for support. The priest
forcefully tells James to turn over all of his money to the church or he will be struck
down by lightening. The priest does not believe that James will be struck down. James
makes the payments. Which of the following is most likely legal grounds for James to
avoid the transaction? Undue influence.
• In which High Court decision was it said: “[T]here are two relevant circumstances in
which a breach of contract by one party may entitle the other to terminate. The first is
where the obligation [is] essential ... The second relevant circumstance is where there
has been a sufficiently serious breach of a non-essential term ...we rest our decision in
the appeal not upon the ground of breach of an essential obligation, but upon
application of the doctrine respecting intermediate terms.” Koompahtoo Local
Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115.
• A written contract allows Joseph, the neighbour of Sonny, to take “as many strawberries
as he likes each strawberry season”. This contract is valid as the parties’ intention is
clear.
• Which of the following is not a way that a person seeking to rely on an exemption clause
can show that the clause has become part of the contract? By showing it was brought
to the notice of the other party at the time of, or subsequent to, entering into the
contract.
• Which of the following is not correct? It is prohibited to offer goods at a special price
and not have a sufficient amount of those goods available for a long period of time.
Correct: 1. It is prohibited to offer free gifts with purchase then factor the cost of the gift
into the purchase, 2. It is prohibited to take a customer’s money knowing that the
product they want is no longer available even where the product the supplier intends to
sell to the customer in its place is similar, and 3. It is not prohibited for a bank to send a
credit card to a customer at their written request.
• Which of the following is not a way to discharge a contract? Through breach.
• Who/what are exempt from the provisions of s18 of the Australian Consumer Law?
o Information providers such as media outlets.
• Krell v Henry [1903] 2 KB 740 illustrated what point? That the parties are discharged if
an event occurs which forms the basis of the contract, but which prevents
performance at no fault of either party.
• Contingent conditions include conditions subsequent and conditions precedent.
• Which of the following is not one of the special relationships in which the onus of
proving that undue influence was not employed shifts to the denying Party? Paren and
child where the child is living independently. Special relationships: 1. Solicitor and
client, 2. Trustee and beneficiary, and 3. Doctor and patient.
• Which of the following is not correct with respect to termination by subsequent
agreement? A subsequent simple contract can cancel a contract where one party has
completed their obligations and the other has not. Correct: 1. A subsequent agreement
may cancel an original contract, 2. A subsequent agreement must be valid to rescind an
earlier contract, and 3. A subsequent simple contract can cancel a contract where there
is still something to be done by each party.
• The parol evidence rule performs much the same function as a merger clause.
• A party repudiates contract when the party is able but unwilling to perform their
obligations under it.
• Where a loan contract allows for termination by the loan provider in the event of
default by the borrower, this is an express power to terminate.
• If the court held the sum the parties inserted into their contract ($100,000) to be a
penalty, and the actual loss determined by a court was $30,000, the plaintiff would be
able to recover $30,000 only.
• Which of the following statement is not correct? A breach of a warranty entitles the
innocent party to be compensated with damages and termination of the contract.
Correct: 1. A condition is a major term of the contract; a breach renders the contract
substantially different from the agreed term, 2. A breach of a condition entitles the
innocent party to be compensated with damages, and 3. A warranty is a minor term of
the contract; a breach renders the contract in substantially different from the agreed
term.
• Which of the following is not correct with respect to misleading conduct under the
Australian Consumer Law as compared with the common law of misrepresentation? The
person does not necessarily have to engage in the conduct. Correct: 1. An opinion will
• not contravene s 18 unless the person did not genuinely hold that opinion, 2. Silence
• may contravene section 18, and 3. Mere puffs will not contravene s 18.
• Which of the following is not a remedy for unconscionable conduct? A criminal
prosecution. A remedy for unconscionable conduct: 1. An injunction, 2. Ordinary
damages, and 3. A pecuniary penalty.
• Which of the following is not correct? A criminal penalty can be sought for a breach of s
o 18. Correct: 1. The ACCC can seek both criminal and pecuniary penalties for
breaches of the unfair practices provisions of the Australian Consumer Law, 2.
 The new maximum penalties may vary depending on turnover of a corporation,
and 3. Injunctions can be sought as orders
• Which Australian case is most similar to H Parsons (Livestock) Ltd v Uttley Ingham & Co
Ltd [1978] QB 791 in relation to applying foreseeability to limit claims for damages? Day
v O’Leary (1992) 57 SASR 206
• Which of the following is not correct? Restitution was not awarded in the case of Pavey
& Matthews Pty Ltd v Paul (1987) 162 CLR 221 as the contract was not in writing as
required by statute and therefore not enforceable. Correct: 1. May be awarded where
there is less than substantial performance, 2. Is said to be based on unjust enrichment,
and 3. Is subject to a number of defences, such as estoppel.
• Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460; Beswick v Beswick [1968]
AC 58 and Tweddle v Atkinson (1861) 1 B & S 393 all relate to the doctrine of privity.
• The Australian Consumer Law definition of “supply” does not include gift. Include: 1. Re-
supply, 2. Exchange, and 3. Lease.
• When it was said in Re Hall & Barker [1878] 9 Ch D 538, “if a shoemaker agrees to make
a pair of shoes, he cannot offer you one shoe and ask you to pay one half the price”, this
is referring to the court’s tendency to regard contracts as entire.
• Which of the following is most correct? If an amount of $5,000 is specified in a written
contract as the agreed genuine pre-estimate of damages in the event the contract is
breached then this is commonly referred to as liquidated damages.
• Which of the following is not true with respect to misleading or deceptive conduct? A
person acting as a “mere conduit” in passing on representations may also be liable.
True: 1. The plaitiff has to prove that conduct was misleading or decetive, 2. The plaitiff
has to prove the causal link between the conduct and the loss, and 3. A corporation is
not liable where it is clear that the corporation is not the source of the information.
• Which of the following constitutes bait advertising? Jaz approaches a salesperson on
the forecourt to buy the car package she saw advertised on television and is told that
there were only two cars for sale as a part of that deal and there are now none left.
The salesperson tells Jaz that she would look much better in the convertible model
and although there is no deal on that car, it is only $50,000 more.

Chapter 14 and 15

• To claim damages a causal link must be established between what two things? The
defendants breach and the plaintiff’s injury.
• Which of the following is not correct? The reform to the law of negligence that took
place in Australia in the early 2000s does not apply to claims in contract law. Correct: 1.
Limits the scope of potential liability for negligence, 2. Was enacted in all Australian
states and territories, and 3. Covers personal injury.
• In Tame v State of New South Wales (2002) 211 CLR 317 where Tame was given a false
blood alcohol reading, part of the test of reasonable foreseeability is a question of fact.
• In Australian Safeway Stores v Zaluzna (1987) 162 CLR 479, the respondent was a lawful
entrant upon the land of the respondent, establishing a relationship between them
 and there was therefore a duty of care owed by the appellant to avoid a foreseeable
risk of injury.
• Which of the following is not a provision of the Wrongs Act 1958 (Vic) relating to
professional liability? The court must rely on peer professional opinion even where it
considers that opinion irrational.
• Where a person gives advice, that advice is relied upon and the advice is incorrect, the
person giving the advice may be liable in negligence. Which of the following is incorrect?
The duty of care only arises where the “special relationship” involves a person seeking
advice from the advice-giver, not where the advice was given unrequested and merely
accepted.
• The “neighbour principle” is often viewed as a test of the foreseeability of harm.
• Why was the plaintiff successful in Overseas Tankship (UK) Ltd v Miller Steamship Co Pty
Ltd (The Wagon Mound No 2) [1967] AC 617 (PC) when another plaintiff failed in the
• earlier related Wagon Mound case? In the first case, the plaintiffs failed to show that a
reasonable man would have foreseen the risk of damage from the oil spill.
• Nicola drives the forklift at her place of work, Rooze’s Roofing. Nicola always leaves the
forklift in a certain place where she has been told to leave it, with the forks up off the
ground. One afternoon a customer who is collecting goods from the workshop reverses
his car into the forks on the forklift. He is injured and his car is damaged. What is the
principle that would make Nicola’s employer liable for her actions? Vicarious liability.
• Which of the following is not correct? In The Wagon Mound No 1 and The Wagon
Mound No 2, where there was an unfortunate combination of an oil spill, welding
sparks and floating cotton waste, the loss was found to be not reasonably foreseeable
in the circumstances. Correct: 1. If damages are too remote will not be recoverable, 2.
The remoteness test will be satisfied where the damage suffered is of the same type of
kind as foreseeable damage, and 3. In order for damage to not be too remote, it must
be reasonably foreseeable.
 Chapter 16 and 17

Which of the following statements regarding the dissolution of a partnership is

incorrect? A firm’s assets as contributed by partners to make up capital losses need
not be applied to pay the firm’s debts/liabilities to non-partners. Correct: 1. In the
event of dissolution, losses must be met first out of profits, followed by capital, then by
partners in proportion to their share of profits, 2. After dissolution, each partner is
entitled to advances and residue by the firm, and 3. After the dissolution, each partner’s
authority to bind the firm continues, so far as necessary for winding up partnership
affairs and completing unfinished transactions.

• The incorrect statement is? The owners of a corporation have unlimited liability.
Correct: 1. A separate legal entity is separate from its owners and managers, 2. A
corporation can sue and be sued in its own name, and 3. Complex business structures
are more expensive to establish.
• The incorrect statement? If the giving of investment advice is within the scope of the
firm’s business then all partners are jointly and severally liable for advice that is not in
a client’s best interests. Correct: 1. Partners are not bound when another partner
misappropriates monies, 2. The client should seek a personal indemnity from a partner,
and 3. Special skill is required to bind all partners.
• Find a statement that is incorrect. A wrongful act/omission includes breach of contract
or of fiduciary duty, negligent misrepresentation, and misleading or deceptive
conduct. Correct: 1. A retiring partner should give specific notice of their retirement to
persons with whom the firm has had dealings to avoid being made liable for debts
incurred after retirement, 2. Persons who represent themselves, or knowingly allow
themselves to be represented, as a partner, are liable as a partner to anyone who has
on the faith of such representation given credit to the firm, and 3. Innocent partners are
liable for wrongful acts of other partners made in the ordinary conduct of business.
• Which finding is correct?: In Popat v Schonchhatra (1997) 3 All ER 800, the Court
decided
o Popat was entitled to half the profits on the sale of the business and to a share
of the profits that had accrued after the dissolution of the partnership, but
before the final settlement of accounts.
• Which statement regarding partnership is incorrect? Partnerships do not avoid taking
on the formality and expense of an incorporated company. Correct: 1. A partnership
(or firm) is a way of gathering resources or expertise for major projects, 2. Partners in a
partnership complement each other with their skills and bring in new capital and
broader funding options, 3. A partnership in law may exist without the partners being
aware of it.
• Which below is incorrect? A firm is not bound by the acts of a partner if the person with
whom the partner is dealing knows or believes him/her to be a partner. Correct: 1. the
act is not of the usual business of the kind carried on by the firm, 2. the partner exceeds
his/her actual authority in the particular matter, and 3. the person with whom the
partner is dealing knows that he/she has exceeded his/her authority.
• Which of the below statement is incorrect? Partnership property is liable to be seized
for the private (personal) debt of a partner and made liable on a judgment against the
partnership. Correct: 1. A creditor who has obtained a judgment in respect of the
separate debt of a partner may obtain an order charging that partner’s interest in the
partnership property and profits with the amount of the debt and interest, 2. A creditor
who has obtained a judgment in respect of the separate debt of a partner may obtain by
order the appointment of a receiver of that partner’s share of profits and of any other
money which may be coming to the partner in respect of the partnership, and 3. The
two sources of law relevant when considering how partners bind their partners when
dealing with third parties are the common law (including equity) of agency and the
Partnership Act. The common law complements the provisions of the Partnership Act in
relation to the authority that an agent has.
• Which legislation regulates partnerships in NSW? Partnership Act 1892 (NSW) [or
Partnership Act 1958 (Vic) if there is no (NSW) after Partnership Act 1892]
• Legislation in Victoria: What Act regulates partnerships in Victoria? Partnership Act
1958 (Vic)
• Which below statement is incorrect? In a partnership, partners have limited liability for
the business debts. Correct: 1. Partners share the profits in a partnership, 2. A partner is
also an agent of the partnership, and 3. The agreement may be implied in a partnership.
• Which of the below statements is incorrect? A written and signed notice of a partner’s
intention to dissolve the partnership is required where no fixed term has been agreed
upon for the duration of the partnership. Correct: 1. a continuing guarantee given by or
to a partnership is revoked as to future transactions if there is a change in the
constitution of the partnership, 2. where a partnership continues after a fixed term has
expired, the rights and duties of the partners remain the same, but the partnership
becomes a partnership at will, and 3. partnership property must be used exclusively for
• the purposes of the partnership and in the manner set out in the partnership
agreement.
• Which of the statements below is incorrect? A partner’s express authority must be in
writing. Correct: 1. A partner’s authority to buy/sell goods of a kind necessary for or
usually employed in the business on account of the firm is implied, 2. A partner cannot
pledge the firm’s credit for purposes not connected with its ordinary course of business
without express authority, and 3. A partner cannot pledge the firm’s assets for private
debts without express authority.
• Which of the below does not apply to the Partnership Act? The partnership under the
Act must be registered with ASIC. Apply: 1. The rules in the Partnership Acts assist in
determining whether a business is being carried on in common, 2. Each rule states a
negative: i.e. that a certain fact does not of itself create a partnership, but is only
indicative of a partnership, and 3. Joint or part ownership or joint tenancy, or tenancy in
common whether or not the owners/tenants share the profits, does not of itself create
a partnership as to anything soheld/owned.
• How would a partner pledge the firm’s credit? Only for a purpose directly connected to
the firm’s business but must have express authority to do so.
• Which of the following is NOT a ground for termination of a partnership? Partner leaves
the jurisdiction. A ground for termination of a partnership: 1. Court order, 2. Expiry of a
fixed term, and 3. Bankruptcy of a partner.
• The incorrect statement is? A partner cannot pledge/sell partnership property, incur
and pay debts on partnership accounts or hire employees. Correct: 1. A partner has
express actual and implied actual authority to engage in certain activities with third
parties, 2. Contravention of an agreement to restrict a partner’s authority is not binding
on the firm if notice of the agreement has been given, and 3. In Polkinghorne v Holland
(1934) 51 CLR 143, the firm was held liable because Holland provided the advice in his
role as solicitor; thus in the ordinary course of the firm’s business.
• Which of the following statements regarding limited partners is incorrect? If a limited
partner has suffered his/her share of the partnership property to be charged for a
separate debt, the other partners are entitled to dissolve the partnership. Correct: 1. A
limited partner may assign his/her share in the partnership with the consent of the
general partners, 2. The consent of a limited partner is not required to admit a person as
a partner, and 3. A limited partner is not entitled to dissolve the partnership by notice.
• Which of the following statements regarding partnerships is incorrect? Each partner
must take an active part in the direction and management of the firm. Correct: 1. The
second element of a partnership is carrying out a business in common, 2. To be a
partnership there must be a mutuality of rights and obligations, and 3. In Degiorgio v
Dunn [2004] NSWSC 767 it was held that there was no partnership because the business
was not run “in common”.
• Find incorrect statement. A partnership cannot be dissolved because the business is
carried on at a loss. Correct: 1. A term often included in a partnership agreement that
allows other partners to purchase a retiring/deceased partner’s interest at an agreed
valuation avoids the disruption of a formal winding, 2. Partnerships can be dissolved
because of mutual incompatibility, making it impossible for partners to carry on a
business, and 3. On dissolution, partnership property can be applied towards the
payment of partnership liabilities/debts and any surplus can be distributed among the
partners.
• What constitutes an exception to the usual number of a partnership being 20 partners?
o The Corporations Regulations 2001 (Cth) provide greater numbers in certain
specified professions.
• Which court decision regarding fiduciary duties is incorrect? In Harvey v Harvey (1970)
120 CLR 529, the Court held that if a partner receives an additional annual fee to be
“on call” for that client, the fee belongs to the partnership. Correct: 1. In Chan v
Zacharia (1984) 154 CLR 178, the court decided that that the fiduciary relationship
continued until the partnership had finally been wound up, 2. In United Dominion Corp
• Ltd v Brian Pty Ltd (1985) 157 CLR 1, the Court found that a fiduciary relationship, with
attendant fiduciary obligations ordinarily exist between prospective partners who have
embarked upon the conduct of the partnership business or venture before the precise
terms of any partnership agreement have been settled, and 3. In Popat v Schonchhatra
 (1997) 3 ALLER 800 in the absence of a statement to the contrary, partners are entitled
to an equal share of profits.
• Which is incorrect statement? If a member of a firm of solicitors acting for a vendor in
a sale absconds with the deposit, his/her partners are not liable to refund the money.
Correct: 1. In Lloyd v Grace, Smith & Co [1912] AC 716, the firm was held responsible for
the fraud committed by a managing clerk of a firm, who misappropriated property while
acting within the scope of his authority, 2. In SJ Mackie Pty Ltd v Dalziell Medical
Practice Pty Ltd [1989] 2 Qd it was held that the transfer of a share to a non-partner
breaks the continuity of the firm, constituting a new firm/partnership of the remaining
former partners and the new member, and 3. Partnership agreements can contain
provisions to enable the transition from one firm to another to be effected without the
disruption of a formal winding up.
• Which of the following statements is incorrect? a partnership must be in writing.
Correct: 1. a separate legal entity can commit civil wrongs and engage in criminal
conduct, 2. a public company has serious compliance obligations, and 3. a separate legal
entity is entitled to own property, pay tax and enter into contracts.
• Find one incorrect statement? A creditor can enforce liability against an incoming
partner whether or not he/she is a party to the contract. Correct: 1. In the absence of
special statutory provision, although each partner is liable with the others for the whole
of the debts of the firm, their liability is only joint, 2. A creditor can bring only one action
against members of a partnership and any partner can insist that the action be stayed
until all other partners are joined as parties, and 3. A person admitted into an existing
firm, liability may be incurred where it is specially agreed upon.
• Which statement regarding dissolution of a partnership is incorrect? After payment of
the firm’s liabilities, partners do not have the right to have surplus assets applied in
payment of what may be due to the partners respectively / A firm’s asset as
contributed by partners to make up capital losses need not to be applied to pay the
firm’s debt/liabilities to non-partners Correct: (1) Partners are not entitled to have
partnership property applied towards the payment of partnership liabilities, (2) On the
termination of the partnership, any partner can apply to the court for a decree to
dissolve the partnership and appoint a receiver to wind up the firm’s business/affairs,
and (3) Should a sequestration order be made against a partner, a creditor of the firm
cannot receive a dividend out of the bankrupt’s separate property until all separate
creditors of the bankrupt partner have been paid in full, (4) In the event of dissolution,
losses must be met first out of profits, followed by capital, then by partners in
proportion to their share of profits, (5) After dissolution, each partner is entitled to
advances and residue by the firm, and (6) After the dissolution, each partner’s authority
to bind the firm continues, so far as necessary for winding up partnership affairs and
completing unfinished transactions.
• Cribb v Korn (1911) 12 CLR 205 established the sharing of joint returns does not in itself
create a partnership.
• Regarding partnerships, which of the following statements is incorrect? Partnerships
are created with a view to profit, so partners must make a profit b A partner does not
 have to have a direct claim to a share of the profits. Correct: 1. Associations and
charities are not partnerships, as profits come from ancillary business activities and are
reinvested, not distributed as dividends to their members, and 2. The Partnership Acts
do not govern members of a corporation incorporated under the provisions of the
Corporations Act 2001 (Cth), a special Act of Parliament, or Royal Charter.
• Which statements is incorrect? More complex business organisations are unsuitable
for larger businesses. Correct: 1. Like most partners, sole traders have unlimited
personal liability of the business/firm, 2. Upon incorporation, a corporation becomes a
separate
• legal entity, and 3. Diverse ownership requires proper management and expertise in
numerous areas.
• Which statements is not correct? A partnership agreement must be in writing; it
cannot be reached orally or by a course of conduct. Correct: 1. if the agreement is that
a person should be paid a fixed sum by the firm, he/she may be a partner and jointly
liable to creditors of the firm, 2. the rights and obligations of partners to each other
arise from the partnership agreement, the statute and the equitable concept of the
fiduciary, and 3. the Partnership Act determines partners’ rights, duties and interests, if
not included in the partnership agreement.
• Which statement regarding persons of unsound mind and minors is incorrect? if a
partner who is a minor enters into a contract with a third party on behalf of the firm,
the minor is liable as far as private assets are concerned. Correct: 1. a partner of
unsound mind is capable of binding the firm and of being bound by co-partners, unless
proven that he/she was of unsound mind when the partnership was entered into and
the other partners knew this, 2. a creditor who has obtained judgment against the firm
may not seize the minor’s separate property, and 3. a minor will become liable as an
ordinary partner when he/she attains majority the partnership is not repudiated within
a reasonable time.
• Which of the following statements is not correct? Incorporated limited partnerships
have been introduced in all Australian States and Territories. Correct: 1. as an agent, a
partner is able to bind the other partners and, as principal, be bound by the actions of
the other partners, 2. in New South Wales, Victoria, Queensland, South Australia,
Western Australia and Tasmania provision for limited partnerships is made in the
Partnership Act, and 3. the Partnership Act provides that the rules of the common law
and equity are to continue in force except insofar as they are inconsistent with the Act.
• Which of the following statements regarding the written law is incorrect? The
Corporations Regulations 2001 (Cth), reg 2A.1.01 does not set a maxima of partners
for architects and accountants. Correct: 1. Under s 115 of the Corporations Act 2001
• (Cth), the maximum number of persons who may form a partnership for the acquisition
of gain is 20, 2. Under the Corporations Regulations 2001 (Cth), reg 2A.1.01,
partnerships of more than 20 partners may be formed for certain professions/callings,
and 3. The Corporations Regulations 2001 (Cth), reg 2A.1.01 sets a maxima of partners
for medical and legal practitioners, veterinary surgeons, patent and trademark
attorneys, sharebrokers and stockbrokers and pharmaceutical chemists.
• Which is incorrect statements regarding limited partnerships? A limited partner does
not have the right to inspect the books of the firm. Correct: 1. A limited partner must
not take part in the management of the business and does not have power to bind the
firm, 2. If a limited partner partakes in the management of the business, he/she is liable
as a general partner, and 3. Any differences arising as to ordinary matters connected
with the firm’s business are to be decided by a majority of the general partners.
• Which of the following statements regarding dissolution of partnership is incorrect? A
firm’s assets as contributed by partners to make up capital losses need not be applied
to pay the firm’s debts/liabilities to non-partners. Correct: 1. In the event of
dissolution, losses must be met first out of profits, followed by capital, then by partners
in proportion to their share of profits, 2. After dissolution, each partner is entitled to
advances and residue by the firm, and 3. After the dissolution, each partner’s authority
to bind the firm continues, so far as necessary for winding up partnership affairs and
completing unfinished transactions.
• Which statement regarding an outsize partnership is incorrect? Its partnership
agreement is invalid. Correct: 1. it has more than 20 partners, 2. it is liable to a criminal
penalty ($500), and 3. its agreement does not affect the enforceability of contracts or
other arrangements made.
• Which statement is incorrect? Partnership may be formed in order to undertake a
single business transaction. Correct: 1. Carrying on a business implies repetition (Smith
v Anderson (1880) 15 Ch D 247), 2. In Khan v Miah [2000] 1 WLR 2123 it was held that
work, such as finding, acquiring and fitting out a shop/restaurant, is undertaken with a
• view to profit, and 3. In Keith Spicer Ltd v Mansell [1970] 1 All ER 462 it was held that
ordering goods and opening a joint bank account in contemplation of a business are
insufficient for a partnership.
• Which legislation controls the actual registration of the firm name? Business Names
Registration Act 2011 (Cth).
• Which court finding is incorrect? In Mercantile Credit Co Ltd v Garrod [1962] 3 All ER
1103, damages were not recovered even though, from the plaintiff’s perspective, the
sale of the car was within the usual course of business. Correct: 1. In Goldberg v
Jenkins (1889) 15 VLR 36, the firm was not bound to the transaction because borrowing
money on behalf of the firm at over 60% interest when comparable rates were between
6% and 10% was beyond ‘the usual way’, 2. In Construction Engineering Pty Ltd v Hexyl
Pty Ltd (1985) 155 CLR 541, Hexyl was not liable because the construction contract
appeared to be between Construction Engineering and Tembel, 3. If judgment is
obtained against one or more partners of a firm, no action may be taken against the
other partners, even if satisfaction cannot be obtained from the partner(s) sued.
Trách nhiệm và nghĩa vụ cáo trạng: Reporting obligations:
What is a binding precedent? A decision of a court that binds judges in a lower court in
the same court hierarchy. Which are some of the main features of the Electronic
Transactions Act 1999 (Cth): All of the above. Peter verbally offers Tara his car for
$5000. Tara refuses saying it’s not worth that but: she will pay $4000. What’s the status of
Peter’s first offer? It has lapsed because of Tara’s counteroffer. What was one of the
“practical benefits” received by Roffey in Williams v Roffey Bros &: Nicholls (Contractors)
Ltd [1990] 1 All ER 512? Roffey did not need to find another subcontractor. Changing the
Constitution : Section 128 of the Commonwealth Constitution provides that the
Constitution can be: changed by referendum that requires a “yes” vote. By the majority
of voters and in a majority of States

LUẬT THỰC CHẤT VÀ THỦ TỤC: Substantive and procedural

law: Substantive law: Refers to actual rights under the law. In which of the following
situations is the offer most likely not to have lapsed? Where Wrench had an option to
purchase land but, unknown to Wrench, the seller died: prior to Wrench’s acceptance.
Reception of English law in Australia: Which Latin phrase explained the rationale for
applying English laws to the new Colony of : New South Wales? terra nullius. Andy
promises Ellie $100 on her 21st birthday. If this promise was contained in a simple :
contract, the legal position is that such a promise is: Never binding as it must have
consideration supplied by Ellie. In Elizabeth City Center Pty Ltd v Corralyn Pty Ltd
(1995) 63 SASR 235, the option to : exercise renewal of the lease: Negated the postal
rule because the notification was not sent by certified mail as : required.

Nguồn chứng cứ bên ngoài hỗ trợ đàm

phán: Interpretation -extrinsic materials: In interpretation, extrinsic materials:
Are required to be referred to by a court. With respect to revocation, which of the
following statements is not correct? The offeror must personally communicate the
revocation to the offeree. Which of the following circumstances are likely to affect the
consent of one or both : parties to a contract: a&b. Simon and Stella, both of full legal
capacity, agree to go on a date. Stella is to pay for the : dinner, but she is running late
and does not meet Simon at all. Simon is embarrassed and : angry and calls Stella
the next day to threaten to sue her for his taxi fares and dinner : expenses. Will
Simon succeed in his claims? No, because Simon and Stella did not intend the
agreement to create legally enforceable : obligations

Royal Assent: Who or what gives Royal Assent to an Act of the Commonwealth Parliament?
The Governor-General on the Queen’s behalf. In Crown Melbourne Ltd v Cosmopolitan
Hotel (Vic) Pty Ltd [2016] HCA 26 why did the : High Court disagree with the decision of the
Victorian Court of Appeal in finding there was : no case for promissory estoppel: B&C.
Which of the following is not a way in which an offer can be terminated?Revocation after
acceptance has been mailed where the postal rule applies. Which of the following is most
likely to be considered an offer? “I’ll pay you $3,000 if you complete a total rewrite of

chapters 12 and 15 of this: textbook.” XEM LẠI CHAPTER 12 VÀ

15!!!
Australian Constitution : Which Act established the federal legal and political system
and converted the separate : colonies into states? Commonwealth of Australia
Constitution Act 1900. Contracts voidable by a minor do not include: Those not binding
unless ratified by the minor during their minority

Chapter 3 và 4: Where an agreement has been made during the course of

trade or commerce between businesses, the situation will commonly indicate that the
parties: intended to create binding legal relations. Which of the following is not a class
of persons regarded by the law as wholly or partly: incapable of entering into legally
binding contracts? Women. Separation of powers: Which of the following is not one
of the three branches of the Commonwealth government : in Australia: The Governor.
Criminal offences: Which of the following is incorrect with respect to criminal
offences? A committal hearing is held before most summary offence matters. Federal
system: Which of the following statements is correct? Australia is a federal system,
with two legal systems foreach citizen. Native Title: Native Title was first recognised in
which of the following cases? Mabo v State of Queensland (No 2) (1992) 175 CLR 1.
Separation of powers: Which of the following statements about separation of powers
in Australia is correct? The executive is the body that administers the law.

The postal acceptance rule: Can be impliedly excluded by offeror specifying actual receipt
of acceptance. Jack was subpoenaed to give evidence on Rods behalf. Jack claimed Rod
promised him : $2000 to give evidence. Would Jack recover that money? No - Jack’s public
duty is to give evidence in response to that subpoena. Law Reports: Where are decisions
of the High Court of Australia found?: only online.

In the Commonwealth Law Reports. The Age of Majority Act 1977 (Vic) reduced the age
for contractual capacity of a minor: 18. Delegated legislation: An example of delegated
legislation is the: Partnership Act 1958 (Vic). The Executive Power : The Executive
power is administered by: The Queen, the Prime Minister and the Cabinet. Delegated
legislation: Which of the following is not correct?: Delegated legislation: Can only be
made by Government Ministers. Common law: Which one of the following statements
about common law is correct? Common law is judge made law. In Ashton v Pratt [2015]
NSWCA 12 what was the main reason for the court deciding that : there was no intention to
create a legally binding contract? The verbal language of the agreement greatly lacked
detail from either party and did not : indicate definite obligations. Separation of powers:
Which of the following is not one of the three branches of the Commonwealth
government : in Australia: The Governor. Public and private law: Which of the
following is not classified as private law? Criminal law

Luật Tố tụng Hình sự: Criminal proceedings: An

indictable offense is: A more serious criminal offence. Where an agreement has been
made during the course of trade or commerce between businesses, the situation will
commonly indicate that the parties: intended to create binding legal relations.

A qualified acceptance may also be known as a/an: Counteroffer. The legislature:

Exclusive powers are those that: Can be exercised only by the Common wealth.
Contracts voidable by a minor do notinclude: Those not binding unless ratified by the
minor during their minority. Which of the following statements about contracts is true?
It is a statutory requirement throughout Australia that some contracts must be in writing :
and others must be evidenced in writing. Sources of law: Sources of law in Australia do
not include: Repealed statutes.

Chapter 2: Public and private law: Which of the following is not classified as
private law? Criminal law. Which of the following statements about acceptance is
false? Acceptance can be in anymanner chosen by the offeree. The main legal issue in
Felthouse v Bindley (1862) 11CB (NS) 869 was: generally silence/lack of action does not
constitute acceptance of an offer. Separation of powers: Which of the following
statements about separation of powers in Australia is correct? The executive is the
bodythat administers the law.

Chữ ký trên hợp đồng và điều khoản miễn trừ: Which of the
following is not true? Asignature on a contract containing an exemption : clause:
Guarantees that an exemption clause will be effective. Which of the following would not
constitute the unfair practice of harassment or : coercion under the Australian
Consumer Law? Where there is a debt in connection with the : possible of goods and
the creditor. Tells the debtor, among repeated demands for payment give the debtor a
discount for : early payment.

Hợp đồng tiêu chuẩn: When considering whether a contract is a

standard formcontract, the court does not : have to consider: Whether one party’s
vicarious liability for its agents is limited. Non est factum means: It is not [my] deed. Tom
agrees to fix Richie’s car for $1,000. Richie pays adeposit of $200 and Tom: guarantees the
job will be completed within two weeks. Before Tom commences the repairs, : the car is
stolen from Richie’s locked garage and destroyed by fire. Richie demands the : return of his
$200 deposit and Tom refuses to give it to him. Which of the following is not : correct?
Under the Australian Consumer Law and Fair Trading Act 2012 (Vic), Tom is entitled to:
retain the $200 deposit. Which of the following is not correct?

An action in restitution: Cannot be brought where there is no contract between the

parties. Which of thefollowing is not one of the three elements of an unfair term under
s 24(1) : of the Australian Consumer Law? Where: The term is not transparent. Which
unfair practice involves participation in a trading scheme where persons at the: top
receive most of the benefits? pyramid selling. Janey takes her fur stole to the dry
cleaner. When she returns to collect it, there is a : black mark in the shape of an iron
in the middle of her stole and it is ruined. The dry cleaner : tells Janey that he is not
liable for the damage to her fur stole as there was an exemption : clause in their
agreement. Which of the following is not correct? In order for the exemption clause to
be effective where it was not in a signed document, : it had to have been brought to Janey’s
attention. Which of the following statements is correct? An exemption clause is a term
that excludes or limits the liability of one or more parties. Which of the following is not
usually recoverable by way of damages? Compensation for mere inconvenience or
disappointment.

Từ chối tiếp tục hợp đồng: A party repudiates a contract

when: They are no longer able or are unwilling to perform their obligations. Chung is
looking to purchase a carwash business from Terry. Terry tells Chung that she :
serves 100-150 cars per day and that she has just concluded an agreement to service
the : fleet of cars of a local business. In reality, Terry has only served around 15 cars
per day since : her customer service received a bad review in the local newspaper
and a competing carwash : business opened one street away. Terry intends for
Chung to buy her business based on : what she has stated. This is an example of:
fraudulent misrepresentation.

Undue influence differs from duress in that: With undue influence, no unlawful act is
required. In Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR
107: It was held that the subcontractor could get an indemnity even though the :
subcontractor had given no consideration under the contract. Jacq and Jack robbed the
Commercial Bank. Jacq thinks that Jack was too aggressive : with the tellers and the
robbery could have gone very wrong. Jacq is now refusing to give : Jack his share of
the takings. Which of the following is correct? The contract involved the commission of
a crime and is therefore illegal and : unenforceable.

If one party has completed its obligations under the contract, and the other has not:
The contract cannot be terminated by simple agreement without consideration. Ella
contracted Anasaki to build a balcony for her house to certain specifications. When :
Anasaki had finished, Ella was shocked to see that the balcony was much bigger
than she : had specified. Ella refused to pay Anasaki. Which of the following is
incorrect? It would be unjust for Ella to have to pay any money for a balcony that was not
built to : her specifications under the contract. Which of the following is an element
required for the doctrine of frustration to operate? No fault on the part of either party.
Which of the following is not correct with respect to the prohibition of
unconscionable : conduct within the meaning of the unwritten law? Unequal
bargaining power of itself is enough to constitute a special disadvantage.

Quyền đòi bồi thường hết mức có thể được: công

đức lượng tử (quantum meruit): In Jarvis v Swans Tours Ltd [1973]
QB 233, where Jarvis was disappointed by, among : other things, the little dry nut
cakes on his holiday: Damages were awarded partly for disappointment. What does the
concept “quantum meruit” mean? The innocent party would be unjustly enriched if they
were able to retain the benefit : without compensating the party in breach for the “amount he
deserves”. Chang wants the court to imply an engineering custom into a term of a
contract to which : he is a party. The other party has no knowledge of this custom. It
is not contrary to any of : the express terms of the contract. The court: May imply the
term. Jong complains that the barbecue he bought is not fit for purpose because the
metal : sides melted the first time he cooked with it. The manufacturer maintains that
Jong should : not have used the barbecue for slow cooking and that it never
represented that the : barbecue would be fit for the purpose of slow cooking. What
are the circumstances in which : the guarantee as to fitness for purpose would
apply? Where Jong made known to the supplier that he was going to use the barbecue for
slow cooking meals. Which of the following matters is least likely to contribute to a
finding of unconscionable : conduct in connection with goods or services? Where the
supplier makes a commercial decision to breach the contract knowing that : the customer
will seek a legal remedy for the breach.

It is important to distinguish between representations and terms because: Damages

can only be awarded for fraudulent or negligent misrepresentation. Which of the following
is not an enforcement measure under the Australian Consumer : Law? A disclosure
order issued by the ACCC. Which of the following is not an exception to privity?
Employment. James is going through a difficult time and does not feel he can confide
in anyone. : Eventually he confides in the priest of his church and asks for support.
The priest forcefully : tells James to turn over all of his money to the church or he
will be struck down by : lightening. The priest does not believe that James will be
struck down. James makes the : payments. Which of the following is most likely legal
grounds for James to avoid the : transaction? Undue influence. Which of the following
are sources of illegality? Statute and common law. What is the main difference
between the misleading or deceptive conduct provisions in : the Trade Practices Act
1974 (Cth) and in the Australian Consumer Law? The Australian Consumer Law refers
to a person. Which of the following is not a type of contract illegal at common law on
the grounds of : public policy? Champertous contracts. Undue influence differs from
duress in that: With undue influence, no unlawful act is required.

Thiệt hại điển hình: In Howe v Teefy (1927) 27 SR (NSW) 301

where a leased racehorse was retaken three : months into a three-year lease: The fact
that assessment was difficult did not prevent a court from granting damages : where the
plaintiff had been deprived of something of value. Which of the following is not an
equitable remedy? Exemplary damages. Which of the following matters is least likely
to contribute to a finding of unconscionable : conduct in connection with goods or
services? Where the supplier makes a commercial decision to breach the contract knowing
that : the customer will seek a legal remedy for the breach.

Consumer guarantees as to title are contained within: Sections 51-56 and ss 60-61 of
the Australian Consumer Law. Which of the following is not one of the four ways a
statute may render a contract illegal : set out in Yango Pastoral Co v First Chicago
Australia Ltd (1978) 139 CLR 410? The contract: May set out an unreasonable restraint.

Lừa đảo xuyên tạc có chủ ý: Which of the following is not one
of the six elements required for a claim of fraudulent : misrepresentation to succeed?
The representation must be in writing (cannot be verbal only). Which of the following is
not a way that a person seeking to rely on an exemption clause : can show that the
clause has become part of the contract? By showing it was brought to the notice of the
other party at the time of, or subsequent : to, entering into the contract.

Can a person use an official position they hold for their financial advantage? No
because if a contract is involved, this could lead to the promoting of corruption in : public
life. Which of the following is correct? It is prohibited to offer goods at a special price, not
have a sufficient amount of those : goods available and then attempt to upsell to customers
who are drawn to the shop for the : special price deal. Which of the following is not true?
A signature on a contract containing an exemption : clause: Guarantees that an
exemption clause will be effective.

Hạn chế thương mại: Ella contracted Anasaki to build a

balcony for her house to certain specifications. When : Anasaki had finished, Ella
was shocked to see that the balcony was much bigger than she : had specified. Ella
refused to pay Anasaki. Which of the following is incorrect? It would be unjust for
Ella to have to pay any money for a balcony that was not built to : her specifications
under the contract. Which of the following is not a restraint of trade? An agreement by
which Steve agrees to repay his daughter’s loan debt in return for the : person who
advanced the loan to his daughter agreeing not to report Steve’s daughter to : the police for
fraud. In Tame v State of New South Wales (2002) 211 CLR 317 where Tame was given
a false : blood alcohol reading: Part of the test of reasonable foreseeability is a question
of fact. Which of the following is not correct? In The Wagon Mound No 1 and The
Wagon Mound No 2, where there was an : unfortunate combination of an oil spill, welding
sparks and floating cotton waste, the loss : was found to be not reasonably foreseeable in
the circumstances. Which of the following is not a provision of the Wrongs Act 1958
(Vic) relating to: professional liability? The court must rely on peer professional opinion
even where it considers that opinion : irrational. Why was the plaintiff successful in
Overseas Tankship (UK) Ltd v Miller Steamship Co Pty : Ltd (The Wagon Mound No 2)
[1967] AC 617 (PC) when another plaintiff failed in the earlier : related Wagon Mound
case? In the first case, the plaintiffs failed to show that a reasonable man would have
foreseen : the risk of damage from the oil spill. Which of the following is not correct? The
reform to the law of negligence that took : place in Australia in the early 2000s: Does
not apply to claims in contract law.

In Australian Safeway Stores v Zaluzna (1987) 162 CLR 479: The respondent was a
lawful entrant upon the land of the respondent, establishing a : relationship between them
and there was therefore a duty of careowed by the appellant to : avoid a foreseeable risk of
injury. In Australian Safeway Stores v Zaluzna (1987) 162 CLR 479: The respondent
was a lawful entrant upon the land of the respondent, establishing a : relationship
between them and there was therefore a duty of care owed by the appellant to : avoid
a foreseeable risk of injury. Which of the following is not a provision of the Wrongs
Act 1958 (Vic) relating to: professional liability? The court must rely on peer
professionalopinion even where it considers that opinion : irrational.

Thiệt hại không thể lường trước: To claim damages a causal link
must be established between what two things? The defendants breach and the
plaintiff’s injury. Which of the following is not correct? In The Wagon Mound No 1 and
The Wagon Mound No 2, where there was an : unfortunate combination of an oil spill,
welding sparks and floating cotton waste, the loss : was found to be not reasonably
foreseeable in the circumstances. Why was the plaintiff successful in Overseas
Tankship (UK) Ltd v Miller Steamship Co Pty : Ltd (The Wagon Mound No 2) [1967] AC
617 (PC) when another plaintiff failed in the earlier : related Wagon Mound case? In
the first case, the plaintiffs failed to show that a reasonable man would have foreseen
: the risk of damage from the oil spill. In Tame v State of New South Wales (2002) 211
CLR 317 where Tame was given a false : blood alcohol reading: Part of the test of
reasonable foreseeability is a question of fact.

Find incorrect statement: A partnership cannot be dissolved because the business is

carried on at a loss (cẩn
thận: doanh nghiệp gặp khó khăn
thua lỗ thì giải thể là chuyện đương nhiên)
Which below is incorrect? A firm is not bound by the acts of a partner if: the person with
whom the partner isdealing knows that he/she has exceeded his/her authority.

89 --> 282

Laws and government regulations affect almost all business activities. t. Law consists of enforceable rules
governing relationships among individuals and between individuals and their society. t. Many different
laws may affect a single business transaction. t. Business decision makers are expected to make decisions
that are ethically sound. t. A key to avoiding business disputes is to go ahead without thinking ahead. f.
Statutory law does not include county ordinances. f. The stability and predictability of the law are
essential to business activities. t. Remedies in equity include decrees of specific performance. t. “UCC
2–207(1)” is a citation to Uniform Commercial Code Section 2–207, subsection 1. t. The
courts, in
interpreting statutory law, often rely on the common law as a guide to what the
legislators intended. t. Most state trial court decisions are not published. t. A jury’s
good sense and careful consideration of consequences is known as jurisprudence. f. Procedural law
consists of all laws that outline the methods of enforcing rights. t. Administrative law is a source of
American law that is consists of statutes. f. Statutes are laws enacted by Congress and the state
legislatures and comprise one of the sources of American law. t. Courts do not depart from precedents. f.
Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights. f.
In a common law system, judges are not obligated to follow the precedents established within their
jurisdictions. f. Damages are a remedy at law. t. Remedies in equity include injunctions. t. In most states,
the courts no longer grant “equitable” remedies. f. The term common law refers to law that is common
throughout the world. f. The common law is a term for the laws that are familiar to most of us. f.
Constitutional law includes only the U.S. Constitution. f. Whether a law is constitutional depends on its
source. f.

The U.S. Constitution reserves to the federal government all powers not granted to the states. f. Statutory
law includes state statutes. t. The courts, in interpreting statutory law, may rely on the common law as a
guide to what the legislators intended. t. A citation identifies the publication in which a legal authority can
be found. t. Administrative law consists of the rules, orders, and decisions of administrative agencies. t.
Administrative law includes only state regulations. f. Criminal law focuses on rights and duties that exist
between persons. f. Criminal acts are prohibited only by federal government statutes. f. The party against
whom a lawsuit is brought is the plaintiff or petitioner. f. When all the judges (or justices) agree on a
decision, a majority opinion is written for the entire court. f

Statistics, Inc., is a corporation engaged in the business of compiling, analyzing, and marketing data. To
accomplish its purposes, Statistics obtains financing, and hires and fires employees. Laws and
government regulations affect such business activities as hiring and firing decisions; the manufacturing
and marketing of products; business financing all of the choices. In a suit against Olive, Pimento obtains
damages. In the U.S. legal system, this remedy at law is usual. Congress enacts a statute, the Federal
Deposit Insurance Corporation (an administrative agency) issues rules, the Southeast Financial
Institutions Association (a private organizations) issues instructions, South Valley Bank posts a memo
with orders for its employees, and Tina tells her co-worker about a recent news story. Sources of law
include the rules issued by federal administrative agencies. The Regional Counties Commission
approves a new property tax measure, and the professors and students at State Law School publish the
results of their most recent legal research. Sources of law include measures approved by governing
bodies. Dave and Ellen enter into a contract via e-mail. When a dispute arises over the performance of the
deal, Dave files a suit against Ellen. The emerging body of law that governs transactions conducted via
the Internet is referred to by the term cyberlaw. Kevin is a judge hearing the case of Local Dispatch Co. v.
National Transport Corp. Applying the relevant rule of law to the facts of the case requires Kevin to find
previously decided cases that, in relation to the case under consideration, are as similar as possible. As a
judge, Baxter applies common law rules. These rules develop from decisions of the courts in legal
disputes. There are no precedents on which the court deciding the case Standard Resource Co. v. Topline
Inventory, Inc., can base its decision. The court can consider, among other things, public policy or social
values. Larry enters into a contract with Motivational Education Services to host a panel discussion at a
sales conference. When the conference is postponed indefinitely, Larry asks a court to cancel the contract
and return the parties to the positions that they held before its formation. This request involves rescission.
Charles is a federal judge whose judicial decisions are part of case law, which does not include
interpretations of parties’ subjective motives for engaging in litigation. In the case of Retail Sales Corp.
v. Trucking Delivery Co., the court may rule contrary to a precedent if the court decides that the precedent
is incorrect or inapplicable. In Benny v. City Car Dealership, a state supreme court held that a minor
could cancel a contract for the sale of a car. Now a trial court in the same state is deciding Dora v. Even
Steven Auto Deals, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is
likely to allow the minor to cancel the contract. Judge Bell decides that the precedent for the case she is
hearing is no longer correct due to technological changes. She overturns the precedent when she decides
the case. It is likely that her case will receive a great deal of publicity. Deb and Earl are involved in a
lawsuit. This is an action. In an action against Gina, Harry obtains a remedy. This is the legal means to
recover a right or to redress a wrong. Rachel is a state court judge. Salina appears in a case in Rachel’s
court, claiming that Tomas breached a contract. Possible remedies include an award of damages to
Salina.

The legislature of the state of Wyoming enacts a new statute that sets standards for the liability of
businesses selling defective products. This statute applies in Wyoming only. James and Kay enter into a
contract for the sale of a bicycle, but Kay later refuses to deliver the goods. James asks a court to order
Kay to perform as promised. Ordering a party to perform what was promised is an equitable remedy.
Reba is a state court judge. In her court, legal and equitable remedies have merged. In these
circumstances, distinguishing between these types of remedies is important so that the proper remedy
can be requested. In a suit against Ian, Jenna obtains an injunction. This is an order to do or to refrain
from doing a particular act. In a suit against Ethan, Francisco obtains an award of damages. This is a
payment of money or property as compensation. Bob’s Burgers n’ Shakes Restaurant brings a suit in a
court of law. At one time, a court of law could grant as a remedy only damages. A provision in the
California state constitution conflicts with a provision in the U.S. Constitution. If challenged the U.S.
Constitution, not the state provision, will be enforced. Zoom In, Inc. is engaged in the business of
coding, with an emphasis on Internet marketing, business apps, and intra- corporate networks. In all of
Zoom In’s business activities, it is subject to United States laws and regulations. The basis for all law in
the U.S. is the U.S. Constitution. The North Carolina state legislature enacts a law that violates the U.S.
Constitution. This law can be enforced by no one. Café Espresso is a coffee shop subject to the laws of
Illinois. In Illinois, the highest-ranking (superior) law is a provision in the Illinois constitution. Creamy
Dairy produces award-winning ice cream sold to wholesale distributors, retail sellers, and individual
consumers in all fifty states. The UCC provides a set of rules governing commercial transactions. The
Federal Trade Commission (FTC) is a government agency that issues rules, orders, and decisions. The
Georgia state legislature enacts statutes. The Harrison County Board and the Island City Council enact
ordinances. Administrative law includes the rules, orders, and decisions of the FTC.

The Bay City Planning Department, the Coastal County Zoning Commission, the California
Environmental Quality Agency, and the U.S. Bureau of Land Management issue regulations. These rules
constitute administrative law. Jessie, an employee of Kim’s Restaurant, believes that her employer has
violated her rights in the workplace. Larson argues that a Metro City government agency has imposed a
ordinance that violates his rights under the U.S. Constitution. The branch of law dealing with the
definition and enforcement of all private or public rights is civil law. Rupert is a victim of Sara’s violation
of a criminal law. Criminal law is concerned with wrongs committed against the public as a whole.
Erin believes that a higher, or universal, law exists that applies to all human beings. Erin asserts that each
written law should reflect the principles inherent in this higher law. Erin adheres to the natural law
tradition. The Appellate Division of the New York Supreme Court issues an opinion that can be found at
137 A.D.3d 409, 26 N.Y.S.3d 66. “137” is the number of the volume in the official reports of the
court’s decisions. Jack enters into a contract with Jill’s Farm to provide water for Jill’s irrigation needs.
Jack fails to deliver. Jill initiates a suit against Jack, asking the court to order Jack to perform. Jill is the
plaintiff. Martin Luther King, Jr. played a singular role in the most significant social movement in the
history of the United States—the Civil Rights Movement. King has been chronicled in books and movies,
and is featured on mementoes, some of which are offered for sale by PriceMart Corp. Under the principles
discussed in “A Sample Court Case,” Rosa and Raymond Parks Institute for Self-Development v. Target
Corp., PriceMart’s sale of these items most likely is a qualified privilege.

National Rights Council, a nonprofit organization, files a suit against the U.S. Department of Justice
(DOJ), claiming that a certain federal statute the DOJ is empowered to enforce conflicts with the U.S.
Constitution and with a state constitution. In each situation, which source of law has priority?
The U.S. Constitution is the supreme law of the land. A law in violation of the Constitution, no
matter what its source, will be declared unconstitutional and will not be enforced. Thus the federal
statue does not have priority over the Constitution. The federal statue would have priority over the
state constitution, however, because under the U.S. Constitution, when there is a conflict between a
federal law and a state law, the state law is rendered invalid. In a lawsuit between Cloud Computing
Corporation and Digital Enterprises, Inc., the court applies the doctrine of stare decisis. What is this
doctrine? What does this doctrine have to do with the American legal system? In a common law legal
system, past judicial decisions are binding in current disputes with similar facts. This feature of the
common law, which is the basis of the American legal system, is unique because, unlike the law in
other legal systems, it is judge-made law. Within the common law system, when possible, judges
attempt to be consistent and to base their decisions on the principles suggested by earlier cases. The
body of principles and doctrines that form the common law emerged over time as judges applied
the principles announced in earlier cases to subsequent legal controversies. The practice of deciding
cases with reference to former decisions, or precedents—the cornerstone of the American legal
system—is called the doctrine of stare decisis. Under this doctrine, judges are obligated to follow
the precedents established within their jurisdictions. This helps courts to be more efficient, and
makes the law more stable and predictable.

The role of the courts is to interpret and apply the laws. t. State courts are superior to federal courts. f.
Minimum contacts with a jurisdiction are never enough to support jurisdiction over a nonresident
defendant. f. A court can exercise jurisdiction over property located that is located within its boundaries. t.
A business firm may have to comply with the laws of any jurisdiction in which it actively targets
customers. t. For jurisdictional purposes, corporations are considered legal persons. t. The
minimum-contacts requirement is usually met if a corporation advertises or sells its products within a
state. t. The amount in controversy in a diversity of citizenship case must be more than $1 million
before a federal court can take jurisdiction. f. States do not have exclusive jurisdiction on any matter. f.
Concurrent jurisdiction exists when only state courts have the power to hear a particular case. f. Small
claims courts are inferior trial courts. t. In most states, in suits brought in small claims courts, lawyers are
allowed. t. In many cases, a court can exercise jurisdiction over an out-of-state defendant who has done
business in the state only over the Internet. t. To have standing to sue, a party must be “standing” in the
geographical jurisdiction of the court in which a suit is filed. f. The term venue refers to the location of a
trial. t. A justiciable controversy is a case in which the court’s decision—the “justice” that will be
served—will be controversial. f. Cases arising between citizens of different states involve diversity of
citizenship. t. A state case typically originates in a federal court. f. Trials courts conduct trials. t. The
United States Supreme Court does not have original jurisdiction in any case. f.

Some cases decided by federal courts of appeals are not subject to review by the United States Supreme
Court. f. Litigation is the process of resolving a dispute through the court system. t. The term alternative
dispute resolution refers to methods for resolving disputes outside the traditional judicial process. t.
Negotiation can involve the parties to a dispute and their attorneys. t. Negotiation is the most complex
form of alternative dispute resolution. f. No court offers mediation as an option before a case goes to trial.
f. In mediation, the mediator proposes a solution and makes a decision resolving the dispute. f. Arbitration
that is mandated by a court is often binding on the parties. f. A court’s review of an arbitrator’s award
may be restricted. f. Early neutral case evaluation refers to the resolution of a case
before the dispute becomes contentious, when the parties’ positions are said to be
“neutral.” f. The verdict in a summary jury trial is binding. f. International treaties often stipulate
arbitration for resolving disputes. t. Generally, a foreign court’s decision can be enforced in the United
States. t. Most online dispute resolution services apply international principles promulgated by the United
Nations to resolve disputes. f. A choice-of-law clause is a provision in a contract that excuses a party from
liability for nonperformance due to “acts of God.” f.

The Maine state legislature passes a law to regulate local delivery services. The final authority regarding
the constitutionality of this law is the judicial system. As a judge in a federal court, Elena can decide,
among other things, whether the laws or actions of the executive and legislative branches are
constitutional. The process for making this determination is known as judicial review. Hope wants to file
a suit against Gerry. For a court to hear the case, the court must have jurisdiction. Hua, a resident of
Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jac, a
resident of Kentucky. Jac files a suit against Hua in Indiana. Regarding this suit, Indiana has in rem
jurisdiction. An Oklahoma state court can exercise jurisdiction over Petro Resources Inc., an out-of-state
company, if the firm has minimum contacts with the state. Milo files a suit against Nick in an Ohio state
court, noting that Nick operates a Web site through which Ohio residents have done substantial business
with him. The court is most likely to have jurisdiction over Nick if Milo’s claim arises from Nick’s Web
site activities. David, an Alabama resident, files a suit in an Alabama court against QuickAds, an Internet
company based in Georgia that provides advertising services. QuickAds only contact with persons in
Alabama has been through QuickAds’s passive advertising. The Alabama court is not likely to have
jurisdiction over the case. McHenry, a New York resident, files a suit in a New York state court against
OneWorld Inc., a company based in California. OneWorld’s only contact with McHenry is the company’s
app, which McHenry downloaded while traveling across the United States. According to the sliding-scale
analysis, the factor most likely to confer jurisdiction on the New York court is the degree of interactivity
via the app between McHenry and OneWorld. All Bikes, Inc., a firm in Wisconsin, advertises on the
Web. A court in Ohio would be most likely to exercise jurisdiction over All Bikes if the firm did
substantial business with Ohio residents over the Internet. Mediocrité, Inc., makes and sells goods
that are substandard. Naomi, who has never bought or used a Mediocrité item, files a suit against the firm,
alleging that its products are defective. The company’s best ground for dismissal of the suit is that Naomi
does not have standing. Tyler, a citizen of Utah, files a suit in a Utah state court against Virtual Sales
Corporation, a Washington state company that does business in Utah. The court has original jurisdiction,
which means that the case is being heard for the first time. Stephan wins his suit against Tidewater
Boats, Inc. Tidewater’s best ground for appeal is the trial court’s interpretation of the law that applied to
the issues in the case. Delia files a suit against Eduardo in a Florida state court over the ownership of a
boat docked in a Florida harbor. Both Delia and Eduardo are residents of Georgia. Eduardo could ask for
a change of venue on the ground that Georgia is a more convenient location to hold the trial.

Marty files a suit against Norah in a state court over an employment contract. The case proceeds to trial,
after which the court renders a verdict. The case is appealed to an appellate court. After the highest state
court’s review of Marty v. Norah, a party can appeal the decision to the United States Supreme Court if a
federal question is involved. Kari and Lillian, who are citizens of Mississippi, are involved in a case
related to the adoption of their child. Over this case, Mississippi state courts have exclusive jurisdiction.
Olivia, a citizen of Nebraska, wants to file a suit against Micah, a citizen of Kansas. Their diversity of
citizenship may be a basis for a federal court to exercise original jurisdiction. D’Antoni files a suit in a
federal district court against Enya. D’Antoni loses the suit, appeals to the U.S. Court of Appeals for the
Ninth Circuit, and loses again. D’Antoni asks the United States Supreme Court to hear the case. The
Court is not required to hear the case. The case of Max v. National Credit Co. is heard in a trial court.
The case of O! Boy! Ice Cream Co. v. Pecan Corp. is heard in an appellate court. The difference between
a trial and an appellate court is whether a trial is being held. Carol files a suit against Andy in a state trial
court and loses. Carol can plead her case before an appellate court. Laredo loses his suit against
McLain in a North Dakota state trial court. Laredo appeals to a state intermediate court of appeals and
loses again. Laredo would appeal next to the North Dakota Supreme Court. The Montana Supreme
Court rules against Natural Grocery Mart in a case against One Stop 2 Shop Stores, Inc. Natural Grocery
files an appeal with the United States Supreme Court. The Court does not hear the case. This means that
the Montana court’s decision is the law in Montana. The Kentucky Supreme Court rules against Luther
in a case against Motor Cars, Inc. Luther wants to appeal the case to the United States Supreme Court.
Luther must ask the Court to issue a writ of certiorari. Salina files a suit against Tanner. Before going to
trial, the parties, with their attorneys, meet to try to resolve their dispute. A third party suggests or
proposes a resolution, which the parties may or may not adopt. This is mediation. First Community
Credit Union and General Hydraulics. Inc., have their dispute resolved in arbitration. Before determining
the award, the arbitrator meets with First Community’s representative to discuss the dispute without
GeneralHydraulics’ representative being present. If this meeting substantially prejudices General
Hydraulics’ rights, a court will most likely set aside any award. Sforza files a suit against Thieu. If this
suit is like most cases, it will be settled before a trial. Liz and Moss disagree over the amount due under
their contract. To avoid involving any third party in the resolution of their dispute, Liz and Moss might
prefer to use the alternative dispute resolution method of negotiation. Farmers Pantry Products Inc. and
Market Grocers LLC dispute a term in their contract. If Farmers Pantry and Market Grocers have a
long-standing business relationship that they would like to continue, they may prefer to settle their dispute
through mediation because the process is not adversarial. If Cornel and Deanna resolve their dispute by
having a neutral third party render a binding decision, they will have used the method of arbitration. SPF
Sunscreen Corporation and Taylor agree to resolve their dispute through arbitration. The arbitrator’s
decision is called an award. Sour Dough Inc. and The Bread Company, agree to a contract that includes
an arbitration clause. If a dispute arises, a court having jurisdiction may order a party to submit to
arbitration. Cullen files a suit against Demi. Cullen and Demi meet, and each party’s attorney argues the
party’s case before a judge and jury. The jury presents an advisory verdict, after which the judge meets
with the parties to encourage them to settle their dispute. This is a summary jury trial. Service
Employees International Union and Timberline Products, Inc., have their dis-pute resolved in arbitration.
The arbitrator arbitrates issues that the parties did not agree to submit to arbitration. This is a ground for a
court to set aside the award. Millie and Noble dispute the quality of a suite of furniture sold over the
Internet. They agree to resolve their dispute in OpenTerms.com, an online forum. Like most online
forums, OpenTerms.com applies general, universal legal principles. To resolve a dispute in nonbinding
arbitration, Alyson in Baltimore and Chuck in Denver utilize E-Resolve, an online dispute resolution
(ODR) service. This limits these parties’ recourse to the courts not at all. Quest Inc., a U.S. firm, and
Real Treks, Ltd., a Canadian firm, enter into a contract that does not have a forum- selection or
choice-of-law clause. Litigation between Quest and Real Treks involving this contract may occur in
Canada, the United States, or both.

There is one uniform set of rules of procedure for all courts. f. Procedural law is irrelevant with respect to
a person’s ability to pursue a legal claim. f. Before a lawsuit begins, the court must have proof that the
defendant was notified of the lawsuit. t. A counterclaim is raised by a plaintiff against a defendant’s
answer. f. A default judgment is entered against a party only on proof that he or she was at fault in the
matter at issue. f. Service of process is the process of obtaining information from an opposing party before
trial. f. An answer can deny the allegations made in a complaint. t. Any relevant material, including
information stored electronically, can be the object of a discovery request. t. In most states, if neither party
requests a jury, the court presumes the parties waive this right. t. At the beginning of a trial, only the
defendant’s attorney makes an opening statement. f. A person directly involved in the events concerning a
lawsuit is known as an expert witness. f. A jury instructs a judge in the law that applies in a case. f.
Interrogatories are written questions for which written answers are prepared by a judge. f. Discovery is
the process of obtaining information from an opposing party before trial. t. The use of evidence outside
the pleadings distinguishes the motion for summary judgment from the motion for judgment on the
pleadings. t. Before a trial, the plaintiff can file a motion to dismiss. t. Only a defendant can file a motion
to dismiss. f. A summary judgment is issued only if there is no genuine question of fact. t. A motion for
summary judgment may be made before, during, or after a trial. f. Only a defendant may file a motion for
summary judgment. f.

If a discovery request involves confidential business information, the scope of the request can be limited.
t. Voir dire refers to the seriousness of the controversy in a case. f. Hearsay evidence is testimony
someone gives in court about a statement made by someone else who was not under oath at the time. t. An
appellate court can reverse the decision of a trial court that erred. t. A trial begins with the plaintiff’s
attorney’s direct examination of the first witness. f. When a defendant finishes introducing evidence, the
trial is concluded. f. A motion for a directed verdict is also known as a motion for judgment as a matter of
law. t. A motion for a new trial will be granted only if the trial judge feels that it is appropriate to grant a
judgment for the other side. f. No party can appeal a judge’s ruling on a pretrial motion. f. Either party
may appeal a jury’s verdict but only the plaintiff may appeal a judge’s ruling. f. A case is remanded when
it is sent back to a trial court for further proceedings consistent with the opinion of the appellate court. t.
The expenses associated with an appeal can be considerable. t. A court of appeals re-hears all of the
evidence introduced at trial. f. A reviewing court may reverse a trial court’s judgment only in a case in
which the plaintiff lost. f. It is guaranteed that any judgment will be enforceable. f.

CHAPTER 9 REVISION: Emily retains Michael, an attorney, on a contingency-fee

basis to seek $1 million in damages in a personal-injury suit against Prescription Pharmaceuticals Inc.
Emily wins. She must pay Michael’s fee, court costs, and other expenses. Isabel and Josh engage in a
business transaction that leads to a dispute. Isabel initiates a lawsuit against Josh by filing a complaint.
The sheriff serves Josh with a summons. If Josh chooses to ignore it, Isabel will have a judgment
entered in her favor. Ballpark Sportsfield, Inc., files a suit against Concessions & Tailgate Services. The
document that informs Concessions & Tailgate that it must file an answer within a specified time period is
the summons. Pad, Pod & Phone Accessories LLC (3PA) makes “PacBacs,” a famous brand of cases for
electronic devices. Without 3PA’s consent, Offshoot Rip-Offs Inc. begins to use “pacbacs” as part of a
domain name. 3PA files a suit against ORO. Service of process for this suit must provide notice of the
lawsuit. Sweet Lemonade, Inc., disputes the use of “sweet-lemonade.com” as a domain name by Sweet
Citrus Beverages, Ltd., and files a suit to resolve the dispute. Service of process must be by whatever
means is reasonably calculated to do the job. In a suit by the National Forest Preservation Organization
(NFPO) against Old Growth Logging, Inc., NFPO serves a written request for Old Growth to admit the
truth of matters relating to the trial. Old Growth’s admission in response is the equivalent of an
admission in court. Gilbert wants to initiate a suit against Healthways Insurance Company by filing a
complaint. The complaint should include a statement alleging the facts showing the court has
jurisdiction. Gabrielle files a suit against Hard ‘n Fast Adhesives, Inc. Hard ‘n Fast responds that even if
Gabrielle’s statement of the facts is true, according to the law Hard n’ Fast is not liable. This is a motion
to dismiss. Sofia files a suit against Turista Airlines, Inc. Turista responds that it appears from the
pleadings that the parties do not dispute the facts and the only question is how the law applies to those
facts. Turista supports this response with witnesses’ sworn statements. This is a motion for summary
judgment. Ballpark Sportsfield, Inc., files a suit against Concessions & Tailgate Services. The document
that informs Concessions & Tailgate that it must file an answer within a specified time period is the
summons. Pietro files a suit against Qiana. If Qiana fails to respond, Qiana will have a default
judgment entered against her. Lyn files a suit against Karl. Karl denies Lyn’s charges and sets forth his
own claim that Lyn breached their contract and owes Karl money for the breach. Karl’s claim is a
counterclaim.

Destiny and Enzo engage in a business transaction. When a dispute arises, Destiny initiates a lawsuit
against Enzo by filing a complaint. If Enzo files a motion to dismiss, he is asserting that Destiny did not
state a claim for which relief can be granted. Mountain States Trucking wants to initiate a suit against
Open Pit Mining Corporation by filing a complaint. The complaint should include a statement alleging the
facts establishing Mountain’s basis for relief. Daniel files a suit against Ava, alleging that she failed to
pay him for two months’ labor at her Choice Cheese Factory. Ava denies the charge and claims that
Daniel breached their contract to produce a certain quantity of cheeses and owes Ava damages for the
breach. Ava’s claim is a counterclaim. Madison files a complaint in a suit against Christopher, and he
files an answer. The case may now be dismissed or settled. Renewable Resources, Inc., files a suit
against Sunrich Utility Company and seeks to examine certain documents in Sunrich’s possession. A
legitimate reason for this examination is that the documents contain information that is relevant to the
case. To prepare for a trial between Fones, Inc., and G-Bytes Company, G-Bytes’s attorney places Fones’s
chief executive officer (CEO) under oath. A court official makes a record of the attorney’s questions and
the CEO’s answers. This is a deposition. During the trial phase of Sof’ Drink Corporation’s suit against
TimeOut Stores, Inc., their attorneys engage in voir dire. This is the selection of jurors. In Research &
Development Company’s suit against Structural Engineers, Inc., Research & Development wants to
introduce evidence that it claims is relevant. Relevant evidence is evidence that establishes the degree of
probability of a fact or action; tends to disprove a fact in question;
tends to prove a fact in question all of the choices. Bibi brings a lawsuit against Cocteau over an
allegedly defective shipment of machine parts. During the trial, Bibi’s attorney asks questions of Bibi’s
witness Drummond. This is hearsay. Sara brings a lawsuit against Tucci over a sale of 1,500 acres of
ranchland. During the trial, Tucci’s attorney asks questions of the plaintiff’s witness Ulysses. This is a
cross-examination.

Kent’s witness Lois is not an expert in the matter about which she is being questioned. Lois can testify
only about what she personally observed. Lacey files a civil suit against Mischa. To succeed, Lacey
must prove her case by a preponderance of the evidence. In Precise Paving Company’s suit against
Ride, Park n’ Go, Inc., the jury returns a verdict in Precise Paving’s favor. The company will most likely
ask the court to enter a judgment in accordance with the verdict. In Fuel Injection Products & Service
Corporation’s suit against Gears & Cylinders, Inc., the jury returns a verdict in Fuel Injection’s favor.
Gears & Cylinders files a motion asking the judge to set aside the verdict and begin new proceedings.
This is a motion for a new trial. In Coastal Fishing Company’s suit against Dockside Marina, Inc., the
jury returns a verdict in Coastal’s favor. Dockside files a motion stating that even if the evidence is
viewed in the light most favorable to Coastal, a reasonable jury should not have found in its favor. This is
a motion for judgment n.o.v. Garvey files a suit in a state court against Hi-Rise Apartments. At the
conclusion of Garvey’s case, Hi-Rise files a motion asking the judge to direct a verdict for the defendant
on the ground that Garvey has presented no evidence to support his claim. This is a motion for a
judgment as matter of law. Calvert files a suit in a state court against Denny, seeking an amount of
allegedly unpaid rent for an office that Denny leased and later vacated. If Denny losses the suit and
decides to appeal, his attorney must file, with the clerk of the trial court, within a prescribed period of
time a notice of appeal. Dirt Machines Inc. files a suit in a state court against Earth Movers Inc., claiming
that the defendant leased and failed to return a bulldozer. The case proceeds to trial, after which the court
renders a verdict. If Earth Movers to, and files a brief with, a state appellate court, Dirt Machines’s
attorney may file within a prescribed period of time an answering brief. New Cuisine Café files a suit in
a state court against Olive Oil Inc., alleging a breach of contract. The case proceeds to trial, after which
the court renders a verdict. If New Cuisine decides to appeal to a state appellate court, its attorney must
file, with the clerk of the appellate court, within a prescribed period of time a copy of the record on
appeal. In Hazel’s suit against Ingrid, the court issues a judgment in Ingrid’s favor. If the case is appealed
to an appropriate court of appeals, the appellate court will hear none of the evidence. Bull files a suit
against Clay in a state court over payment due on a short-term lease of grazing land. The case proceeds to
trial, after which the court renders a verdict. The case is appealed to an appellate court. After its review of
Bull v. Clay, the appellate court upholds the lower court’s verdict. The appellate court has affirmed the
case. Dawn files a suit in a state court against Entrée Enterprises Inc., alleging the breach of an
employment contract. After a final determination in the case of Dawn v. Entrée Enterprises Inc. in favor
of Dawn, the judgment will be satisfied if Entrée pays the judgment. Faye files a suit in a state court
against Gas Station Stop, claiming employment discrimination. Gas Station loses the suit and appeals.
After the state’s highest court’s review of Faye v. Gas Station Stop, either party can appeal the decision to
the United States Supreme Court if a federal question is involved.

Lark promises to buy Mac’s used textbook for $60. Lark is a promisor. Smith & Jones, Accountants,
agrees to perform an audit for Brick & Mortar Stores, Inc. Whether or not this agreement meets all of the
requirements of a contract, the parties are likely to follow the rules of contract law because they want to
avoid potential disputes. Jim tells Dana that he will take her out to lunch on Thursday. Jim has made
Dana a promise. In a divorce proceeding, Jonas promises to pay a certain amount of child support to
Kelly every month until their daughter Lois is eighteen years old. Jonas’s obligation with respect to this
promise is legal and moral. Movers LLC promises to deliver a certain couch to Nora, who promises to
pay for the service. If Movers does not perform, it may be required to pay money damages. Bob claims
that Carla breached their contract for tutoring. Carla responds that she never intended to enter into a
contract with Bob. The intent to enter into a contract is determined with reference to the objective theory
of contracts. Foster promises to buy Gideon’s trumpet for $75. Gideon is a promisee. Evie agrees to
work for Far East Shipping, Ltd., as a translator. In determining whether a contract has been formed, an
element of prime importance is the parties’ intent. Pavers, Inc., contracts with a QuikStop store to repave
the store’s parking lot for a certain price. The requirements of this, and any other, contract include
consideration. K’Nect, Inc., makes an offer to Lori to enter into a contract to work as a salesperson for a
certain salary plus commission for ninety days subject to a one-year renewal based on her performance.
Lori accepts the offer. A valid contract requires an offer and an acceptance. Field Construction, Inc.,
contracts with Mesa Ranch to build a new horse barn on Mesa’s property for which Mesa agrees to pay.
The elements of this, and any other, contract include legality. Moe asserts that a deal he entered into with
Nina to sponsor and host a motivational conference for independent sales representatives is an
unenforceable contract. Defenses to the enforcement of a contract include the lack of a party’s
voluntary consent. Jan tells Lee she will give him her old car if he babysits her son Mark weekday
evenings for six months. Lee agrees. Jan and Lee have formed a bilateral contract.
Ray promises to give Steve his iPod in exchange for Steve’s promise to pay Ray $50. Later, they
exchange the device for the funds. A contract was created when Steve promised to pay Ray for the
iPod. On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of
tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil
says that he has changed his mind. These parties had a unilateral contract as soon as Outdoor began to
perform. Wilson buys a lottery ticket. Wilson has accepted an offer for a void contract. Ren offers to pay
Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer
only by completing the task within the deadline. If she does, Ren and Sara will have a unilateral
contract. Clay offers to pay Dian $50 for a golf lesson for Ewan. They agree to meet on Friday to
exchange the cash for the lesson. These parties have a bilateral contract. Lane applies for a firefighter’s
job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter
also states that it is “an employment offer conditioned on the applicant passing the exam.” This is a
unilateral contract that Lane can accept by passing the exam. Bo signs a lease with Capri Apartments
to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri’s behalf. Bo and
Capri have an express contract. On behalf of the jazz group Fusion, their manager Greg agrees to a
performance in Hillside Amphitheatre on July 4. Hillside sends a written copy of the agreement to Greg to
be signed. If Greg signs the copy, the parties will have an express contract. Vicky asks Walt, a cobbler,
to repair a pair of boots. There is no discussion of a price, and Vicky and Walt do not sign any documents.
After the repair, Walt hands Vicky a bill. With respect to Vicky’s obligation to pay the bill, this is an
implied contract. When a rainstorm erupts outside Rita’s Gift Shop, Rita and Shaw enter into an implied
contract to split the revenue from Shaw’s sale of umbrellas to Rita’s customers. The terms of this contract
are defined by the conduct of the parties. Flo tells Ginger during a phone call that she will buy her
textbook from last semester for $65. Ginger agrees. These parties have an express contract. Marketing
Inc. offers to create a campaign to increase N’Ice Creamery, Inc.’s online business. N’Ice agrees to pay
for the service. These parties have an express contract. Oceans Inc., a seafood distributor, agrees to buy
from Paul, a commercial fisherman, any “overstock” of fish that Paul catches in excess of his legal limit.
This agreement is most likely void. Sales Corporation and Real Properties, Inc., agree to the payment of a
commission for the sale of certain property. If this deal has all of the elements necessary for one of the
parties to enforce it in court, it is a valid contract.

A letter-of-credit agreement between Rural Feed Corporation and Soy Farms, Inc., requires Rural’s bank
to pay Soy on receipt of invoices. This is a formal contract. Rough Water, LLC, and Schafer enter into a
contract for the delivery of a used kayak. Until the kayak is delivered and paid for, these parties have an
executory contract. Francie drives into Gage’s Auto Service and asks Gage to replace a tire on her car.
After Gage replaces the tire, but before Francie pays for it, any contract between them is executory.
Robin claims that her contract with Stroud for tennis lessons is voidable. If their contract is avoided both
parties are released from it. Jess, a nurse practitioner, renders aid to Kurt, who is injured and
unconscious. Jess can recover the cost of the aid from Kurt as if the parties had entered into an actual
contract. Leila enters into a contract with Metro Taxi Company to work as a cabdriver. Under the plain
meaning rule, if the contract’s writing is clear and unequivocal, the meaning of the terms must be
determined from only the face of the instrument. Susan enters into a contract with Troy to act as his
personal sports trainer. If a dispute later arises and the contract contains unclear terms, the rules of
contract interpretation will give effect to the parties’ intent as expressed in their contract. Francisca
and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a
wedding and reception. If ambiguities appear in the contract, they will be construed against the party who
drafted the contract.

Fresh Service, Inc., offers to deliver produce to Growers’ Market’s customers for a certain price. Fresh’s
intent to extend a serious offer to Growers’ Market is determined by reference to Fresh’s words and
conduct. Maya tries to start her new car with no success. She yells that she will sell the car to anyone for
$10. Nero, a passerby who owns Nero’s Motors, hands Maya $10. This is not a valid acceptance
because Maya does not seriously intend to sell. An ad on the NewsNow Web site asks viewers to “send
us your story and we might share it with the world.” Ollie submits a manuscript, adding, “I accept your
offer.” Between NewsNow and Ollie, there is no contract. Anton tells Brooke, who has no knowledge of
Shakespearean comedy, that he will tutor her in the subject for $50. As an offer, this is effective. Idina
admires Jules’s collection of guitars. July says, “I plan to sell the collection when I get tired of it.” Jules’s
statement is not an offer because July expressed only an intent to enter into a future contract. Jon
says to Kris, “I would like to sell you my sports memorabilia collection.” This is not an offer because it
only invites Kris to negotiate. Pastries, Inc., sends its catalogue to Rollo and includes a “personalized”
letter inviting the purchase of any item at the advertised price. This is not an offer. Laredo advertises a
reward for the return of his lost dog. Miguel, who does not know of the reward, finds and returns the dog,
without asking for reward. Miguel cannot recover the reward, because he did not know of the reward
when he returned the dog. On May 1 Ralph offers to cure and smoke Sam’s pork. On May 3 Ralph
mails Sam a letter revoking the offer. Sam receives the letter on May 5 and responds on May 6. Ralph’s
revocation of the offer became effective on May 5. Rhonda asks Steve, “Do you want to buy me to repair
your fishing net?” This is not a valid offer because the terms are not definite.

KEY IDEAS FOR CHAPTER 9 (revision): Simone offers Thom a dozen

piano lessons for a certain price per lesson but conditions the deal on Thom accepting the offer by April 1.
Simone may revoke the offer before Thom accepts the offer. Lauren files a suit against Moving Service
for breach of contract, based on what Lauren claims was Moving’s offer. For a court to determine if a
contract has been breached, under the common law, the offer must include terms that are reasonably
definite. Fix-It-Quik, Inc., offers Gina a job as a plumber. No time for acceptance is specified in the offer.
The offer will terminate after a reasonable period. Business Properties, Inc. (BPI), offers to sell a cold
storage warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer
open for three business days. This makes the offer irrevocable for three days if BPI accepts. Nevin
negotiates a deal for the sale of twenty-five acres of farmland to Otis. Nevin promises to hold the offer
open in return for a small payment but does not state an exact period of time. With respect to this offer a
reasonable period of time is implied. Lou offers to service Millie’s heating and air conditioning system
for one year for $500. Under the mirror image rule, Millie’s response will be considered an acceptance if
the terms of the acceptance exactly mirror those of the offer. Fabien offers to sell his Graphic Signs,
LLC, business to Hanna for $100,000. Hanna replies, “The price is too high. I will buy it for $75,000.”
Hanna has rejected the offer and made a counteroffer. Rafi offers a tour of Bay Harbor aboard his
sailboat, Sea Siren, to Tiara’s Travel Group for $500. Referring to the prices for similar tours, Tiara’s
says, “We’ll pay no more than $400.” Rafi’s offer is terminated. Coffee Brokers, Inc., offers to buy
Dining Company’s coffee-roasting services for a certain price. Dining responds that the price is too low
and thereby rejects the offer. The offer is terminated. Wally offers to repair and service a forklift for Valu
Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally’s death terminates the offer.

Example 10: Gayla tells Franco that she will pay him $50 to haul the trimmed tree limbs and other lawn
debris from her property. Franco’s acceptance is complete only after he hauls away the debris. Shelby
offers to make digital copies of Relay Company’s business conference videotapes, CDs, DVDs, and other
media for $500. Under the mailbox rule, Relay’s acceptance by e-mail will be considered effective when
sent. Pacific Charter Company offers to provide an air-conditioned bus to Quincy’s tour group for $1,500
plus the cost of the fuel. The mailbox rule applies if Quincy accepts the offer by regular mail. Green
River Gas Company offers to sell Far East Energy, Ltd., a certain quantity of liquefied natural gas. If Far
East sends an acceptance via Green River’s authorized mode of communication, it will be effective when
it is sent. Rico, a user of SmartPhoneApps.com’s Web site, can download apps for free if he first clicks on
“I accept” after viewing certain terms. This is a contract that includes the terms. Bret buys a
subscription to the catalog of music provided by Concerto, an online music vendor. Before accessing the
catalog, Bret must agree to a provision stating that she will not make and sell copies of the music. This
provision is a click-on agreement. Due on Receipt, Inc., makes tax software, which is packaged with a
shrink-wrap agreement. Evenflo Products Company distributes the software to retailers, including a
Flatprice discount store, where Greta buys a package of it. The parties to the shrink-wrap agreement are
learns of it after the contract is formed. Global Corporation enters into contracts with buyers in
e-commerce and traditional commerce. The UETA applies, if at all, only to those transactions in which
the parties agree to use electronic means. Waste Management Corporation enters into contracts for its
services online. Waste Management can protect itself against disputes involving these contracts by
making important terms reasonably clear. Play-It-Loud, LLC, provides music-streaming services online
subject to complex pricing schedules. To control specific offers for the services and thus the resulting
contracts, important terms to provide online include a provision relating to the resolution of any
dispute. Archway Architects, Inc., makes travel arrangements online and stores the confirming
documents and receipts on its servers. Under the UETA, “information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is retrievable in perceivable form” is a
record. Dispatch Corporation and Hauling, Inc., agree in advance to terms that apply to their future
e-transactions. This is a partnering agreement. Megan gives out a business card with an e-mail address
on it. It is reasonable to infer that Megan has consented to transact business electronically. Grain Farms
and Hi-way Shipping Company make a deal for Hi-way’s services, communicating entirely online. Under
the UETA, an electronic record of their deal is considered sent when it leaves the sender’s control. Orb,
Inc., does business online around the globe. The United Nations Convention on the Use of Electronic
Communications in International Contracts and other international agreements improve global
commercial certainty by all of the choices: determining an Internet user’s location for legal purposes;
providing that e-signatures are the equivalent of signatures on paper; providing for the recognition of
judgments by other nations’ courts.

Alienation is a transfer of land ownership. tAll rights can be assigned with no exceptions. fAn insurance
policy is an example of a right that can be assigned. fRights to receive funds can be assigned. tAn
assignment of rights in real estate often cannot be prohibited. tIn most cases, a contract that prohibits its
assignment cannot be assigned. tContract duties are not assigned—they are delegated. t Giving notice is
legally necessary to establish the validity of an assignment. f The assignment of the same contract right to
two different parties automatically cancels both assignments. f

Example 11: A special form is required to create a delegation of duties. False/ A delegation relieves the
party making it of the obligation to perform. fAll that a delegator needs to do to make a delegation
effective is to express an intention to make the delegation. t There are no exceptions to the rule that any
duty can be delegated. fNo contract can prohibit delegation of the duties of the contract. fAn “assignment
of all rights” creates an assignment of rights and a delegation of duties. True/ An intended beneficiary can
sue directly to enforce a promisor’s promise. tBoth intended and incidental beneficiaries acquire legal
rights in a contract. f The rights of a third party beneficiary under a contract do not vest if the third party
materially changes his or her position in justifiable reliance on the promise. True

An incidental third party beneficiary cannot sue to enforce the contract because the benefit is
unintentional. tAn intended third party beneficiary cannot enforce the contract against the original parties
once the rights of the third party have vested. f Expressly designating a third party as a beneficiary in a
contract does not indicate whether the beneficiary is intended or incidental. f If a third party has the right
to control the details of contract performance, the third party is an incidental beneficiary. f A third party’s
right to control the details of performance of a contract indicates that the third party is an intended
beneficiary. True/ A creditor beneficiary is any third person who receives a benefit from a contract even
though that person’s benefit is not the reason the contract was made. f If a contract requires that
performance be rendered directly to a third party, the third party is an intended beneficiary. f

Case study 12: Rachel and Stuart enter into a contract for the sale of Rachel’s textbook at the end of
the fall semester for which Stuart agrees to pay $75. Rachel wants to transfer her right to payment for the
book to Terry. This transfer is an assignment. a delegation an alienation a third-party beneficiary contract
Revenue & Sales Corporation and Software, Inc., enter into a contract for the design of custom software
for which Revenue & Sales agrees to pay $64,500. Software transfers the right to payment under the
contract to CreditLine LLC. CreditLine is an assignee. n assignor. a third-party beneficiary. a delegatee.

Merry Music Inc. and Nina enter into a contract for Nina to write six songs for which Merry Music agrees
to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer
of rights, Nina is an assignor. a delegator. an obligor. a third party beneficiary. Illya owes Jenny
$1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal
with Kasey to Jenny. Illya’s right to the $1,000 is then extinguished.

Example 12: Retail Outlets, Inc., contracts with Smooth Paving Inc. to grade and pave a parking lot.
Smooth assigns the contract to Tough Road Company, which has a poor record of completing projects.
Retail could most successfully argue that the contract cannot be assigned because the assignment will
materially increase the risk of nonperformance. Retail did not consent to the assignment. Retail did not
receive adequate consideration for the assignment. Tough Road was not an original party to the deal./
Gavin takes out an insurance policy on her car. Gavin can assign his policy to a third party under no
circumstances. under any circumstances. as long as he does so in writing. if a court approves the
assignment. Ben and Ivy enter into a contract under which Ben agrees to cater Ivy’s wedding in exchange
for a cash down payment. The contract expressly prohibits any transfer of rights. A contract right may be
transferred, however, if the transfer involves. a right to receive payment. a right to Ben’s services. rights
under Ivy’s insurance policy against Ben’s failing to perform. a right whose transfer is otherwise
expressly prohibited by statute.

Marco and Fred enter into a contract for the sale of Marco’s apartment for which Fred agrees to pay him
$100,000. Marco cannot prohibit Fred from transferring his right to the ownership of the apartment
because such a prohibition is against public policy. immoral. unconscionable. a crime. A contract
between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is
“void.” This ordinarily prohibits any assignment. no assignment. only an assignment of contract rights
to personal services. only an assignment that would change the obligor’s risk. Eli owes Martin $10,000.
Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns
the same claim to Allen. Allen immediately notifies Eli of the assignment. Allen has priority to
payment in states that follow the English rule. c. does not have priority to payment in any state.

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment is
not required. Phillip assigns his rights under a contract with Maria to his college roommate, Owen.
Neither Phillip nor Owen notifies Maria of the assignment. The assignment is immediately effective. Joy
and Kris enter into a contract for Kris to lay sod in Joy’s yard for which she agrees to pay Kris. When
Kris’s schedule conflicts, she contacts Leza, to whom Kris “assigns all rights under the contract.” Kris is
liable to Joy if Leza does not perform. Market Company and Nick enter into a contract for Nick to cut
and trim the landscaping around Market’s building before a meeting of the company’s sales staff. When
Nick’s schedule conflicts, he asks Otis to do the cutting and trimming. This transfer of duties is a
delegation. an assignment. a third party beneficiary contract. alienation. Bill and Charlene enter into a
contract for the clearing, plowing, and preparing of Charlene’s 100-acre tract for which she agrees to pay
$1,000. Bill transfers his duty under this contract to Dewey. Dewey is a. a delegatee. b. an assignee. c. an
obligee. d. a delegator. Uri and Victor enter into a contract by which Uri promises to deliver business
cards, advertising banners, and other marketing materials to Victor. Uri later transfers his duty under the
contract to Wren. Uri is a. a delegator b. a delegatee. c. an assignor. d. an assignee.

Chapter 10: Laramie contracts to provide cattle-herding services to Miles for $1,400 per month.
Laramie cannot transfer this duty a. under any circumstances. without continuing to be potentially
liable. c. without Miles’s consent. d. without paying Miles at least one monthly fee. /Pico, a famous chef,
agrees to give ten culinary lessons to Rhoda in exchange for $1,200. Pico’s attempt to transfer his contract
duties to Sven, an unknown sous-chef, will probably be prohibited if Pico and Sven have different skill
levels. permitted because contracts may be freely delegated. permitted because the contract is concerned
with cookery. prohibited because contracts may not be freely delegated. Ilene and Jerry enter into a
contract under which Ilene agrees to provide grounds keeping services for Jerry’s Family Fun Center.
Under an anti-delegation clause, the contract can prohibit and prevent the transfer of all duties under the
contract. Leon contracts to install automatic watering troughs in Kendall’s dairy barn. Leon then
becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up
to install the troughs. Kendall can sue Jake or Leon. D’Alemberte contracts with Elias to render
personal nursing services for the benefit of Federica. This is. a delegation. a third party beneficiary
contract. Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda’s Buns n’ Burgers in
exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is an
intended beneficiary. Bea takes out a life insurance policy with Vida Insurance Corporation that names
her spouse Wendell as the beneficiary. This is a third party intended beneficiary contract.

Business Loans, LLC, is a creditor beneficiary in a deal that involves Carla’s Hair Salon and Dani’s Nails.
Like most creditor beneficiaries, Business Loans is an intended beneficiary. Four-Square Construction
Company enters into a contract with Ben to remodel Carol’s Home Store, using products from Delta
Building Supplies.. Halfway through the project, Four-Square refuses to finish the job. The contract can
be enforced against Four-Square by Ben or Carol’s. Delta will realize a profit from the sale of products to
Four-Square to remodel Carol’s store. Delta is an incidental beneficiary. Paolho and Roth agree that
Paolho will fix Roth’s boat dock in exchange for $5,000. Paolho spends half of the amount due under the
contract to acquire the materials for the job from Sav-U Economy Lumber. Sav-U is an incidental
beneficiary. a delegatee. an intended beneficiary. an assignor. Ozzie contracts for the sale of 500 shares of
stock in Premium Quality, Inc., to Ray, with payment to go to Scholar University to pay Thalia’s tuition.
The contract reserves to Ozzie and Ray the right to modify its terms. Scholar’s right to payment is
subject to any change that Ozzie and Ray make. not affected by the reservation. limited only if Thalia
agrees to any changes. terminated by the reservation. App Developers, Inc. (ADI), enters into a contract
with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract,
ADI hires Max and ten other student interns. With respect to the contract, Max is an incidental
beneficiary. Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit
on Hilda’s daughter Jackie as the designated beneficiary. Jackie’s rights under the contract will vest if she
demonstrates her consent to the promise at Hilda’s request. automatically.
 if Indemnity attempts to modify the terms of the contract. on the occurrence of the event for which the
insurance was procured. Mai is a third party beneficiary under a contract between Novia and Opie. Novia
and Opie can modify or rescind their contract without Mai’s consent before Mai’s rights have vested. at
any time. at no time. after Mai’s rights have vested.

Logan borrows $150,000 from Ready Money Credit & Debit to buy new equipment for Logan’s
Steakhouse. When Logan does not pay the loan, Ready Money wants to transfers the right to the payment
to Action Collection Agency. Action Collection agrees to pay Ready Money for this right, but for a price
that is less than the amount owed. Can Ready Money transfer this right to Action Collection without
Logan’s consent? If so, and Ready Money committed fraud in the deal with Logan, could Logan
legitimately refuse to pay Action Collection? Explain. Ready Money can transfer the right to receive
Logan’s payment in an assignment to Action Collection.
The parties in an assignment are the assignor, the assignee, and the obligor. The party originally
entitled to the payment of the money is the assignor (Ready Money), the party who agreed to pay is
the obligor (Logan), and the party who receives the right to the payment is the assignee (Action
Collection). The obligor’s consent is not necessary for an effective assignment. On an assignment,
the rights of the assignor are extinguished, and the assignee has a right to demand performance—in
this question, payment—from the obligor. The assignee takes only those rights that the assignor
originally had, however, subject to the defenses that the obligor has against the assignor. Thus, if
Ready Money fraudulently procured the right to Logan’s payment, Logan can raise this fraud as a
defense against payment to Action Collection.

Delany & Sons, Inc., owes Evermore Bank $50,000. Delany enters into a contract with Floyd under which
Delany promises to manage and oversee Floyd’s Seaside Marina. Under the contract, Floyd promises to
pay Evermore the amount that will be due Delany until his debt to Evermore is paid. Delany performs as
promised, but Floyd does not pay the bank. Can Evermore succeed in a suit against Floyd? Why or why
not? Evermore could succeed in a suit against Floyd.

When a party promises to perform under a contract with the express intent that the other party’s
payment benefit a third party, the third party is a creditor beneficiary. Assuming a contract is
otherwise enforceable, a creditor beneficiary can successfully sue to enforce the contract to which
he or she is a third party. The contract between Delany and Evermore expressly states that
Evermore’s payment for Delany’s performance is to go directly to Floyd. Thus, it is a third party
beneficiary contract. Floyd, the intended third party beneficiary, is, under the terms of the contract,
a creditor beneficiary. As such, Floyd can successfully sue Evermore to enforce Evermore’s promise
to pay Delany’s debt.
Chapter 11: The most common way to discharge contractual duties is by breach of contract. fIn
most contracts, promises of performance are not expressly conditioned. tAn express condition is often
prefaced by the word if, provided, after, or when. True/Courts may imply conditions from the purpose of a
contract or from the intent of the parties. tA condition that must be fulfilled before a party’s promise
becomes absolute is a condition subsequent. f A condition is a qualification in a contract based on a future
event that is certain to occur. fA contract comes to an end when both parties fulfill their respective duties
by performing the acts they have promised. tWhen a party’s performance is perfect, it is said to be
complete. tA material breach occurs when performance is substantial, but not complete.
False/Performance can be accomplished by tender. True/An intentional failure to comply with the terms
of a contract is not a breach. fA contract is substantially performed when performance creates
substantially the same benefits as those promised in the contract. tMost contracts need to be performed
only to the satisfaction of a reasonable person unless they expressly state otherwise. tAnything less than
complete performance is a material breach of contract. fAny breach discharges the nonbreaching party
from the contract. f Any breach allows the nonbreaching party to sue for damages. tA contract for medical
work is not a personal contract. f

5 loại terminate contracts: Chapter 11 Revision: Anticipatory

repudiation discharges the repudiating party’s obligations under a contract. fIf no time for performance is
stated in a contract, a reasonable time is implied. t Only personal contracts can be discharged by
agreement of the parties. fWhen an anticipatory repudiation occurs, it is treated as a material breach of a
contract. tTo rescind a contract, the parties must make a second agreement that satisfies the legal
requirements for a contract. T Contracts that are executory on both sides can be rescinded by agreement.
tA novation occurs when there is a substitution, by agreement, of a new contract for an old one, with the
rights under the old one being terminated. tA novation requires the existence of a previous, valid
obligation. T The law allows an innocent party to be discharged when the other party has materially
altered a written contract without consent. t A contractual obligation may not be discharged through
novation. F Subjective impossibility of performance can discharge a contract. f After a contract is made, a
supervening event may make performance impossible and discharge the contract. T An occurrence or
event that makes performance temporarily impossible operates to discharge the parties’ contractual duties.
F A contract will be discharged if unforeseeable circumstances make it impossible to attain the contract’s
purpose. tObjective impossibility discharges a contract. T

When a contract party materially alters a written contract without consent, the other party must adapt his
or her performance accordingly. f A discharge in bankruptcy will ordinarily allow a creditor to
subsequently enforce the debtor’s contract. f When a change in the law renders the performance of a
contract illegal, the nonperforming party is normally held in breach of contract. f
Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and
Leony agree to sign a bill of sale. exchange the car for the $3,000.
sign a receipt. shake hands and go their separate ways. / Even-Bilt Construction contracts to build a
warehouse for Discount E-Sales Company. Even-Bilt completely performs. Discount E-Sales is entitled to
nothing more. / Stephanie enters into a contract to work as a lifeguard at Tim’s Water Park for the
summer in exchange for a weekly paycheck and free admission to the park’s attractions. If the duties
under this contract are discharged like those under most contracts, the duties will be performed. Dharma
enters into a contract to manage the operations of Esther’s dental office for one year, renewable for
subsequent one-year terms. If this contract is discharged like most contracts, it will be performed/ State
University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a
university house or apartment, a person must be student at State. This requirement is a condition
precedent./ Khan offers to buy Lonnie’s 1967 Mustang only if an appraiser estimates that it can be
restored for less than a certain price.

This requirement is a condition precedent Ann offers to buy Beth’s land only if an appraiser estimates
that its current value is more than a certain price. Later, the appraiser deems the worth of the land to be
less than Beth’s price. Ann and Beth’s obligations are discharged./ Restoration, Inc. (BRI), enters into a
contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI
completes most of the work promised in the contract, its performance will be substantial. absolute.
complete. material. Ed’s Electric substantially performs its contract with Forest Hills Apartments, Inc., to
deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to damages. nothing
more. to be excused from performance. suspend performance.

Lew’s Landscaping Service substantially performs its contract with Metro Office Park. Metro’s duty to
perform a. remains absolute. damages. is discharged. is excused. is suspended. / Medical Accounts
Collection enters into a contract to employ Natalie as a billing and credit manager for two years. During
the first year, Natalie is often absent without explanation and when present fails to adequately do her job.

Natalie’s performance most likely a. discharges Medical Accounts from the contract. discharges Medical
Accounts from the contract Natalie’s performance is most likely a material breach. a minor breach. a
reasonable breach. no breach./ Inez hires Josh to paint her portrait to her satisfaction for $4,000. When
Josh finishes the portrait, Inez announces that she is not satisfied with it. Inez does not have to pay
Josh./ Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic
Corporation. Before either party has performed, rescission of this contract requires a mutual agreement
to rescind. an accord and satisfaction. a novation. a settlement agreement. Home Construction LLC
enters into a contract with Irene to build a house. Before Home starts to work, the market price for its
services increases—in effect, Home will lose money by if it fulfills its contract with Irene. Home notifies
her that it will not perform. Home’s obligation to perform is breached. discharged. rescinded.
suspended.

Juan and Isidro enter into a contract to buy, restore and reopen the Coastal Park Carousel. Before either
party begins to perform, they agree to cancel their deal. This is mutual rescission. Gliding Light, LLC,
and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should
take Gliding Light’s place and assume all of its rights and duties under the contract. This is a novation.
Barbara and Johann are parties to a contract. They agree on a novation. The novation requires a. the
existence of a previous, valid obligation. specific performance. consideration greater than $5,000.
performance of the original contract by all of the parties. an accord and satisfaction.

Renee contracts with Scott to pay him $25,000 for his work on Renee’s new album “Hip Pop.” After Scott
performs, they sign an accord, in which Renee promises to pay him $21,000 within thirty days instead of
$25,000 later. But she does not pay. Scott can sue Renee on the accord or the original obligation. Leah
and Mason are parties to a contract for the sale of Mason’s day care facility to Leah. Before the deal
closes, they agree to substitute Nell for Leah as a party to the deal. This novation does not require c.
performance of the original contract by all of the parties. Oren and Pat are parties to a contract for the
management of Oren’s residential rental properties. A dispute arises between them over the obligations
due under the contract. They negotiate a compromise and form a different agreement to substitute for the
original one. This settlement agreement does not require a third party. the existence of a previous, valid
obligation. the agreement by the parties to the new contract. a new, valid contract

Planners & Builders, Inc., enters into a contract with O’Reilly to refurbish a garage on his property as an
auto repair shop. O’Reilly’s neighbor Nora challenges the project as a violation of the local zoning laws.
A court orders a halt to the project. O’Reilly’s contract with Planners & Builders is discharged. /Amy
and Bob enter into a contract for Bob to perform waste management services for Amy’s commercial
properties. Later, Bob alters a material term—increases the price—without Amy’s knowledge or consent.
Amy can treat the contract as discharged./ Jason and Kelly enter into a contract for Jason to renovate
Kelly’s house by a certain date. Jason never performs. After the applicable limitations period has passed,
Kelly decides to bring a suit against Jason for breach. This suit can no longer be brought./ Contractors
Service, Inc., enters into a contract to build a restaurant for Dierdre’s Soup Spoons Bistro with Dierdre’s
payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot
pay on time. In this situation Dierdre is in breach of contract. Dierdre’s bank is liable to Contractors
Service. the contract is discharged. d. the contract is suspended.

Omar and Penn want to discharge their contract by executing a new agreement with performance different
from what they originally promised. They can best accomplish this by an accord and satisfaction./
Refer to Fact Pattern 18-2. If Flora dies before the deliveries begin, her contract with Harvesters is
breached. discharged. not affected. suspended.
CHAPTER 12: If bad weather destroys Flora’s crops, the obligation to deliver produce to
Harvesters is breached.

When Sonya Celebrity reads an embarrassing article about herself in Fame magazine,
she becomes very worried about damage to her reputation. During her lawsuit against
Fame, the magazine's lawyer argues that his client's rights are protected by the
Constitution, specifically the right to free press. Is this a civil or criminal lawsuit? This is
a civil lawsuit. On what part of the Constitution is Fame magazine's lawyer basing his
argument? Fame magazine is basing its argument on the First Amendment to the
Constitution. A state trial court held that Raynes Inc. violated its contract with Cranwell
Management. Raynes appealed the decision to the state appellate court. If the appellate
court remands the case, it is most likely because: the trial court's decision made a
mistake in interpreting the law.

Ever since a large manufacturing plant opened a quarter mile from Stanley's house, he
has been bothered by air pollution and loud noises coming from the plant. Tired of the
problems the plant is causing, Stanley goes to civil court seeking a(n) injunction which
is a(n) court order requiring the plant to stop. In the 1980s, the Supreme Court ruled
that it was legal for protesters to burn the American flag because this activity counts as
free speech under the Constitution. What kind of law is this? It is the Common law. In
1994, when the Arizona Supreme Court decided the case of Hernandez v. Arizona
Board of Regents, it found a duty of care to avoid providing alcohol to underage
consumers. If in 2017 a plaintiff from Flagstaff, Arizona brings a lawsuit in an Arizona
state trial court against a student group at an Arizona university for providing alcohol to
members under the legal drinking age, will the Hernandez V. Arizona Board of Regents
case serve as precedent (assuming no court has overturned it)? Yes, it will be used as
precedent and it is binding.

Congress passes The Nylon-Free Water Act, a statute making it a crime for commercial
fishermen to use nylon fishing nets in water where manatees are found. Now that the
Act has passed Congress, who will create regulations for implementing it? An
administrative agency. Pursuant to its power under the U.S. Constitution to enact laws
affecting the health and safety of its residents, New Jersey lowers its highway speed
limits by 10 miles per hour in hopes of reducing traffic deaths. This is an example of
what aspect of our government? Federalism. The president has nominated Judge
Mukae to be a federal judge. Before Judge Mukae can be confirmed (that is, officially
appointed), she must be approved by the Senate as a result of our system of checks
and balances.

Josh and Colin are driving down the highway in Josh's new convertible. Josh steps on
the gas and accelerates to 110 miles per hour, almost double the 60 miles per hour
speed limit. Colin urges Josh to slow down, saying, "The law is the law, and you should
follow it even if you think it's unfair." Josh responds, "It's unjust to have a law about how
fast people can drive their own cars. Let's see how fast can go!" In this scenario, Josh
and Colin's differing legal philosophies seem to adhere most closely to: natural law for
Josh, and legal positivism for Colin. In 1997, the Supreme Court declared
unconstitutional a provision of a federal gun control law that required state and local
governments to conduct a background check on prospective gun purchasers. Under
what legal authority did the Supreme Court have the right to declare the provision
unconstitutional? Judicial power. Several U.S. southern states pass a law that restricts
the sale of alcohol by businesses on Sunday between the hours of 6AM and midnight. A
few weeks later, the federal government passes a law that says "no jurisdiction shall
restrict the sale of alcohol in any manner." Would the states still be permitted to restrict
sales of alcohol within their borders? No, because federal law preempts state law.

In the case of Hammer v. Breidenbach, 31 Mo. 49 (1860), Mr. Breidenbach was hired
to brew beer in a cave for his employer, at a salary of $1,000 per year. The contract
between the Bavarian Brewery (which would later become Anheuser-Busch) and Mr.
Breidenbach specified that any violation of the agreement would result in the breaching
party paying the sum of $500 to the injured party. Because the cave was dangerous, Mr.
Breidenbach refused to enter it to make the beer, and his employer demanded the
$500. An appellate court later determined that Mr. Breidenbach should not be required
to enter the cave and endanger himself, and he was not required to pay the $500
"penalty." In which of the following modern cases could this case act as an appropriate
precedent? A case where a liquidated (pre-determined) damages payment in a
contract was excessively disproportionate to the injury.

Definitions
Law is essential and Common law is also called judge-made law. Which of the
following is true of the basis of the U.S. legal system? It is largely based on the English
model with contributions from other societies. No one school of jurisprudence is likely
to seem perfect. Legal realism is the school of jurisprudence used on the philosophy
that what matter is not what is written as law, but who enforces the law and by what
process. The statement best summarizes the philosophy of legal positivism in
jurisprudence: Law is what the sovereign says. In 1998, the United States Supreme
Court ruled in a case entitled, Oncale v. Sundowner Offshore Services, Inc., that
same-sex sexual harassment is illegal under federal civil rights law. Amanda works
for Avali, Inc. in California. In 1999, Amanda's supervisor, Jill, repeatedly grabbed her
breasts and asked for sexual favors. If Amanda decides to sue for sexual
harassment, it is true that the decision in Oncale v. Sundowner Offshore Services, Inc.
will be precedent. In a case, often both parties have legitimate, opposing arguments.
The theory of natural law posits that: all law must have a foundation in morality.
Martha sued her employer claiming she was denied a promotion because of her age.
This is NOT a criminal lawsuit.

The Aviation Security Improvement Act (ASIA) states that the FAA can refuse to divulge
information about airport security. The family members of passengers who were killed in
a terrorist bombing of an airplane over Lockerbie, Scotland, requested certain airport
security information from the FAA under the Freedom of Information Act (FOIA). The
FAA refused this request because it interpreted ASIA to mean that the agency had the
right to withhold data in spite of FOIA. Must the courts uphold the FAA's decision? The
court must, because the courts must defer to an agency's reasonable interpretation of
the law.

Armando is spending an autumn weekend at Maria's Bed and Breakfast in Vermont.

Armando has a comfortable room on the second floor, right next to the bedroom where
Maria herself sleeps every night. On the third night of Armando's stay, Maria wakes up
to the smell of smoke and realizes the Bed and Breakfast may be in grave danger. She
walks past Armando's bedroom door, goes down the stairs and strolls out the front door
to safety. Armando does not wake up and suffers severe burns when the fire reaches
his room ten minutes later. If Armando successfully sues Maria, the court most likely to
applied the duty of care exception under Tarasoff v. Regents University of California.
Clark is outraged when the EPA promulgates a rule stating that lakefront buildings must
be set back at least 30 feet from the water. He believes the EPA has exceeded its
authority. Clark does not own lake-front property, but some of his best friends do, and he
is gravely concerned about this encroachment on their individual property rights. Will
Clark be able to bring an action to federal court? Clark will not be able to have the
administrative rule reviewed in federal court because he has not suffered direct harm.

The highest court in Montana must decide a complicated case about the custody of a
child conceived by using an egg donor and a surrogate who was raised by an
unmarried, homosexual couple. The highest court in Montana has never heard a
case like this before, but there is relevant case law in a family court in Montana. Is
the highest court bound by the Montana family court's earlier decision? No, because the
decision was made in a lower court (chapter 1). Congress has passed a new securities
law. If the president disagrees with this statute, what is his/her best course of action?
The president can veto the bill. Federal antitrust statutes are complex, but the basic
goal is straightforward: to prevent a major industry from being so dominated by a small
group of corporations that they destroy competition and injure consumers. Does Major
League Baseball violate the antitrust laws? Many observers say that it does. A small
group of owners not only dominate the industry but actually own it, controlling the entry
of new owners into the game. This issue went to the United States Supreme Court in
1922. Justice Holmes ruled, perhaps surprisingly, that baseball is exempt from the
antitrust laws, holding that baseball is not "trade or commerce." Suppose that a
congressman dislikes this ruling and dislikes the current condition of baseball. What
could he/she do? The congressman could introduce a bill overruling the Supreme
Court's interpretation of federal antitrust statutes.

Mark's state legislature passed a law that requires restaurant employees to receive four
hours of first aid training that must include instruction on the Heimlich maneuver. The
law also requires that employees take reasonable efforts to provide assistance to any
customers who experience a health emergency at a restaurant. Mark, a restaurant
server, received the required training but did nothing to help a customer who choked on
his food at Mark's restaurant. When Mark is charged with violating the statute, he
argues that he did not believe that choking qualified as a health emergency. How will
the court interpreting the meaning of "health emergency" in this statute? By using the
plain meaning rule because "health emergency" has an ordinary meaning to the
general population. Eighteen-year-old Alisha was driving through her neighborhood
one afternoon and recognized six year-old Timmy, a member of the Caldwell family, who
lived a block away from her house. Alisha used to babysit for Timmy on weekday
afternoons until a few months ago, when she started working at a local grocery store.
From her car, Alisha could see Timmy was flailing around in the water next to the dock
of Maverick Pond, the neighborhood's favorite fishing spot. Alisha knew that the there
was a big drop off there where the water was very deep, well over Timmy's head.
Because she was late for work, she decided to keep driving, thinking that Timmy's
parents must be close by. She feels terrible later when she discovers that Timmy is
hospitalized in critical condition after nearly drowning in the pond. Did Alisha have a
legal obligation to come to Timmy's aid? No, because she wasn't babysitting Timmy
that day, she off work a few months ago.

Organizations/terms
Congress passed the Civil Rights Act of 1964, a statute that prohibits employment
discrimination based on race, color, religion, sex, or national origin. Congress also
established an administrative agency, the Equal Employment Opportunity Commission
(EEOC) to enforce this statute. The EEOC created guidelines that define terms such as
"race/color discrimination" and "sex discrimination." These guidelines are an example
of: interpretive rules because they are clarifying an ambiguous statute. The IRS
promulgates several interpretive rules about corporate tax compliance, particularly for
executive compensation. The rules prove to be highly controversial and are a result of
misconduct on the part of the head of the IRS. Which of the following statements is
correct? The IRS is an executive agency, and the president can fire the head of any
executive agency (IRS: Internal Revenue Service). The United States Department of
Agriculture (USDA) inspectors received new manuals to use as guides for their
inspections of meat packing facilities. Because they were pressed by Congress to get
some new rules in place quickly due to quality concerns at some facilities, the USDA
inserted the new guidelines in the inspector manuals through a commonly used process
called "bootlegging." Based on a violation of one of these rules, a large meat packing
facility has their packing line closed down temporarily. Do you believe these
"bootlegged" rules are allowable? No, because the rule-making process was
bypassed. Erica owns a waterfront home in South Carolina, and is interested to know
what information South Carolina has about her property and her tax obligations. May
Erica use the Freedom of Information Act (FOIA) to obtain this information? No. FOIA
may not be used to obtain information from state governments. In the 1950s, Illinois
enacted legislation requiring trucks to have curved mud flaps. There was no federal law
about mud flaps at the time, but the Illinois statute was enacted because state
legislators asserted that the curved mud flaps were more effective in preventing
accidents than the straight mud flaps. Several trucking companies brought suit, because
the Illinois statute conflicted with the laws of other states that required straight mud
flaps. Was the Illinois statute constitutional? No because it violated the Commerce
Clause. To protect Native Americans, the Federal government passes a law prohibiting
their taxation. Oklahoma amends its own tax law, adding a small tax on Native
Americans. Is the Oklahoma law constitutional? No, the statute violates the Supremacy
Clause.

Marcel is picnicking in a crowded local park. He decides he would be more comfortable

naked, so he takes off all his clothes. He can enjoy only a few more bites of his lunch
before he is arrested for violating city ordinances about public nudity. Marcel sues. If the
court finds that Marcel's actions do not warrant First Amendment protection, it is
probably because his nudity was not intended to convey a particularized message.
Eloise plans to build an addition on her house that she will operate as a bed and
breakfast. The town rejects her plans on the grounds that she must first purchase from
the town an expensive commercial building permit. Eloise argues that she is just
modifying her own residence and that she owned the residence before the commercial
permit legislation was passed. She argues she that, therefore, does not need the
expensive permit. At the court hearing on her case, the town mayor serves as judge.
This is a violation of procedural due process requirements. Andre is in 11th grade at
his local public high school. He wants to take the school's ballet class as one of his
required electives, but the school allows only girls to enroll in the class. Andre sues
under the 14th Amendment. How will a court determine the result? The court will apply
intermediate scrutiny, and the school will have to demonstate that the rule is
substantially related to an important government interest.

This chapter is filled with examples of statutes that have been struck down by the
courts. A Texas law banning flag burning was rejected by the Supreme Court, as was a
Louisiana death penalty statute. Where does the Supreme Court get its power to strike
down congressional statutes as unconstitutional? Marbury v. Madison. You begin work
at Everhappy Corp. at the beginning of November. On your second day at work, you
wear a political button on your coat supporting your choice for governor in the upcoming
election. Your boss glances at it and says, "Get that stupid thing out of this office, or
you're history." You protest that his statement violates your constitutional rights. Are you
right? No, because an employer has the right to regulate how employees look at
work. Gilleo displayed a large sign on her front lawn that read, "Say No to War in the
Persian Gulf, Call Congress Now." The city of Ladue fined her for violating its prohibition
on signs on front lawns. Gilleo sued. The city claimed that it was regulating "time, place,
and manner." Who should win? Gilles, because the prohibition was overly broad. David
paid $975,000 for two beachfront lots in coastal South Carolina, with the intention of
building residential homes on each. Two years later, the South Carolina legislature
passed the Beachfront Management Act, barring any further development of the coast,
including David's lots. When David files a complaint to seek compensation for his
property, South Carolina refuses, pointing to a passage in David's own complaint
that states "the Beachfront Management Act [was] properly and validly designed to
preserve South Carolina's beaches..." Is South Carolina required to compensate
David under the Takings Clause? Yes, because the Beachfront Management Act
renders David's property economically valueless.

Hoà giải: MEDIATION Jason was a restaurant server with six years of
experience who recently relocated to the Northeast. The new town he lived in had only
a small number of restaurants, the busiest one being part of the chain "Hooters."
Although the Hooters restaurant is
known for only hiring young, attractive females as servers, Jason applies for a wait
staff position, and is turned down because he is a male. Is Hooter's required to hire
Jason for a server position? No, because the position of server has a bona fide
occupational qualification. Claudia and Patrick would like to dissolve their business
partnership. They are confident that they can work collaboratively on the terms of the
settlement, but they do not have much money to spend on the process and are nervous
about the prospect of the terms being decided by a third party who is unfamiliar with
them and their industry. Which of the following legal processes is a good choice for
them? Mediation. Statutory rape is a crime in which a defendant has sexual intercourse
with a person who is too young to give legal consent for the action. In a criminal case
involving an alleged statutory rape, the age of the victim at the time of the offense is an
issue to be determined by the jury in a trial court.

Eliza (female) has been working as an administrative assistant at Giant Coalmine Corp.
for two years. Recently, several of her male coworkers, including some of the
company's executives, have started sexually harassing Eliza by engaging in unwanted
sexual advances, abusive language, and threatening behavior. Eliza has discussed this
situation with her female coworkers, several of whom have experienced a similar
pattern of inappropriate treatment. The women feel intimidated and worry about losing
their jobs if they complain. What can Eliza and her attorney do to strengthen their case
against Giant Coalmine? File a class action lawsuit against Giant Coalmine.
During discovery, lawyers for the defense find out that the plaintiff was hospitalized in a
psychiatric facility last April. If the court grants the defense access to the plaintiff's full
medical records from that hospitalization, it is most likely because the plaintiff's mental
condition is relevant to the case. Marshall claims that Victor breached their contract
and sues him in district court, seeking $80,000 in damages. If the trial is being held
without a jury, it is most likely because both parties waived their right to a jury. Miles
is floating happily on a rubber raft in his swimming pool in New Jersey when the raft
busts and cuts his eye. His doctor says he will need corrective surgery and may never
fully regain his eyesight in the damaged eye. Miles learns that the raft was
manufactured in Louisiana by Intack Inc., a company headquartered in New Mexico.
Miles bought the raft from a Kidz Toyz store, a chain of stores in New Jersey that sells
many Intack products. Miles sues Intack in a New Jersey federal court for $100,000.
Intack files a motion to have the case moved to federal court in New Mexico, saying that
New Jersey lacks jurisdiction over the case. Is Intack correct? Intack is not correct
because the company does a significant amount of business in New Jersey and can
reasonably expect to be sued there.

You and a partner in Turkey plan to open a store in Chicago selling rugs imported from
Turkey. You are wise enough to insist on a contract establishing the rights and
obligations of both parties and would prefer a clause requiring alternative dispute
resolution (ADR) of any conflicts that arise under the contract. You want to be sensitive
to your partner's culture and do not want to propose a clause that will alienate him.
What is the best way you can accomplish all of this? Research Turkish law and hire a
mediator familiar with Turkish customs. In a civil case, a plaintiff wins a lawsuit if he is
51% convincing and will collect 100% of his damages. In a criminal case the prosecutor
must prove his case beyond a reasonable doubt. Why is there such a significant
difference in the burden of proof between civil and criminal cases? The burden is
higher in a criminal case because the consequences that the defendant faces are
more severe. Prime Investments Corporation sues one of its executives, Stewart, for
embezzling client funds. At trial, Prime calls several of Stewart's colleagues to the
stand, who testify that Stewart is a bad person with no integrity and they were not
surprised to hear that he was accused of stealing money. Typically opinions of this type
are not admissible in court. The jury finds Stewart liable to Prime for $1 million in stolen
money. If Stewart appeals, the appellate court will probably reverse the decision due
to the trial judge's legal error.

Large numbers of employees have signed mandatory arbitration agreements in

employment contracts. Courts usually uphold these clauses. The disadvantage of
using arbitration in place of litigation is that the employees will lose their rights to a
class action. Arthur met Rottweiler breeders Lynda and George at a dog show in Rhode
Island. The couple, who reside in New York State, later sold several Rottweiler dogs to
Arthur who lived in Rhode Island. Arthur later sued Lynda and George, claiming that the
dogs were sick and infirm. He filed a complaint in Rhode Island courts, claiming that
even though the dogs were sold in New York, the breeders had attended the dog show
and advertised in the Rottweiler Newsletter which was distributed at the event in Rhode
Island. Based on the facts, do you think Rhode Island courts have personal jurisdiction
in this case? Rhode Island courts doesn’t have personal jurisdiction, because the
breeders had insufficient minimal contacts with Rhode Island. An upscale restaurant in
New York, New York paid a considerable sum for the entire harvest of ice wine from a
small grower in Vermont. After receiving and testing the wine cases, the restaurant
realized the grapes used to make the wine had spoiled, probably upon rethawing, when
ice crystals can disrupt the fruit. They requested to return the wine, but the grower
refused to believe that there was a problem. The restaurant files a claim against the
winery in federal court, citing diversity as the basis for subject matter jurisdiction. The
amount in controversy is over $75,000 and both the restaurant and the grower are
incorporated in Delaware. Can the federal court hear this case? The federal cannot
hear this case, because the requirements for diversity jurisdiction are not met.

Những case liên quan tới xâm phạm nhà ở/xâm chiếm tài sản
Violent Violet, the main suspect in a brutal double homicide, is arrested and brought to
the police station. Once there, Violet refuses to speak to the police. A team of officers
interrogates her, keeping her awake for three straight days and refusing to give her any
food. Eventually, she confesses to the double homicide. At trial, the judge rules that
Violet's confession is inadmissible. Why? Because the police coerced (ép buộc)
Violet's confession. Harrison met Alejandro in an online chat room for people who like to
talk about violent fantasies. Harrison and Alejandro spent hours each week chatting
online with each other about elaborate plans to kill Harrison's wife, Melody. They chose
a date to execute their plan, and Harrison bought a gun, some rope, and gloves for both
of them to wear. The police learned of the plan and arrested Harrison and Alejandro the
day before they planned to kill Melody. What will happen at trial? Harrison and Alejandro
will be found guilty of conspiracy (thông đồng với nhau). Marcus goes to class leaving
five pounds of heroin on a table in his bedroom. Shortly after, the police knock on the
door and ask Marcus' roommate Lina if they may search the apartment. Lina says yes,
and the police find Marcus' drugs. If the police did not have a search warrant for the
apartment, was the search permissible? Yes, because Lina allowed the police in.
Jasper is indicted for larceny (ăn cắp) by the grand jury but then found not guilty at trial.
Why is this possible? Because it is relatively easy for prosecutors to obtain an
indictment.

Những case liên quan tới lừa gạt

Poppy is delighted when she meets Sam on an online dating website. He is charming
and handsome and, best of all, seems to be equally enchanted with her. The two
exchange online messages and talk on the phone. Sam asks Poppy to transfer him
some money so that he can travel from his home in London to visit her in Austin, Texas.
Poppy sends Sam money for a plane ticket, plus additional funds to cover medical
expenses so he can travel comfortably and feel his best when he meets her family. As
soon as Sam receives the money, Poppy never hears from him again. Sam has
committed wire fraud (lừa đảo tài sản) and romance fraud (Sam lừa tình Poppy qua
mạng đó, đọc case này xong nhớ né tình iu ảo). AJ is studying in a busy student lounge
when his friend arrives and tells him that she just got great tickets to a basketball game.
AJ grabs his books, backpack, and cellphone and dashes to the game with her. At the
game, AJ realizes that he mistakenly took someone else's phone. At first, AJ plans to
return the phone, but then he realizes that it is much nicer than his so he keeps it. AJ is
guilty of which: fraud (lừa đảo), larceny (ăn cắp, xâm chiếm tài sản), embezzlement
(biển thủ công quỹ) → none of these crimes, đúng là stealing. Arnie owns a house in a
poor section of the city. A fire breaks out, destroying the building, and
causing $150,000 of damage to an adjacent store. The state charges Arnie with arson.
Simultaneously, Vicki, the store owner, sues Arnie for the damage to her property.
Identical evidence is presented to juries in both cases. The criminal jury acquits Arnie,
while the civil jury awards Vickie $150,000. Why is this possible? The prosecutor did not
prove the criminal case beyond reasonable doubt, but Vicki proved her civil case by a
preponderance of the evidence. Kathy Hathcoat was a teller at a bank in Pendleton,
Indiana. Her branch manager, Mary Jane Cooper, caught Hathcoat stealing money
from her cash drawer. Rather than reporting Hathcoat, Cooper joined in. The two
helped cover for each other by verifying that their cash drawers were in balance. They
took nearly $200,000 before bank officials found out. What criminal charge may the
government bring against Hathcoat? Embezzlement. Although video poker machines
are outlawed in Pennsylvania, Conley placed them in bars and clubs throughout the
state. He used profits from the machines to buy more machines. What crime has he
committed, other than violating the law prohibiting video poker machines? Money
laundering (rửa tiền). Albert (Al) lived in a small town and worked at the single bank
located there. Frustrated by the knowledge that customers rarely check their bank
receipts or reconcile their accounts, Al decided to teach the folks in his town a lesson.
When a customer came to the bank to withdraw some money from the bank, he would
take extra funds out of their account and pocket it. He originally was planning on
restoring the money to the accounts, but after gathering up several hundred dollars, Al
decided to keep the money. He then starts to do this regularly and accumulates
thousands of dollars from customer accounts, and he never returns any of the money.
Has Al committed a crime? Embezzlement.

A new British law requires British police officers to say the following when placing a
suspect under arrest: "You do not have to say anything. A record will be made of
anything you say, and it may be presented as evidence if you are brought to trial." What
additional information does a police officer in the United States have to give
suspects at the time of an arrest? A police officer must tell the suspect that he has the
right to a lawyer. In 1995, after nearly ten months of testimony, a criminal jury acquitted
celebrity football player and actor O.J. Simpson of murdering his ex wife Nicole Brown
Simpson and her friend restaurant waiter Ron Goldman. Then in 1997, a civil jury a
found Simpson liable for the murders, fining him $33.5 million in damages. How can
these juries come to two such different verdicts on the same issue? A criminal jury's
burden of proof is "beyond a reasonable doubt" and a civil jury's burden of proof is
"preponderance of the evidence." (bằng chứng chiếm ưu thế hơn) → câu này lí
thuyết nên thuộc để không sai ngu. Dolly has a baseball bat and a great deal of anger
towards Peter. It is possible for Dolly to batter Peter without assaulting him, and it
is possible for Dolly to assault Peter without battering him. D'Arcy, who is not a public
figure, brings a libel suit against Mary. At trial, D'Arcy fails to prove injury or actual
malice, but he wins the suit anyway. Which of the following must be true? D'Arcy sued
Mary because she wrote an article that said he had been convicted of tax fraud, when
he had not.

One day, while drawing a patient's blood, nurse Athena accidentally pricks herself with
the needle that she had just used on the patient. Rebecca, another nurse at the
hospital, warns Athena that the patient has Hepatitis C, a virus that can spread through
a shared needle. Athena becomes visibly distraught, and Rebecca tells nurse Edwin
that Athena now has Hepatitis C. In fact, Rebecca made the whole thing up. She knew
the patient had no such illness and just wanted to embarrass her CO worker. Rebecca
may be found liable for intentional infliction of emotional distress and slander. After
he is injured in an accident, Conrad successfully sues the driver and the trucking
company. The jury awards him money for past lost earning capacity, past and future
physical symptoms and discomfort, and past emotional injury and mental anguish. If
Conrad's injuries require him to be out of work for much longer than anticipated, can
he later file another suit against the driver and the trucking company for his
unforeseen lost wages? He cannot under the single recovery principle. Taterz Potato
Chip Company posted a billboard along the highway with a photo of NBA basketball
superstar LeBron Smith eating their chips (không phải hợp đồng quảng cáo, tự ý sử
dụng hình ảnh chưa qua thoả thuận). Smith was furious. He did not endorse the chips,
and he did not want his fans to think he ate unhealthy snacks. Smith sues Taterz. What
result? Taterz is liable for commercial exploitation.

Lucia is very interested in buying Charlotte's apartment and has toured it several times.
She pays Charlotte $5,000 to hold the offer open (that is, not to sell the apartment to
anyone else) for three days, so that Lucia can think it over. The next day, Lucia's realtor,
Antonio, shows her an apartment that she prefers. Lucia buys it on the spot. Charlotte
sues Antonio for tortious interference with a contract. What result? Charlotte loses
because she did not have a contract with Lucia for the sale of the apartment. (Lucia
mới đi coi và cọc giữ qua miệng chứ chưa kí hợp đồng nên không bị ràng buộc). You
are a vice-president in charge of personnel at a large manufacturing company. In-house
detectives inform you that Gates, an employee, was seen stealing valuable computer
equipment. Gates denies the theft, but you believe the detectives and fire him. The
detectives suggest that you post notices around the company informing all employees
what happened to Gates and why. This will discourage others from stealing. Should you
post the notices? I should not post because posting the sign could give rise to a claim
of defamation (phỉ báng tại vì chưa có bằng chứng xác thực mà mới nghe qua miệng
của detective thôi). Caldwell was shopping at T-Mart department store, carrying a large
a purse. A security guard observed her looking at various small items for sale. At one
point, Caldwell put her reading glasses in her purse, and the guard thought she
might have been shoplifting. The guard approached her in the parking lot and
accused her of taking store merchandise. The guard found no stolen goods in her
purse but had her return to the store with him. They walked around the store for
approximately 15 minutes, while the guard said six or seven times that he saw her
steal something. Another store employee indicated she could go, and Caldwell later
sued. What kind of suit did she file, and what should the outcome be? False
imprisonment, and she will win (nhỏ không lấy mà buộc tội nhỏ rồi giam giữ nhỏ lại
nên thắng kiện là đúng rồi)

Tata Consultancy of Mumbai, India, is an international computer consulting firm. It

spends considerable time and effort recruiting the best personnel from India's leading
technical schools and has its employees sign an initial three-year employment
commitment. Desai worked for Tata, but then quit and formed a competing company,
Syntel. His new company contacted Tata employees, offering a higher salary a
and other perks. Several Tata employees accepted Syntel's offer and did not
complete their three year obligation. Tata sued Syntel. What did it claim, and what
should be the result? Tortious interference with a contract, and Tata will win (vi
phạm hợp đồng nên còn phải bồi thường nữa). What general guidelines has the
Supreme Court set forth for awarding punitive damages (bồi thường trừng phạt)?
Punitive damages should not exceed compensatory damages by more than a
factor of nine. Nine-year-old Simone was out shopping with her mother in the local
strip mall. While her mother was looking in a furniture store, Simone received
permission to go next door to a women's clothing store. While in the store, she picked
up a package of socks and moved to the front door to see if her mother was outside.
The manager, thinking that Simone was shoplifting, grabbed her by the arm and placed
her in an unlocked storage room, where he asked her questions for about 15 minutes.
After being satisfied that Simone had not intended to steal merchandise, he continued
to keep her in the unlit storeroom, alone, for nearly two additional hours, because he
could not locate her mother. Has the store manager committed a tort by his actions?
The detention was unreasonable so the store manager has committed a tort.
Pam Perez hired Daniel Construction to complete a remodeling project in her
Washington, DC home. When the work was finished, Pam asked the construction
foreman to do some additional tasks before they left the residence. When the foreman
said that work would need to be rescheduled, Pam went on the service review website
"Angie's List" and wrote the following entry: "Do not hire Daniel Construction to do any
work for you. This company didn't even finish the project, and the work they did
complete was terrible. In my opinion, they are also jewelry thieves, because valuable
items were missing from my home, and Daniel Construction was the only one with an
extra key." If Daniel Construction files a defamation lawsuit against Pam, what is the
likely result? Daniel Construction wins, because they didn't take any jewelry or
valuables from Pam's home. Curious to see its worth, Irene takes a beautiful oil
painting that she inherited from her grandmother to Eleanor, a respected art appraiser.
Eleanor tells Irene the artwork is a worthless piece of junk, so Irene sells the painting to
Aziz at a yard a sale for $50. The following week,Irene finds out that Aziz sold the
painting for $12 million dollars at auction, after an appraiser at the auction house
determined it is the work of a famous painter named Thomas Gainsborough. Furious,
Irene sues Eleanor. What result? Eleanor will be liable if Irene can prove that a
reasonable art appraiser would recognize the painting as being valuable. Raquel is
speeding in her car through a busy town center when she veers off the road to avoid
a cat and plows into a small newspaper stand. The stand flies into the air and
smashes through the glass windows of a nearby yoga studio, where it startles Adam, a
yoga student, and sends him flying into a set of lighted candles. As a result, Adam
suffers a serious burn. Adam sues Raquel. What result? Adam will lose because
Raquel's conduct was not the proximate cause of his injury (cũng phải bắc cầu 7749
bước mới đụng thằng Adam).

Lindsay decides to go skydiving for the first time and chooses a company with an excellent
reputation. On the day of the dive, Lindsay slips on some oil on the floor of the company's
airplane hangar and fractures her elbow. Will Lindsay win a negligence suit against the
skydiving company? Lindsay will win because Lindsay is an incite of the skydiving
company. Lucas is hosting Thorben and several other dear friends at a housewarming party
at his new home. During the tour of the new place, Thorben plunges through a trap door
partially concealed by the living room carpet and falls 20 feet into the concrete basement
below. Thorben breaks both legs and sues Lucas. Lucas' best defense is that he did not
know about the trap door. Aurelia has emergency major heart surgery at the best hospital
in town. The next week, she goes to her doctor complaining of an acute pain in her chest.
The doctor performs an x-ray and finds that there is medical sponge inside Aurelia's chest.
Medical sponges are tools used during surgery and should never be left inside the patient.
Because Aurelia was unconscious during the surgery, she does not know who left the
sponge in her chest or how exactly it came to be placed there. Can Aurelia still win a
negligence case against the hospital? Yes, under the doctrine of res ipsa loquitur. Jasper
buys a can of Zaps bug spray. The first time Jasper sprays some on his arm, the can
explodes, causing deep cuts on his face that require surgery. Jasper sues Zaps. The fact
that most help Zaps' defense is that the shop that sold Jasper the bug spray had kept the
bug spray in an extremely hot storage room, and the extreme temperature is what
made the can explode.

Irving was a notary public who prepared income tax returns for Mark. Irving agreed to draft
a will for Mark, leaving all of the property to Mark's sister, Sonja. When Mark died, the court
refused to uphold the will because it was improperly drafted. As a result, Sonja inherits only
one eighth of the estate, and Sonja sued Irving. Irving defended on the grounds that he had
no duty of due care to Sonja because he only had dealings with Mark. Is Irving right? Irving
is wrong and has the duty of care because it was foreseeable that the failure to properly
draft the will would cause injury to Sonja. A new truck, manufactured by General Motors
Corp. (GMC), had a defective alternator that caused it to stall on a busy highway. The driver
set Up emergency flares around the stalled truck, but congestion on the highway made
them difficult to see. Davis did not see the flares, drove his car into the back of the stalled
truck, and was killed by the impact. His widow sues GMC. GMC moved for summary
judgment, alleging (1) no duty to Davis, (2) no factual causation, and (3) no foreseeable
harm. Should summary judgment be granted? There was factual cause, and the injury
was foreseeable so the judgement won't be granted. Harris walked onto some train
tracks, ignoring a yellow warning line painted on the station platform, shouts from
concerned onlookers, and the ringing bells and flashing lights signaling the approach of an
express train. The train killed Harris, and his widow sued the railroad arguing that its
negligence caused her husband's death. Will she win? No, Harris' own actions were the
factual cause of harm. The train station provided safety measures that a reasonable
person would pay attention to that Harris ignored. Powers drove a truck that his employer
leased from Big Trucks. After Big repeatedly failed to respond to Powers' requests to fix the
strap used to close the truck's rear door, Powers replaced the strap with a nylon rope. Later,
this nylon rope broke, causing Powers to fall and break his back. When Powers sued Big,
what was the result? Big is liable because it knew about the problem with the strap and
did not fix it.
Bernard Hospital was in desperate need of nurses during a shortage of qualified medical
personnel. Because the hospital was so short staffed, they bypassed the optional
background checks commonly required of all incoming employees, opting for only a check
of references provided by the applicant. Melinda, a nurse with 20 years of experience,
applied for a position at Bernard, and provided excellent references that all checked out.
After Melinda was hired, it was discovered that she was injecting herself with patients' pain
medications. An investigation by the hospital, after a lawsuit was filed by a patient against
them, discovered that Melinda had been discharged after the same type of incident at her
previous employer. Is the hospital liable for the patient's failure to receive their medication?
Yes, because the hospital was negligent in omitting the background check. In 2016,
two-year-old Lane Graves was wading in the lagoon of an Orlando Walt Disney World resort
and watching a family outdoor movie, when an alligator snatched the boy and disappeared.
The resort had signs which read "no swimming, deep drop off" posted along the beach area
where Lane was taken, and his parents were a few feet away when the incident occurred.
Several hours later, Lane's body was discovered about 15 yards from where he was taken
by the gator. A Disney employee said this was not the first time an alligator had been
spotted in the lagoon beach area. If the Graves family files a lawsuit against the resort, what
theory would best support their claim? Failure to warn negligence. Mrs. Martin tells some
neighborhood kids that she will pay $100 if any of them mows her lawn. Jake goes to a
hardware store, purchases a lawnmower for $60, and then mows Mrs. Martin's lawn. Jake
has entered into which types of contract? Jake has made a unilateral contract with Mrs.
Martin and a bilateral contract with the hardware store.

Olivia agrees that she will bring Desiree a cherry pie every Monday for one month in
exchange for $15 per week. Olivia delivers a pie to Desiree for four weeks, and Desiree
pays her each time. Olivia continues to deliver Desiree pies every Monday, and Desiree
continues to pay for another five weeks. On the tenth week, Olivia brings a pie and Desiree
refuses to pay. Olivia sues for payment. What will result? Olivia will win. The court will rule
that they had an implied contract. Chef Jacquie is scheduled to teach a cooking class to
three students. The class tuition is $1,100 per student. In the class, each student cooks a
French meal under Jacque's expert supervision and receives a cookbook (worth $30)
and a cooking pan (worth $150). Tory, one of the students, tells Jacquie the day before the
class that she will be unable to attend and requests a refund. Jacquie denies the refund
and Tory sues. Tory claims that the UCC should govern the contract, and Jacquie argues
that it should be covered by the common law. Who is right? Jacquie, because the class is
primarily a service. For the past seven years, Sommerset Storage, Inc. has hired
Mountbatten Tax Associates to prepare its annual tax return. This year the parties agree to
their usual $1,000 fee, but Mountbatten finds a loophole in the tax code and gets
Sommerset a refund four times the usual amount. Mountbatten then requests that
Sommerset pay $4,000 to reflect the increased tax refund. There is nothing in their
contract about increased fees, but Mountbatten argues it would be unjust for Sommerset
not to pay extra. Sommerset refuses, and Mountbatten sues. What will result? The court will
uphold the original contract, and Mountbatten will lose. While George travels for two
months, Mary agrees to housesit and care for George's three horses at her stables. The
parties agree that Mary will pick up the horses on the first day of George's trip, and
George will pay Mary when he returns. George returns home from his travels and finds
that Mary never picked up the horses. George sues. What will result? The court will apply
common law, and Mary will lose.

Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his
car for $11,000. The next day, Samuel decides he no longer wants the car and tries to get
out of the contract. Samuel argues that because Riley is a minor, the contract is void. If
Riley wants to enforce the contract, will he be able to? The contract is voidable, and only
Riley can cancel it (chap 3 - minor). Central Maine Power Co. (CMPC) made a promotional
offer in which it promised to pay a substantial sum to any homeowner or builder who
constructed new housing with electric heat. To qualify for the offer, Motel Services, Inc.
(MSI) decided to install electrical heat in a housing project it was constructing in Waterville,
Maine. MSI built the units and requested payment for the full amount of the
promotional offer. Is CMPC obligated to pay? Why or why not? CMPC is obligated to pay
because this was a unilateral contract, and MS performed. Interactive Data Corp. hired
Foley as an assistant product manager, and over the next six years, Interactive steadily
promoted him. Interactive officers repeatedly told Foley that he would have his job as
long as his performance was adequate. They also distributed an employee handbook that
specified termination guidelines that included a mandatory seven-step
pre-termination procedure. Foley learned that his supervisor was under investigation
by the FBI, and he told Interactive officers. Shortly thereafter, Interactive fired Foley.
He sued, claiming that Interactive could fire him only for good cause after the seven-step
procedure. Who wins? Interactive loses because it had an implied employment contract
with Foley that incorporated the seven steps.

The Hoffmans owned and operated a successful small bakery. Lukowitz, an agent of Red
Owl Stores, told them that for $18,000 Red Owl would build a store and it fully stock it for
them to operate. The Hoffmans sold their bakery and purchased a lot on which Red Owl
was to build the store. Lukowitz then told the Hoffmans that the price had gone up to
$26,000. The Hoffmans borrowed the extra money from relatives, but then Lukowitz
informed them that the cost would be $34,000. Negotiations broke off and the Hoffmans
sued. The court determined that there was no contract. Can the Hoffmans recover any
money? They can most likely recover damages based on promissory estoppel. While
negotiating with Stewart to purchase his house, Yasmine asks him about the condition of
the roof. "Excellent," he replies. 'It is only 2 years old, and should last 25 more." In fact,
Stewart knows that the roof is 26 years old and has had a series of leaks. The parties
sign a sales contract for $600,000. A week before Yasmine is to pay for the house and
take possession, she discovers the leaks and learns that a new roof will cost $35,000.
What kind of contract exists between Yasmine and Stewart? Voidable contract by Yasmine.
Simon, aged 10, is invited to a classmate's birthday party at an exclusive ski resort on
March 15th. The day will include 4 hours of snowboarding, lunch and birthday cake.
Simon's mother checks a box on the invitation that says "YES, we will attend" and returns it
to the classmate's address. Unfortunately, they later don't attend the party when Simon
comes down with the flu. On March 17th, Simon's mother receives an invoice in the mail
from Simon's classmate for $35 that says, "Party No-Show Fee." Can Simon's classmate
collect the fee? No, because there was no intent to form a contract by Simon's mother.

CHAP 3: OFFER AND ACCEPTANCE

Xuechen graduated from culinary school at the top of her class, and signed an employment
contract to work as a chef for one of Chicago's best restaurants for a period of three years.
Additionally, Xuechen signed a non-competition agreement that stated she agreed not work
as a chef for any other restaurant in the Chicago city area for a period of five years. Shortly
after she began working, Xuechen left her employer to work as a manager at another
Chicago restaurant. Has Xuechen breached either of the contracts she signed? The
employment contract has been breached, but the non-competition agreement has not
been breached. The town of Sanford, Maine, decided to auction off a plot of land owned
by the town. The town advertised that it would accept bids through the mail, up to a
specified date. Arthur and Arlene mailed in a bid that turned out to be the highest of all
the bids the town received. When the town refused to sell them the lot, they sued. Who will
win? It will depend on whether the auction was with or without a reserve, or minimum
price. The Tufte family leased a 260-acre farm from the Travelers, Inc. Toward the end of
the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at
the Tuftes' house on March 30 and stated that they had until April 14 to accept. On
April 13, the Tuftes signed and mailed their acceptance, which Travelers received on
April 19. Travelers claimed there was no lease and attempted to evict the Tuftes from the
farm. May the Tuftes stay? Under the mailbox rule, an acceptance is generally effective
 (chap 3 phần additional
when mailed so the Tuftes can stay

rules for acceptance).

You are considering joining an online club. Before continuing to the membership page, the
site presents you with hundreds of lines of dense legalistic text and asks you to agree to
them. You click the "I agree" box. Will you be bound by the terms? It depends on what
state you are in (mỗi bang có luật khác nhau á nên ko thể áp dụng general được). Jackie
offers to sell Mel a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie
refuses to sell at the lower price, and Mel says, "OK, OK, I'll pay you $50." Has a contract
been formed? At what price? Mel made a counteroffer, which Jackie rejected so the
contract cannot be formed (chap 3 phần offer). While staying overnight at Lily's house,
Martin indicates that he would like to buy her car. Lily says she'll think it over. The next day
Martin finds a note on the kitchen counter from Lily that reads, "I might be able to sell the
car for about $22,000." Martin writes her a check for $22,000, takes the car keys off the
hook by the front door and drives off in the car. Have Lily and Martin formed a binding
contract? Lily's note was an invitation to bargain, not an offer. Mariposa Middle School is
in need of more sports equipment, so a school administrator contacts Kiko's Sporting
Goods. The administrator speaks to Kiko herself, and Kiko offers Mariposa 15 percent off its
order. Kiko tells the administrator she can order whenever she is ready and still enjoy
the discount (thông tin gây nhiễu). Kiko faxes the administrator a handwritten note that
reads "Pursuant to our conversation, I hereby grant Mariposa Middle School a 15%
discount off the final sales price of their purchase. Offer good for one use only. Offer open
for the next 5 months. Signed, Kiko" The administrator tries to use the discount four
months later but Kiko says she has revoked the offer. What will result? The offer will not be
UNENFORCEABLE because the offer is open too long.

Polyquan, Inc. emails a dozen companies, offering to sell them 100 sweatshirts in either
blue, red, orange, black, or green. The sweatshirts are $6 each. Shirts-A Lot Clothing
emails back, "We accept your offer of 100 sweatshirts for $6 each. No orange
sweatshirts." Bespoke Tourism emails back, "We accept your offer of 100 sweatshirts for
$6 each on the condition that you do not include any orange sweatshirts." (trường hợp
này là counteroffer ròi). Does Polyquan have a contract with either company? Polyquan has
a contract with Shirts-A-Lot. On Monday, Billy receives an offer from Andrew to buy
Billy's house for $500,000. On Tuesday, Billy mails Andrew a reply, "I'll sell it to you for
$600,000, and not a penny less." On Wednesday, Billy reconsiders so he mails Andrew the
following note: "I accept your offer for $500,000, the house is yours." On Thursday,
Andrew receives Billy's first note. On Friday, Andrew receives Billy's second note. What
result? Billy and Andrew have a contract for $500,000 (mailbox rule). TuffGrip ran an
advertisement for its brake pads in several national automotive industry journals. The ad
listed a range of prices for the brake pads and a few technical specifications. At the bottom,
the ad stated that TuffGrip had no liability in the event of a malfunction. Three large
mechanic chains purchased the brake pads after seeing the ad, and signed standard
TuffGrip purchase orders. Many of the brake pads that these mechanic chains installed in
customers' cars failed, causing severe injuries to drivers who could not stop their cars.
TuffGrip claimed it had no liability to the mechanic chains. Is TuffGrip correct? No,
TuffGrip is liable unless the purchase orders also included the limitation of liability
(include trong quảng cáo thì ko tính mà phải có include luôn trong hợp đồng).

Oliver found some cozy-looking winter gloves for a great price in a catalog. He decided to
purchase a pair for himself and additional pairs for every member of his extended family. He
mailed in the order form, along with a check. Two weeks later the catalog company
informed Oliver that it had run out of gloves and would not charge him. Oliver sues.
What will result? Oliver will lose as long as the company can show it was acting in
good faith. A national beverage company ran a promotion where consumers could collect
"points" by purchasing the company's products, then redeem the accumulated points for
items such as baseball caps and t-shirts. One television ad showed a teenager landing a
$33.8 million dollar aircraft in his schoolyard while "Harrier Jet: 7,000,000 points" flashed
across the screen. After the commercial aired, John gathered the 7 million points and asked
for a Harrier jet, yet the company refused to comply. Two days later the points for the jet had
changed in the ad from 7,000,000 to 700,000,000. If John sues for the airplane, what is the
probable outcome? John loses, because no reasonable person would believe the
advertisement was a serious offer. (nghe điêu lắm có ctr nào đổi điểm cho cái máy bay
ngon ơ z hong, chưa kể muốn sở hữu máy bay tư nhân nhiều giấy tờ lắm)

On August 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she
can only accept the offer by mailing the money to arrive by September 2 at his university
mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox
by August 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment)
until September 4th. Did Clarissa accept Calvin's offer? No, because Clarissa didn't meet
all the requirements of the offer. Amy, a baker, has found her dream home, but cannot
afford the down payment. Amy's brother agrees to loan her $30,000 for the down
payment, and Amy agrees to pay him back in one year. Next year, Amy offers to bake her
brother's wedding cake for his wedding next month instead of paying back the loan,
so that she can buy new equipment for her bakery. Amy's brother agrees. How much money
does Amy owe her brother? $0 because an agreement to accept different performance
in lieu of full payment of liquidated debt is binding. While visiting Sarah's art gallery,
Mark spots what he believes is an original painting by the artist Vincent van Gogh and
agrees to buy the painting from Sarah for $1,000,000. Upon returning home, Mark has the
painting appraised and learns that it is not a Van Gogh and is worth only $100,000. Mark
sends Sarah a letter saying that he bought the painting under false pretenses and will
pay only the fair market value of the painting, enclosing a check for $100,000 with
"payment in full" written in the memo line. Before depositing the check, Sarah crosses out
Mark's note and writes "first partial payment" over it. The next day Sarah learns that Mark's
check has bounced. If Sarah sues Mark, will the court find in her favor? Yes, as there was
no satisfaction of the debt because Mark's check bounced.

Florian, a busy surgeon, reads about a new state-of-the-art surgical mask developed by
Myriad Medical Devices (M.M.D.) and thinks it would be useful for his practice. Florian
enters into a contract with M.M.D. in which M.M.D. agrees to sell the doctor all the masks
he needs in the next six months. Shortly thereafter, a fire burns down Florian's practice, and
he will be unable to see patients for at least 9 months. Florian will not need a single
mask until the practice is back up and running. If M.M.D. sues Florian for breach of
contract when Florian does not order any masks, will M.M.D. win? No. This is a
requirements contract, and Florian acted in good faith. Helena shares with her family
her two goals for her senior year in college: join a synchronized swim team and shoot a bald
eagle. Helena's cousin Anika is concerned about the utility of both of these goals and urges
Helena to spend the year looking for a job, promising, "If, upon graduation, you have
secured a job, have refrained from synchronized swimming, and have not shot any bald
eagles, will give you $10,000." Helena immediately accepts the terms of the agreement and
at graduation has met all three criteria, but Anika refuses to pay. What argument will be
most helpful argument for Anika in court is The element of the agreement about the
bald eagle is not enforceable because shooting bald eagles is illegal. (agreement ko
thành lập dù Helena ko làm là vì term ko hợp lệ với pháp luật)

CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to
terminate the business and split its assets evenly. Meztista gave Hylton a two-page
document showing assets, liabilities, and a bottom line of $35,235.67, with half due to
each partner. Hylton questioned the accounting and asked to see the books. Meztista did
not permit Hylton to see any records and refused to answer her phone calls. Instead, he
gave her a check in the amount of $17,617.83, on which he wrote "Final
paymentpayment in full." (đúng 1 nửa amount phải trả của mỗi bên nên về phần ông này
là trả xong full payment rồi) Hylton cashed the check, but she wrote on it, "Under
protest-cashing this check does not constitute my acceptance of this amount as payment in
full." Hylton then filed suit, demanding additional monies. Meztista defended on the grounds
that the parties had made an accord and satisfaction. What is the likely result? Hilton's
debt is discharged because there has been an accord and satisfaction. American
Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of
gasoline, the company was interested in converting the trucks to propane fuel. It signed a
requirements contract with Empire Gas, in which Empire would convert "approximately
3,000" trucks to propane fuel upon American Bakeries' potential request, and would then
sell American Bakeries all required propane fuel to run the converted trucks. American
Bakeries never requested a single conversion. Empire sued for lost profits. Who wins?
American Bakeries wins because this was a requirements contract which does not
require any purchase from Empire (contract chỉ yêu cầu convert đồng giá trị chứ hong có
mua). Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed
to accept the foundation if Melnick guaranteed to repair any damage that was caused
by the defects in the future. Melnick agreed, but when Gintzler called Melnick two years
later to repair water damage resulting from the foundation defects, Melnick refused to make
any repairs. Gintzler sued, and Melnick argued that his promise to make future repairs was
unsupported by consideration. Who will win the suit? Gintzler will win because he gave
consideration.

After going through her old clothes, Farra asks her friend Michelle if she would like to buy
any of them, stating she is hoping to get at least $50. Michelle responds that she will pay
$5 for each piece that she would like to buy. The next day, Michelle tells Farra that she
does not want any of the clothes. Has Michelle violated the agreement with Farra? No,
because of Michelle's illusory promise, she and Farra did not have an enforceable
agreement (không có hợp đồng hay gì có tính pháp lý chứng minh Michelle mua hết, nói
suông thôi). Maybelline falls down a well and is saved when her neighbor Ruben makes a
very daring rescue. Ruben hoists (kéo lên, nâng lên) her to safety, and Maybelline hugs him
and promises him a check for $100,000 for his kindness. Ruben is delighted and when
Maybelline visits him the next day and again mentions the $100,000, he tells her that he is
going to quit a his job as a preschool music teacher and use the money to start a
business. Two days later he resigns from the nursery school and calls Maybelline and
asks when he can expect his money. He is startled when she replies that she is not going to
give him a cent. Will a court enforce Maybelline's promise? Yes, because Ruben relied on
the promise. For seven years, Stanford Owens has run a successful practice that helps
small businesses file their taxes, become incorporated, and perform other legal tasks.
Stanford moves his practice to NYC, and is happy to find his first local client, DiggyWerx,
almost immediately. They negotiate a flat fee of $5,500 for six months of Stanford's
services. A month later, Stanford is more familiar with the local business landscape and
realizes that most people offering his services in NYC charge around $13,000 for six
months of work because of the higher costs to do business in NYC. Is the deal between
Stanford and DiggyWerx enforceable? Yes, because Stanford and DiggyWerx each
receive and incur a detriment.

Tim's Lumber Co. agrees to provide Deckbuilders, Inc. with all of the wood that
Deckbuilders requires for the next five years. Deckbuilders agrees not to buy wood
from any other vendors. What is the primary restriction on how much wood
Deckbuilders may demand? Deck builders' demand for wood must be made in good faith.
Lisa makes hand-crafted beads. Lisa approaches Julia, a successful jewelry maker, and
offers to sell her beads exclusively to Julia if Julia agrees to buy all of the beads that Lisa
makes. Julia agrees to buy all of the beads Lisa produces each month if, after inspecting
them, Julia thinks they will sell well. Do Lisa and Julia have an enforceable contract? No,
Julia has made an illusory promise. Richard hires Paul to paint his kitchen in two
eight-hour days of work for $500. At the end of the first day, the kitchen is 85 percent
complete. Richard asks Paul to stay late and finish. Paul agrees to stay and complete
the painting if Richard pays him a total of $750 for the job. Richard agrees. Does Richard
owe Paul the additional $250? Yes, Paul provided the additional consideration of
working overtime and completing the work in a shorter time period than originally
agreed. Rodolfo hires Tessa to paint the exterior of his house. Two days into the project,
smoke from a nearby forest fire blows onto the property and stains her work. Tessa will
have to start again. Tessa asks Rodolfo to pay for the additional labor and materials,
and Rudolfo agrees. Tessa completes the job, but Rodolfo refuses to pay the additional
fee. Tessa sues. What outcome? Rodolfo owes Tessa the additional money because
Tessa promised to re-paint the stained areas of the house and needed more paint to do
the job.

Seth finds a lost dog and returns her to her owners. The overjoyed owners promise Seth
$500, but never send him the money. Seth cannot collect the money because it was
offered in response to something Seth had already done. (nếu mà chủ chó đăng bài hứa
trả tiền trước khi ông này tìm thấy con chó thì ổng sẽ có thể sued để lấy tiền) In March,
Louisa's Hamburger Stand contracts with HydrationCorp to buy 100 bottles of lemonade for
$100 and an additional 100 bottles of lemonade for $115 on May 1. After the purchase and
delivery of the 100 lemonades in March, Louisa speaks with a HydrationCorp
representative, and they agree that on May 1 HydrationCorp will instead sell Louisa 100
bottles of iced tea for $115. What will result? The new terms may be binding because an
oral modification may be binding under the UCC (uniform commercial code - bộ luật
thương mại thống nhất). Mary pledges $30,000 to a school for the blind. In reliance on
Mary's promise, the school hires an architect to build a cafeteria. Two months later Mary
takes back her promise. The school sues, and the judge will likely rule that the school will
be able to enforce the promise with "moral consideration". Alonzo graduates with a 3.8
GPA in Accounting from a New York university and receives offers of employment from
three of the Big Four accounting firms. While considering his options, a mid sized firm in
California calls and offers him twice the starting salary of his top offer. The only caveat
is he needs to be in Los Angeles within the next week. Alonzo excitedly decides to take
the California job. He refuses the other employment offers, breaks his lease in New York,
sells or gives away most of his possessions, buys a new car, and heads for L.A. the next
day. When he arrives three days later, the firm apologizes and informs Alonzo that the
position is no longer available due to the loss of a major client. Based on these facts,
does Alonzo have a potential claim against the accounting firm? Yes, on the theory of
promissory estoppel. Mallory hires Raghav to work for one year as an assistant manager
at $5,500 per month, reserving the right to cancel the contract at any time. After two
months, Mallory fires Raghav because the company's order volume drops. Can Raghav
recover payment for the remaining 10 months on the contract? No, because both parties
are not bound by the contract.

Sophie is an accomplished plastic surgeon who has lost her medical license due to her
addiction to illegal drugs. Vanessa hires Sophie for a "filler party" in which Sophie, using a
simple medical procedure designed to reduce wrinkles, injects a filler into the foreheads of
Vanessa and ten of her friends. Vanessa fails to pay Sophie, and Sophie sues. What will
result? Sophie will lose because she does not have a medical license. KwikKash is a
payday loan company that gives cash to borrowers for a large fee. KwikKash recently
loaned Claudette $1,000 and required that she pay back $1,500 within 30 days.
Claudette fails to repay the loan, and KwikKash sues. What is the most likely result?
Claudette will win because the loan violates usury laws (LUẬT CHO VAY NẶNG LÃI).
When Alistair drops off his tuxedo at Whett Dry Cleaners for dry cleaning, he signs Whett's
standard exculpatory clause, which releases Whett from all liability in the event that
any item of clothing is damaged, lost, or stolen while in its care. When Alistair returns to
pick up his tuxedo, he is informed that the garment tore during the dry cleaning process.
Alistair sues. Which of the following results is most likely? Alistar loses because this is a
valid exculpatory clause.

When Tremaine arrived in Cincinnati, he rented an SUV from a car rental company in the
airport terminal. A month after the trip, he noticed that the charge on his credit card for
the SUV was much higher than he anticipated because the rental company had charged
him $30 per gallon to refill the gas tank. He reviewed the eleven-page rental contract and
noticed on a page seven a provision about the gas charge. He saw another provision
on page ten stating that in order to file a dispute with the company he would be
charged a $750 "Investigation Fee" for his claim to be reviewed. Tremaine sues the
rental company. Which of the following outcomes is most likely? Tremaine will win
because the contract was procedurally and substantively unconscionable. Over her
objections, Carlene's husband Silvio borrows $10,000 from his friend Evan so that he
can achieve his dream of swimming with great white sharks in South Africa. Carlene knows
Silvio has a reputation for being reckless, but she still finds it pretty alarming that Evan and
Silvio's friend Constantine and Silvio's business partner Persephone each take out a life
insurance policy on Silvio a month before his trip. Who can legally have an insurance
policy on Silvio? Evan (tại cho ông kia mượn tiền), Persephone (có ràng buộc trong công
việc) and Carlene (vợ hợp pháp trên giấy tờ). (nhỏ còn lại không liên quan vì không có gì
ràng buộc với ông chồng hết)

Rudolph hired Moe to walk his dog every weekday. Rudolph hands Moe a check for a
month of excellent work. "Thanks!" says Moe. "This will help me pay for the silly citation I
just got from the city, since I never licensed my dog walking business. They make us get
licenses just to raise money for the city! What a scam." When Rudolph learns that Moe's
business is unlicensed, he refuses to pay. What will result? Rudolph owes Moe money
because the licensing issue is irrelevant to their agreement (dắt chó đi bộ là hết sức bth,
trường hợp này không nhất thiết phải có license, nếu huấn luyện chó thì cần). Zazzles
Jewelry sells Chic Boutique 150 necklaces. Zazzles sues when Chic defaults on (trả thiếu)
its payments, and the court finds that some of the repayment terms in the contract are
unconscionable because they place undue burdens on Chic. Zazzles is willing to make
the repayment terms more favorable to Chic but wants the rest of the contract enforced.
What is likely to occur? The contract is governed by the UCC, so the court may choose to
enforce the remainder of the contract. For 20 years, Art's Flower Shop relied almost
exclusively on advertising in the Yellow Pages to bring business to its shop in a small
West Virginia town. One year, the Yellow Pages printer accidentally did not print Art's ad,
and Art's suffered an enormous drop in business. Art's sued for negligence and won a
judgment of $50,000 from the jury. The printing company appealed, claiming that under an
exculpatory clause in the contract, the company could not be liable to Art's for more than
the cost of the ad (about $910). Art's claimed that the exculpatory clause was
unconscionable. The clause is unenforceable because it is unconscionable. Guyan
Machinery, a North Carolina manufacturing corporation, hired Albert Voorhees as a
salesman and required him to sign a contract stating that if he left Guyan he would
not work for a competing corporation anywhere within 250 miles of North Carolina for
a two year period. Later, Voorhees left Guyan and began working at Polydeck Corp.,
another North Carolina manufacturer. The only product Polydeck made was urethane
screens, which comprised half of 1 percent of Guyan's business. Is Guyan entitled to
enforce its noncompete clause? No, because it is not essential to the employer.

Richard and Michelle Kommit live in California, where gambling on credit is illegal. They
travel to New Jersey, where they used their credit card to withdraw cash from an ATM
conveniently located in the "pit" the gambling area of a casino. They ran up debts of
$5,500 and did not pay. The California National Bank (the issuer of the credit card) sued
for the money in a California court. Who wins? Richard and Michelle Kommit (cặp này
gây nợ ở NJ nên phải sued ở NJ chứ). Professional Basketball teams have been pursuing
Cody, a recently graduated high school athlete, for nearly two years. Cody and his father
hired an experienced agent to represent him in contract negotiations with the various
teams. Unfortunately, just before meeting with the agent to review contracts, Cody's father
was hospitalized in critical condition following a car accident. Despite knowing that Cody
would be alone, the agent insisted that they meet and Cody decide on a team to work with.
The agent convinces Cody to sign a lucrative contract with a top-rated team, but the
agreement contains a non competition clause that would keep Cody bound to that
team for his entire career. The contract has a 10-day grace period for review and
cancellation with no penalty. After Cody's dad recovers and returns home from the hospital
two weeks later, they discuss the contract and seek to cancel it. Is it likely that Cody will be
able to avoid the contract? Yes, because the non-competition clause is oppressive
(burden on shoulders).

Oceanview Enterprises offers scenic cruises to exotic destinations in the South Pacific,
such as Tahiti and the Marshall Islands. In December of each year, the cruise line provides
customers an opportunity to enter a lottery for a limited number of exclusive tickets
sailing to a "hidden" unnamed island. Malik is fortunate enough to win the right to buy two of
the expensive cruise tickets for herself and best friend Jecala. When she receives the
purchased tickets through the mail, Malik notices the back of each has the
following statement: "The purchaser and/or passenger of this ticket agrees that any claim
against Oceanview Enterprises or its employees will only be resolved in courts of
Oceanview's home state of Alaska. This ticket is non refundable." Is it likely the clause
on the ticket would be enforceable against Malik? No, because Malik did not have notice
of the clause before the ticket purchase. (cái statement ko được báo khi cty đó mở lottery)
For his 17th birthday, Asher bought himself a used car from a car dealer for $10,000. The
dealer purchased it for $6,000, repaired it, and then sold it to Asher. Eighteen months
later, Asher has almost finished paying off the car when he totals it by accidentally driving it
into his neighbor's swimming pool. Asher's mother is a lawyer and tells him to rescind the
contract. Will Asher be able to recover any money from the dealer? No, because he
ratified the contract. (phần minor) The McAllisters had several serious problems with their
house, including leaks in the ceiling, a buckling wall, and dampness. They repaired the
buckling wall by installing I-beams to support it, but never resolved the leaks or the
dampness. When they decided to sell the house, they said nothing to prospective
buyers about the problems. If asked, they stated that the I-beam had been added for
reinforcement. The Silvas bought the house for $60,000 and immediately began to have
problems with leaks, mildew, and dampness. Are the Silvas entitled to any money
damages? Yes, the Silvas are entitled to damages for both fraud and nondisclosure (ko
tiết lộ).

Susan drops by Dean's garage sale and buys a painting for $10 that both she and Dean
think is a copy of a piece by Matisse, a well-known painter. Later, Susan is delighted to
discover that the painting is actually an original Matisse and is worth $50,000,000. Dean
hears the news and wants the painting back. Will he get it? Why or why not? Dean is
entitled to rescind. This is a mutual mistake because both parties made an important
factual error. Mina, a real estate developer, reads that the tiny town of Lakeview is
considering building a large shopping center and adding public transportation from the
nearby city to Lakeview. Mina knows that these types of changes would greatly increase the
demand for real estate in Lakeview. She buys 10 acres of land in Lakeview from Arlen, so
that she can build houses and take advantage of the town's economic boom. There is no
reference in the purchase and sale agreement or deed to the possible development in
Lakeview. A few weeks later, the town declares that, due to changes in zoning laws, it is
not building the shopping center or adding the public transportation. Can Mina rescind on
her contract with Arlen? No, because she understood the risk she was assuming.
794 → 863 (Vanh)
Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M&M Precision Body and
Paint for body work and a paint job. M&M did the work and charged $1,900, which
Travis paid. Travis later complained about the quality of the work. M&M
did some additional work, but Travis was still dissatisfied. He demanded his $1,900
back, but M&M refused to refund it because all of the work was "in" the car and Travis
could not return it to the shop. The state of Nebraska, where this occurred, follows the
majority
rule on this issue. Does Travis get his money? Definitely yes, Travis will get his money
because a minor is permitted to disaffirm a contract and get a full refund of his money,
even if he is unable to make restitution. Another case, Roy Newburn borrowed money
and bought a $49,000 truck from Treadwell Ford. A few months later, the truck began
having transmission problems. Newburn learned that the truck had 170,000
more miles on it than the odometer indicated. Treadwell admitted the mileage error and
promised to install a new transmission for free. When Newburn came to pick up the
truck with the new transmission installed by Treadwell, the company refused to turn over
the truck until Newburn signed a general release of the dealership's liability for any
claims based on the inaccurate mileage, which Newburn signed. One month later, the
truck broke down, and the resulting delays cost Newburn so much income that he fell
behind on his loan payments and lost the truck. He sued Treadwell, whichdefended
based on the release. Is the release valid? → In this case, the answer is NO. The
release is not valid. This meets all of the criteria of a clear case of economic duress.
Treadwell made an improper threat, forcing Newburn to enter into the contract.

Family Case (applying for legally binding contract) (bỏ qua description về family -
gây nhiễu)
Tom and Harriet, adult siblings, are taking their parents on a weekend trip. They pick up
their father, Luther, at his house where he is singing a goodbye song to each of his 20
plants, and eating pancakes out of his coat pocket. Next, they drive to an assisted living
facility, to collect their mother, Augusta, who has lived there since a judge declared her
mentally incompetent a few years ago. When they arrive at their hotel, Luther writes
postcards to his plants, Augusta knits a sweater, Harriet goes for a walk, and Tom
orders a glass of scotch. When Harriet returns, she learns that a hotel guest sold Tom
and her parents each a souvenir snow globe for $1,000. The snow globes are for
sale in the hotel gift shop for $5. Harriet is furious. Can her family members get their
money back? →
The sale to Augusta is void; the sales to Luther and Tom may be voidable. Therefore,
the family members cannot get their money back.

Majority or Minority case

Jacobi is visiting Sheila at her apartment while she is redecorating, and Sheila asks him
if he would like to buy her two sofas that she is replacing. Sheila tells Jacobi that the
sofas are in great condition and are the most comfortable she has ever had. She
acknowledges that some of the fabric on the sofas is slightly worn but says that is their
only issue. Jacobi buys the sofas on the spot, but once they are back at his house he
finds that one of them is infested with bed bugs. Jacobi has to throw out the infested
sofa and pay a special exterminator to come and get rid of the insects. Jacobi sues
Sheila. Assume their jurisdiction follows the majority approach. If Sheila had a
reasonable belief that she was telling the truth, Jacobi can rescind the contract, but he
cannot collect damages.
→ read majority and minority in chapter 16.
Another case of Majority and Minority: Jonah is 12 years old (minority) and
absolutely loves soccer trading cards. At the local hobby shop, he finds a "Lionel Messi"
trading card in the case, which has a handwritten tag by it that reads "9/00-." The
employee at the front desk interprets this to mean $9.00 and sells Jonah the card for
that amount. A few days later, Ronaldo, the card shop owner calls Jonah and asks for
the card back because it is worth around $900. Jonah refuses, and Ronaldo sues.
Jonah's strongest argument is that neither Ronaldo nor Jonah knew the real value
of the card.

Ellen and Allen are interested in renting Lyle's country house for the summer. Lyle tells
them about the house, volunteering the property's square footage, the number of
bedrooms, and stating that the house has a heated pool and a hot tub. The next day,
Lyle learns that the pool is going to be drained for the summer as it undergoes repair.
Must Lyle disclose → (should) this information to the potential renters? The answer is
YES, because Lyle previously told them about the pool.

Valid, Void, Voidable, or Enforceable?

Alex, a 25-year-old banker, joined his friends at a "pub-hopping" (rượu bia party trip)
trip that had participants visiting six bars in a two hour span of time. Between the fifth
and final pub stop, a highly intoxicated Alex stopped to use the bathroom at a local
luxury car dealer, who was holding a special evening sales event. Seeing all the cars
and thinking he was signing up for training as a race car driver, Alex mistakenly signed
a contract to purchase the $188,425 emerald green Ferrari displayed in the showroom.
The next day, a sober Alex found the contract paperwork at the foot of his bed, and with
no memory of the previous evening, quickly headed to the dealership. As he began to
explain to the sales manager Janine about the drunken purchase mistake, he changed
his mind, and decided to keep the car. Manager Janine, however, took the contract copy
from Alex and ripped it up, saying "You're not responsible enough to own this car." In the
end, Alex has to keep the Ferrari, as Janine can’t void the contract. Just before
turning 18 years old, Caitlynn goes to the local Driver Examination Office to test for
her driving license. When she passes with a perfect score (full điểm), her parents
allow her to go alone to the local car dealership and purchase her first car. She signs a
contract to buy a used lemon-yellow Volkswagen Beetle with payments of $225 per
month for 3 years. Unbeknownst to Caitlynn and her parents, the car was a trade-in,
and the dealer was still waiting to receive the title. Caitlynn drives the car until six
months after she turns 18, making the payments each month, but then decides she
hates the yellow color, and returns it to the dealer. The dealer refuses to take the car
back. Is Caitlynn obligated to the car purchase contract? In this case, the answer is
obviously NO, because the original contract was VOID.

Able orally agreed to pay Carr $800 to restore Able's antique car within 18 months, even
though it was possible for him to complete the restoration in 10 months. The agreement
is ENFORCEABLE because the work could be completed within one year. → review

Chapter 2
Another case: Griffiths sold his house to Hippen, Griffiths orally agreed to buy the house
back at the selling price if Hippen should happen to move within the next three years.
Two years later, Hippen was transferred to Miami and tried to sell the house back to
Griffiths, but Griffiths refused. Hippen sued for breach of contract, but Griffiths claimed
there was never an enforceable contract. Who wins? → Applying the definition within
chapter 2, Griffiths wins. The purchase - or repurchase - of a house is a classic interest
in land, and any such promise must be written to be enforceable.

Rental case:
CASE 1: Lorna and Igor make a verbal agreement that Lorna will buy a house Igor
owns. They agree on the price and a closing date in sixty days. Before closing, Lorna
moves into the house with her mother, remodels one of the bathrooms, and paints the
kitchen. A week later Igor tells Lorna he does not want to go through with the deal.
Lorna cannot ENFORCE the deal because her actions were not sufficient to be
considered part performance.

CASE 2: Terrance, a recent college graduate, moves to New York City to open the
second branch of his mother's business. He plans to work from his apartment full-time.
The landlord of the apartment that Terrance applies for is not convinced that Terrance
will be able to afford the rent. So Terrance's mother Gloria (who is extremely rich)
speaks with the landlord and tells the landlord that if Terrance fails to pay his rent, Gloria
will pay it for him. When Terrance fails to pay his rent, the landlord requests the money
from Gloria, who refuses. The result show that: Gloria will not be responsible for
Terrance's debt unless the landlord can prove that Gloria made the promise out of
self-interest

Offer and Acceptance → review Chapter 3

Mast Industries orally offered to sell certain textiles to Bazak International for $103,000.
After a few days, Bazak sent a memorandum, signed by a Bazak officer, to Mast
confirming the agreement, describing the goods,and specifying their quantity and the
price. Mast received the memo but never responded. When Mast failed to deliver the
goods, Bazak sued. Briefly reading, Batak wins. Landlord owned a clothing store
and agreed in writing to lease the store's basement to another retailer. Both parties
signed a written lease that (1) described the premises exactly, (2) identified the parties,
and (3) stated the monthly rent clearly. However, a trial court held that the lease did not
satisfy the Statute of Frauds. Because, the writing needs to state the effective dates of
the lease. If yes, the situation is in the contrast situation.

Officially an agreementcontract or not?

Sabrina tells her boyfriend Alexander that if they get married, she will give him 50
percent ownership of her tech startup company. Alexander quits his job as a teacher
and begins working at Sabrina's company. The two get married but divorce ten months
later. Alexander claims that Sabrina owes him 50 percent of her company. → It would
be noted that Sabrina owes Alexander NOTHING because the agreement was not in
writing. → NOT LEGALLY BINDING

Norv and Wanda agree verbally that Wanda will buy Norv's house, and that Norv will
also sell her his living room furniture for $1,000. They agree on a total price, and that
the deal will close in 30 days. Norv prepares his house for Wanda, taking out all his
possessions, and leaving the living room furniture. Two weeks later, Wanda tells Norv
she does not want to go through with the deal. Can Norv enforce his agreement with
Wanda? → Norv cannot ENFORCE the deal because it was not in writing. Arabella
sells Ann all of her bowling equipment for $1,100. The next day Arabella regrets the
deal and tries to rescind the contract. Arabella argues that the agreement is invalid
because it should have been in writing, and therefore she has to refund Ann the money,
and Ann has to return the bowling equipment to Arabella. Arabella is incorrect be
cause the contract is fully executed. (thầy đã sửa, không đổi đáp án)

Mariko wants to buy one of Clare's rowboats, so the two draft a contract for its sale. The
contract reads: "Binding Agreement: Mariko will buy one of Clare's small rowboats in
February. Mariko will pay cash, and Clare will deliver the rowboat to Mariko." If both
parties signed the agreement, will it satisfy the Statute of Frauds or not? The answer is
NO due to the contract is too vague to sign. Iggy verbally agreed to sell frozen hotdogs
to Hachiro. He sent a signed memorandum to Hachiro, which read, "Pursuant to our
conversation, this is to confirm your order of 100,000 frozen hotdogs for $0.15 each,
which you will pick up at my manufacturing plant on November 1 of this year." Upon
receiving the memorandum, Hachiro called Iggy and told him the deal was off. On
November 1, Hachiro did not collect any hotdogs (? not so understand this detail).
In this case of Hachiro, PP will win if it cannot sell the sweaters elsewhere.

REVIEW THIS CASE!!!

Performance on the contract
The Uptown Mall has hired Bryce to be the mall's Santa Clause for the upcoming
season. Bryce and the mall manager discussed on September 6, 2016 the terms for his
employment as "Jolly Ole' St. Nick" for the December holiday seasons of 2017 and
2018. After orally agreeing to perform both holidays, Bryce realized he had a conflict for
2017, so informed the manager on September 10, 2016 that he could only be available
for the 2018 season. The manager told Bryce "no problem" and found another Santa for
2017. After performing forthe mall as Santa Claus in 2018, the mall refuses to pay Bryce
for his services. If Bryce files a claim against the mall for the wages he earned, Bryce
wins, because he fully performed his obligations under the contract.

The Roberts family just received news from Jo-Anne Roberts' employer that she was
receiving a prestigious promotion to Corporate Vice President. The new position was in
New York City, nearly 3,000 miles away from their home in Los Angeles, California.
Because Jo-Anne needed to find a place to live in the city quickly, sheagreed to
purchase via phone a 2,000 sq. ft. apartment located a few blocks from her new office.
JoAnne wired the owner a payment of $500,000 against the $3.7 million negotiated
price of the apartment. Without waiting for further word from the owner, Jo-Anne and her
husband Albert loaded their 3 children and 2 cats into their SUV and headed for the "Big
Apple." Once arriving New York, the family moved into the apartment and redecorated
the entire interior, at a cost of $350,000. After living in the apartment for two months,
Jo-Anne wired another $500,000 payment to the owner, who called immediately after
receiving the payment and said the deal was off. Jo-Anne can keep the apartment as
she has completed part performance on the contract. (incompleted perform
maybe also counted as legally binding - waiting for confirmation idk)

Compensation?
Daquan designs and manufactures ReaderWranglers, which are beaded, nylon cords
that attach to reading glasses and sunglasses, to help prevent people from losing them.
Daquan calls Magnus, the CEO of several assisted living facilities for senior citizens,
and they agree that Magnus will buy 10,000 ReaderWranglers for $3 each and that
Daquan will deliver them to Magnus at Mount Olympus Seniors (MOS) in one month.
Daquan arrives at MOS on the specified date with 8,000 ReaderWranglers and Magnus
refuses to accept the delivery. Daquan sues. The result shows that Magnus must pay
for 8,000 ReaderWranglers.

Consideration, Promissory estoppel and Formalities

Piper is suing Dimitri for breach of contract. Her lawyer admits into evidence a fully
integrated contract signed by Piper and Dimitri stating that Dimitri will sell Piper his
beach house for $250,000. Will Dimitri be allowed to testify that he only signed the
contract because Piper had a gun to his head is YES. The court will admit evidence that
Dimitri signed under duress. Lauren verbally agrees to sell Dante 500 Bietigheimer
apple trees, which are currently too small to be transported. Lauren and Dante agree
that Lauren will have the trees delivered when they reach maturity in 18 months, and
Dante will pay in full when he receives them. Dante then buys a 10 acre parcel of land
that has soil suitable for Bietigheimer apple trees, and he pays a farmer to clear the land
and begin preparing it for the arrival of the apple trees next year. Lauren then calls
Dante and tells him that she is selling the trees to someone who offered her more
money. Dante sues. The results shows that: Dante will win under promissory
estoppel.--> See Chapter 5

Officially/Legally Agreement
Cozette hires Baldrick to cook dinner for her family three nights per week for an entire
year. Nine months into the agreement, Baldrick dies of food poisoning. Baldrick's estate
sues Cozette for Baldrick's salary for the rest of the year. The result shows that the
agreement will be discharged due to true impossibility. Another case: Omkara, a
furniture manufacturer, contracts with Foam Gnome for $50,000 worth of foam, which
Omkara will use for making ten sofas she has agreed to make for Duke's Furniture. A
day before Gnome is going to ship the foam to Omkara, a flood destroys its entire
inventory. Gnome tells Omkara it cannot send her the foam in time, but tells her that
FirmFoam can supply her with an identical shipment for $65,000. This increase in price
will wipe out twenty percent of Omkara's profit from her contract with Duke's. Omkara
wants to get out of both contracts. The conclusion: Omkara's agreement with Gnome
is discharged due to true impossibility. Omkara's agreement with Duke's is not
discharged and she must perform. Andy agrees to buy Charlotte's house. The
purchase and sale agreement states that if the house passes an inspection, the
parties are obligated to go through with the deal. The clause about the inspection is a
condition precedent.
Ted and Aisha enter into a contract that states that Aisha will buy Ted's vintage sports
car after Ted replaces the engine and fixes the transmission. The contract contains a
"time is of the essence" clause, requiring Ted to have the car ready for the sale by
February 13. On February 12, Ted calls Aisha and says he needs two more days to
complete the repairs. Aisha declines and buys another car. Did Aisha breach the
contract? → (approved) NO, because the contract contained a “time is of the
essence” clause → REJECTED. Silas has agreed to dig five wells on Noreen's
property over the next month, working each weekday. One Friday, after Silas has
completed three wells for Noreen, he informs Noreen that on Monday he is going to
start a project digging sixty wells for Romeo and that job will take him about a year. This
means that Silas has committed an anticipatory breach. Noreen is discharged and
may immediately hire someone else to dig the wells. She may also sue Silas for
breach of contract. → repeatedly review this one (!)

Alex contracts with Rashard to purchase thirty umbrellas. Rashard ships the umbrellas
to Alex, and Alex mails Rashard payment. When the umbrellas arrive, Alex is shocked
to see that the fabric canopy at the top of each umbrella is made out of paper towel and
is not waterproof. Alex sues, and Rashard argues that he never indicated that the
umbrellas were made out of waterproof material. The result shows that Rasher will lose.
The parties did not agree on the exact specifications of the umbrella, but the court
will imply condition that the umbrellas be waterproof. Evans built a house for Sandra,
but the house had some problems. The garage ceiling was too low. Load bearing
beams in the "great room" cracked and appeared to be steadily weakening. The patio
did not drain properly. Pipes froze. Evans wanted the money Sandra promised for the
job, but Sandra refused to pay (coi chừng lộn). In this circumstance, Sandra wins
because Evans did not substantially perform. Franklin hires Angela to paint his
portrait. She is to be paid $50,000 if the painting is acceptable "in Franklin's sole
judgment." At the big unveiling, 99 of 100 attendees think that Angela has done a
masterful job. Franklin disagrees. He thinks the painting makes him look like a toad.
Franklin refuses to pay, and Angela sues Franklin. This case, Angela loses because this
is a personal satisfaction contract.

Krug International contracted with Iraqi Airways to build equipment for training pilots.
Krug then contracted for Power Engineering to build the specialized gearbox to be
used in the training equipment for $150,000. Power did not know that Krug planned
to resell the gearbox to Iraqi Airways. When Power had almost completed the gearbox,
the Gulf War broke out and the United Nations declared an embargo on all shipments to
Iraq. Krug notified Power that it no longer wanted the gearbox. Power sued. However,
Krug wins because of true impossibility. Rothman's clothing store had a 20- year
lease in a shopping center in Phoenix, Arizona owned by Foundation Development. In
Addition to monthly rent, Rothman's was obligated to pay common area charges four
times a year. The lease stated that if Rothman's failed to pay on time, Foundation could
send a notice of default. Then if the store failed to pay all money due within 10 days,
Foundation could evict. On February 23, Foundation sent to Rothman's the common
area charges for that quarter. Rothman's believed the bill was in error and sent an
inquiry on March 18. On April 10, Foundation insisted on payment of the full amount
within 10 days, but it sent the letter to Rothman's Phoenix office, which was not
responsible for paying the bill. The Phoenix office forwarded the bill to the relevant
executive in New York, who received it on April 20. Rothman's issued a check for the full
amount on April 24 and mailed it the following day. On April 28, Foundation sued to
evict. On April 29, the company received Rothman's check. Will Foundation be able to
evict Rothman's? → (đã hỏi thầy case info) NO, based upon the “good faith”
requirement.

READ CAREFULLY
Thirty-five members of the Ortiz extended family were spread across three
states—Illinois, New York and Florida—and they rarely were able to get everyone
together. For Thanksgiving 2018, Mary Elizabeth Ortiz decided to surprise her family by
booking a mountain retreat for the entire clan.She especially wanted to celebrate her
uncle's return from overseas military service. On September 15, 2018, Mary rented a
spectacular lodge in the Tennessee Smoky Mountains with over 20 bedrooms and an
incredible view, paying in advance the full $2,500 per night fee for 3 evenings, but not
purchasing travel insurance. The lodge had the following cancellation policy: "A sixty
(60) day notice is required for cancellation. Cancellations that are made within 60 days
of the arrival date, for any reason, forfeit the full advance payment and reservation
deposit. You are advised to purchase travel insurance separately if cancellation costs
are a concern." The rental contract also stated that the only exception would be for "acts
of God, such as fires or earthquakes." One week before Thanksgiving, Mary's uncle had
a heart attack and was hospitalized. The next day, November 16, 2018, Mary cancelled
the reservation, and requested afull refund, which the lodge refused to provide. Does
Mary have a claim for the return of her $7,500? → Marry doesn’t need to claim, Mary
has no theory that supports her claim.

Alais is a clothing fashion designer known for her French style of elaborate heirloom
smocking combined with industrial elements. Planning for an upcoming show in Paris
on September 26, she orders on September 10 300 yards of a custom reflective
material from Rutherford Industries for her seamstresses to hand smock. The supplier
promises to deliver the material before September 20, so Alais will have time for her
staff to complete the sewing. When the cloth doesn't arrive until the evening of
September 21, Alais files a claim for breach against Rutherford. In this case: Alais
prevails because the breach was material. Yvonne promises to sell 500
pounds of rice to Zed at market price. To secure Zed's rice, Yvonne enters into a
contract with McKinley Venturesto to ship the cargo. The contract stipulates that
McKinley will deliver the rice to Yvonne within 48 hours. However, the rice does not
arrive for 5 days, during which time the market price of rice decreases 11 percent.
Because of the delay, Yvonne lost considerable profit. Can Yvonne recover her
damages because of McKinley's breach? → (approved) NO, because it was not
foreseeable to McKinley that the shipping delay would cost Yvonne so much money.

John contracts with FashionWare for the purchase of 1,000 zippers for $1 each. The
agreement states that John will pay $500 when the contract is signed and the remaining
$500 when FashionWare delivers the zippers. In the contract, John specifically states
that he is buying the zippers for the manufacture of 1,000 windbreaker jackets for
Campers' Crevasse, which he is contractually required to deliver to Campers' Crevasse
in 30 days. FashionWare breaches the contract, causing John to miss his delivery date
with Camper's Crevasse, which then cancels its contract with John. What remedies are
available to John? John can recover from FashionWare the $500 he paid for the
zippers, any reliance interest, and the expectation interest from his contract with
Campers' Crevasse. Desmond has been a fan of Crispin's paintings for years and is
thrilled when the artist promises to give him painting lessons. The two agree that Crispin
will provide Desmond with five weekly lessons for $1,000 each, payable once the
lessons are complete. After teaching Desmond two lessons, Crispin dies of a heart
attack. Crispin's estate sues Desmond for the $5,000 payment for the art lessons. At the
end, Crispin's estate will be able to recover $2,000 in restitution.

Harlowe purchases a watercolor painting by a prominent local artist and a

RecumbentSloth brand recliner from a yard sale. She pays cash for both items, and the
seller promises to deliver them next week. Two days later the seller calls Harlowe and
says he no longer wants to sell the items and sends Harlowe back her money. If
Harlowe sues, Harlow will be able to get the painting but not the chair (idk ?). Over
spring break, you go to Florida and accidentally spend too much on your checking
account's debit card. When you get back to school, you are shocked to see you owe
your bank $220, which you pay back immediately. However, you have not even had
time to recover from your sunburn before the bank informs you that, pursuant to the
liquidated damages clause in the contract you signed when you opened the account,
you are being charged a $55 "overdraft fee" for every transaction you made on your
debit card after your balance was $0. Unfortunately, you made nine such transactions,
which means you owe the bank an additional $495 in fees (9 x $55 = $495). What is
your best argument against the overdraft fees? → Because the fee is too high, and the
bank is simply imposing a penalty.

Anna worries that her brother Nick does not have good health insurance, so she writes
a contract stating that if he mows her lawn on the last Saturday of every month she will
buy him an expensive insurance policy that he could not otherwise afford "for at least
the next six months, and longer if necessary." The next week, Nick gets a great job
at an investment bank, which provides him health insurance coverage. Anna
congratulates Nick and revokes the deal. The breach of contract infuriates Nick, who
sues his sister. In this situation, the court will award Nick nominal damages. Pamela
was injured in an auto accident by an uninsured driver. Pamela filed a claim with
her insurer, American Mutual, for $2,000 under her "uninsured motorist" coverage.
American Mutual told her that if she sought that money, her premiums would go "sky
high," so Pamela dropped the claim. Later, after speaking with an attorney, Pamela
sued. Her attorney is like to make a claim for punitive damages.

REMEDIES → See Chapter 12 (remedies, duress)

Rick was in the process of buying 320 acres of land when Rick signed a contract to sell
that same land to Simon. Simon paid Rick $144,000, the full price of the land. Before
Simon could complete the purchase of the land, Rick went bankrupt. → Remedies
should Simon seek from Rick is RESTITUTION. Lewis signed a contract (Check this
info carefully) for the rights to all timber located on Nine-Mile Mine agreeing to pay $70
per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced
that Lewis lacked sufficient equipment to do the job well and forbade him from entering
the land. Lewis sued. Nine-Mile moved for summary judgment. The mine offered proof
that the market value of the timber was exactly $70/mbf for which Lewis had no
contradicting evidence. The court granted summary judgment. → The market value
evidence shows that Lewis suffered no harm and, therefore, had no claim. John sold a
Vermont lakeshore lot for $115,000 to Deborah who intended to build a house on the
property. John indicated the land was suitable for the project, but Deborah soon
learned that a wetland protection law prevented building near the lake. Deborah
sued, seeking rescission of the contract. The likely outcome would be that Deborah will
likely win restitution damages. ( → see case 3 chap 7)

Ike is building a water park in Charleston, South Carolina, with attractions that are larger
and more extravagant than anything in the area. Ike cannot afford delays in
construction and is nervous about his contractor's ability to finish the project on time.
What can Ike doprotect himself is that he should include a liquidated damages
(Difficulty of quantifying damages no bar to recovery) clause in the contract. Hector is
outraged by the Ellsworth Elementary School charity auction when the school
invalidates his winning bid on a trip to Paris, refunds his money, and refuses to give him
the plane tickets he won. He suffers no real harm because a group of sympathetic
parents pool their money and buy him a comparable trip, but the breach by the school
still stings, so he sues. The result (MOST LIKELY thôi, not totally) Hector will win
nominal damages. Romanita is offered $500 to climb to the top of the academic center,
the tallest building on the university campus. Before climbing the 80 foot tower,
Romanita purchased ropes, boots and a safety harness, as well as other equipment, at
a cost of close to $150. After two weeks of preparation and encouragement by the
offeror, Romanita arrives at the tower. However, just before her feet leave the ground on
her ascent up the tower, the offeror withdrew the offer, citing safety concerns. Romanita
hasn’t need to claim for 500$ (NO) → but she has a potential claim for the cost of
the climbing equipment. Damon contracts with Steve Redmont of Redmont Roofers,
Inc. to replace the roof on his 1850 Greek Revival mansion in Ohio by April 15. The
project involves cutting and shaping intricate trim pieces all along the roofline, as well as
replacing the slate shingles and underlying wood support system. Steve begins to get
frustrated on April 2 because the project is taking too long, so at about the halfway
point, he calls Damon and says he won't finish the project. Damon sues Steve in court
and asks specific performance. The court would NOT grant this remedy to Damon,
because specific performance is NOT appropriate.

One provision in a contract states "Ulysses vows he is a board certified physician"

and another states "Emma promises not to eat red meat for six months from the
date of this agreement." Which of the following best describes these contract terms?

→ Tất nhiên là ULYSSES: Ulysses has made a warranty and

representation; Emma
has made a covenant → chưa tìm ra covenant chỗ nào trong chap 9 :(((. Another
CASE: Slimline and Distributor signed a contract that provided that Distributor would
use reasonable efforts to promote and sell Slimline Diet Soda, which was already being
sold at Warehouse Club. After the contract was signed, Distributor stopped conducting
the in-store demos of Slimline it had previously been doing at Warehouse, and it did not
repackage the product as Slimline and Warehouse requested. Sales of Slimline
continued to increase during the term of the contract. Slimline sued Distributor, alleging
a violation of the agreement. Slimline is likely to win, because Distributer's conduct is a
material breach. Malay, the CEO of Santi, Inc., interviews four lawyers to help with a
potentially lucrative business deal. He provides each candidate the bare facts of the
deal so they can discuss it and present their approaches. In the advice of which of the
four should he fire, the (obvious) answer is Anthony, who tells Malay about the risks of
that sort of deal and ways to accomplish Santi’s goals safely and legally. Lucian has
every reason to believe the new pizza shop he is opening will be a success, but he
also has a lot riding on it (là reason dữ chưa?). He has borrowed a significant amount
and has refinanced his house to pay for the expenses of starting up. If the business
does not succeed, it will be a disaster for his family. Fortunately, the construction and
start up of the business will be pretty simple, and he is hiring his sister Allegra (an
experienced contractor) to do most of the work. Should Lucian and Allegra put their
contract in writing? (PHẢI) Yes, because it is essential to the success of Lucian’s
business that construction goes smoothly.

Fred slips on some ice on Opal's front steps and shatters both his kneecaps. Opal has a
comprehensive homeowner's policy with Riskocity Insurance, but Riskocity refuses to
pay for Fred's injuries as the policy does not cover accidents caused by Opal's
"dangerous conduct." The Community Rules of Opal's gated community require
residents to keep their front steps free of ice. Riskocity contends that because Opal
violated the Community Rules, she is liable for Fred's injury. Opal argues that the
insurance policy makes no mention of her Community Rules and because she could not
foresee Riskocity relying on the Rules, they should not prevent her from recovering. The
result is that the insurance contract was AMBIGUOUS (không rõ ràng thì làm sao đòi
được bảo vệ?), so the Community Rules will not prevent Opal from recovering. Louise
Latour, a successful interior designer, won a contract to design the interiors of
Greentree Broadcasting's corporate headquarters. A few weeks after signing the
agreement, Greentree receives a much cheaper bid from another designer and decides
to get out of the contract. A Greentree lawyer notices that the top of the contract
contains an embarrassing typographical error: It states that the agreement is between
"Louise Latour and Grantree Broadcasting." Will Greentree be able to use this mistake
to get out of the contract? → NO, There is clear and convincing evidence that the
mistake does not reflect the intent of the parties, and the court will reform the contract.

Stephan and his boss agree to extend his employment contract by an additional six
months. The employment contract states that all amendments must be in writing, so
Stephan and his boss cross out and change the provision in his contract that covers the
duration of his employment and rewrite it to include the additional six months. They
each initial and date the change, and they each keep a copy of the agreement. The
amendment is VALID. This valid way to execute a written amendment. Rosa and
Happy Movers sign a contract that states Rosa will pay Happy Movers $100 per hour to
move all of her furniture to her new house on September 1. The contract also states that
any modifications to the agreement must be "made in writing signed by the party to be
charged with the amendment." The day of the move, a Happy Movers representative
shows Rosa a flyer for a promotion offering to complete a move in under two hours for
an extra $300, and Rosa agrees orally to the deal. The Happy Movers representative
signs his name on the flyer, and staples the flyer to the contract. If Happy Movers
finishes moving Rosa's furniture in less than two hours, is Rosa contractually required to
pay the extra $300 → NO nha tr, because Rosa did ot sign the flyer (có sign đâu mà
bắt ngta trả tận 300 dô?)

Reciprocal promises (có qua có lại): Sam and Elias

agree in writing that Sam will give Elias needlepoint lessons once a week for five weeks
in exchange for $1,000 per lesson. The contract stipulates that if either party is going to
cancel a lesson, they must provide 48 hours' notice. On the morning of the second
lesson, Elias calls Sam and says he cannot make it because earthquake damage has
closed all roads leading out of his town. Will Elias owe Sam for the missed lesson? →
Elias will not be liable if the contract contains a clause discharging the obligation if
there is a force majeure provision. Fritz's Pet Shop has a contract with PlanetLazy Pet
Products that states: a) PlanetLazy will deliver to Fritz 25 pet beds on the second
Saturday of every month for one year; b) Fritz will pay PlanetLazy $2,500 on the first
day of each month for one year. If Fritz does not pay PlanetLazy on a given month, is
PlanetLazy still obligated to continue delivering pet beds? → The answer is YES, as the
terms are reciprocal promises → See Chapter 4 for more info. PillPharm is
negotiating a deal with Happy Valley Health (HVH) for the sale of PillPharm's latest
health supplement. PillPharm would like to package its supplements in bottles produced
by Frank, but Frank says he will not enter into a contract with PillPharm until the HVH
contract is finalized. HVH has sent PillPharm a letter of intent, but Frank thinks it is too
vague and refuses to enter into an agreement with PillPharm. In this CASE, PillPharm
should send HVH its own letter of intent stating that they do have a binding agreement.

Deborah, a lawyer for a minor league hockey team, is negotiating a contract between
the team and its new practice stadium. The contract, now in its fourth draft, addresses
all of Deborah's concerns and incorporates all ofthe changes she wanted. She is ready
to sign the agreement, but she wants to be sure that any future conversations she has
with the stadium lawyers are not considered additional provisions to the contract. What
should Deborah do is adding an integration clause to the contract. Another CASE:
Confluence Corporation, located in Champaign, Illinois, decided to begin buying rare
earth metal from the Canadian Rare Earth Company, with headquarters in Montreal,
Quebec Province. The following clause was included in a signed contract between the
companies to purchase quantities of the metal Lanthanum for Confluence's production
of rechargeable batteries: "During the Initial Term, Seller shall sell the Products to Buyer
at the purchase prices set forth on Exhibit A. All prices are in dollars with no cents. Any
adjustment to prices will require written modification signed by both parties within ten
(10) business days." A few weeks after signing, the Confluence Corporation attorney
calls the Canadian company with a concern about the clause. What do you believe this
concern may be? → IN DOLLARS nha

The Onyx Company negotiated intensely for months to hire Rober Conyers as its new
Chief Executive Officer (CEO). Attorneys for both the Company and Mr. Conyers were
now working on the final employment contract, and it was especially important to the
Onyx Company to keep their new CEO for at least 10 years. Because Mr. Conyers had
exceptional skills and considerable experience related directly to the company's
industry, it was important for the contract to include an atypical retention clause in the
event of a merger with another entity. If Onyx's attorney was concerned about
enforceability of the retention segment, what could they add to the contract to safeguard
the rest of the provisions? → SEVERABILITY PROVISION (kh biet bai nao luon…)
Lionel is the personal assistant to the head coach of a professional football team. At the
end of the football season, a football player's wife gives Lionel front row tickets to the
opera. What must Lionel do is tell his boss about the tickets. His boss may choose to
keep the tickets for himself. Beatrix is a diamond dealer who also works as a jewelry
designer at Bunny Mayhew Designs (BMD). Beatrix arranges to have one of her own
company's salesmen meet with a BMD representative to try to sell some of Beatrix's
available stock. Beatrix SHOULD do this (YES), but she must tell BMD that the salmon
works for her. Zephyr agrees to mow his brother Zeke's lawn for free while Zeke
recovers from a broken leg. Zeke tells Zephyr not to use the mower if its warning light
turns on, but Zephyr ignores the warning. The engine overheats, ruining the lawnmower.
Is Zephyr liable for the damage? → Yes, because Zephyr's conduct was grossly
negligent. Malik asks Petra, an expert in sports collectibles, to help him find a buyer for
his collection of autographed baseballs. Petra finds a buyer who is willing to pay
$5,000 for the collection, but Malik scoffs at the offer and insists it is worth at least
double that amount. He says he would not even consider selling for less than $7,500.
The next week, someone offers to pay $1,000 for the collection. Must Petra tell Malik
about the offer? → NO, if Petra has no reason to believe that Malik would be interested,
she does not have to pass the offer on to him.

Heather and her employee Emilio believe they see Ethel, a customer of Heather's
clothing boutique, shoplift some mittens. Heather tells Emilio, "Lock her in the back
room, and don't let her out until you figure out what's going on. I have a flight to
catch." Heather leaves for the airport. Emilio questions Ethel in a back office for three
hours, but is unable to determine what happened with the mittens. When Ethel is finally
released, she sues for the tort of false imprisonment. Assuming that Emilio's acts
constitute false imprisonment, is Heather liable for the indemnification of Emilio? →
Heather is liable for the indemnification of Emilio if Emilio did not realize he was
committing a TORT. Liam tells Emily that he wants to buy her friend Tamara's car, but
does not think Tamara will sell it to him for personal reasons. Emily tells Tamara that she
knows someone who would like to buy her car, and the two draw up a contract stating
that Tamara will sell the car to "an undisclosed buyer" for $10,000. After Tamara has
signed the contract and given Emily the keys, Emily has Liam sign the contract,
agreeing to pay the $10,000 purchase price. Liam takes the car but disappears without
paying. What, if anything, will Tamara be able to recover from Emily? → The contract
price of the car because Liam is an unidentified principal. (khong hieu lam). Alissa
accepts a six-month unpaid internship at Jonah's dental practice. After one month,
Alissa wants to quit but knows that if she does it will cost Jonah a lot of time and money
to find and train someone new. Can she quit before the end of the six months? → YES,
because she is a gratuitous agent.

LAW OF AGENCY
The German-American Vocational League was formed in New York during World War II
to serve as a propaganda agency for Nazi Germany. Under U.S. law, all foreign agents
were required to register, but neither the VocationalLeague nor its officers did so. When
they were charged with violating U.S. law, they argued that they were not agents of the
German government because they had no formal agency agreement. Is this a strong
argument? → NO. A formal contract is not necessary to establish an agency
relationship. An elementary school custodian struck a teenager who wrote graffiti on
the school's wall. Is the school district liable for this employee's intentional tort? YES,
the school district is liable if the custodian intended to serve some purpose of the school
when he struck the student. The Fellowship is a not-for-profit corporation whose primary
purpose is promoting goodwill among churches and synagogues. Its annual meeting
featured various vendors with display booths. Keener, a church representative,
approached the booth of Chris's Cars and Trucks (CCT) about buying a bus for his
church. While Keener was test-driving one of CCT's buses, the brakes malfunctioned,
and Keener was killed in the resulting crash. If CCT is liable for the accident, could The
Fellowship also be liable as CCT's principal: YES, because the stop was a mini detour
from his work.

Barbara had a dream of opening her own bakery she planned to name "Sinful Sweets."
While she saved money to start her business, she worked for a big commercial baker
known as "The Bread Factory." The Bread Factory made many different types of bread,
but none of the sweet baked items Barbara hoped to offer in her own shop. So, while
Barbara made French baguettes and sourdough loafs, she thought about cupcake icing
and baking the perfect chocolate chip cookie. Soon, the daydreaming led to snips of
time searching the internet on her mobile phone for recipes; then she progressed to
starting a file on her supervisor's computer desktop filled with ideas and saved
searches. Barbara started testing her recipes using the bakery's materials, and she
found that all her efforts were making her a better and more efficient baker. Once she
had tested all her recipes at the bakery, Barbara's next step was to take two
accumulated sick days to search for a storefront for Sinful Sweets. She found the
perfect spot and provided two weeks' notice to The Bread Factory, including one week
of vacation she had saved. Has Barbara through her actions breached a duty of loyalty
to her soon-to-be former employer? YES, because she used The Bread Factory's
resources and time to prepare for her own business. George and Susan open a dry
cleaning business together, but do not execute any documents or perform any
formalities other than obtaining a "d/b/a" certificate for their business name: "G & S
Clean." One day, when George is out for lunch, Susan burns a large hole in a
customer's fur coat while cleaning it. Who is liable for the cost of the coat? → G & S
Clean is liable, and both Susan and George are personally liable.

LAW OF PARTNERSHIP
Wanda, Derek, and Mitchell formed B. Flowers, LLP three years ago. A year ago, Derek
and Mitchell decided that the company was ready to open a new location and had B.
Flowers take out a loan from a bank for the extra capital needed to expand. The new
location has not performed well, and B. Flowers is unable to pay the remaining $50,000
owed to the bank. Is Wanda liable to the bank for the debt? → NO, unless the partners
have not complied with the LLP statutory filing requirements. Mack is the local owner
of a restaurant franchise. Though the national chain is known for its hotdogs, Mack
wants to sell vegetarian burritos. Must Mack get permission from the franchisor? →
YES, if the franchise agreement demands it. Alan and Ivan opened a kosher
delicatessen, Main Court, which failed after barely a year in business. One supplier
sued for overdue bills. Alan and Ivan will be liable to the supplier if Main Court was
which of the following types of organizations? It is GENERAL PARTNERSHIP. In order
to obtain limited liability, Tom and Doris properly formed a limited liability company
(LLC) to operate their catering business. They sometimes deposited the proceeds from
catering jobs into their personal checking accounts, and if they needed to pay personal
bills and were short of funds, they used the business account. If creditors of the
business cannot get payment for their invoices, will a court order Tom and Doris to pay
the creditors using their personal assets? YES, the court can pierce the veil of an Llc
because Tom and Doris commingled assets. Russell and Rachel have designed
a new type of cell phone that they believe will revolutionize the market. They would
like to start a company to produce, market, and sell the phone, and they know that they
will need a considerable amount of up-front capital investment to develop a prototype
and later to create inventory to sell. The best form of business for Russell and Rachel is
CORPORATION.
Wilma is one of five equal members of Polar, LLC. This year, Polar generates $5 million
in profits. The company reinvests $4 million into the company, leaving $1 million to be
divided equally among the members. How are federal income taxes paid on Polar's
profits? Wilma (and each of the members) pays taxes on their $1 million share ($5
million divided by 5) of profits. Fitness World is a corporation with 75 shareholders that
are individuals who all hold common stock. At an annual meeting, the shareholders
unanimously voted that Fitness World should register as an S corporation with the
IRS so that the shareholders may enjoy the flow through tax benefits. Is Fitness World
eligible to register as an S corp? The answer is YES, if all of the shareholders are
U.S. citizens or residents. Clean Earth, Inc. is a Delaware benefit corporation that
produces cleaning products using 100 percent recycled, organic, and sustainably
produced materials. Several years ago, it became a socially conscious organization and
has fulfilled all of the reporting requirements since then. Clean Earth executives have
decided to purchase its paper product supplies (such as napkins and toilet paper) from
a new supplier, who plants two trees for every tree ituses. Since this supplier charges
five times more than Clean Earth's previous supplier, profits from Clean Earth's paper
products are expected to be cut in half. If a Clean Earth shareholder challenges the
decision as being unfair to shareholders, how will a court likely rule? → This would
against the shareholders, if it finds that Clean Earth has acted in a "responsible and
sustainable manner.

Two general contractor firms, Atlantic Builders and North West Mechanical, form a joint
venture for the purposes of completing a large construction job. They are collaborating
on all phases of the project. An Atlantic Builders' employee operating a crane
accidentally drops a steal beam onto a car parked near the construction site. Who is
liable for the damage to the car? Atlantic Builders and North West Mechanical are both
liable. Zack, Gavin and Breana were college friends who decided to go into business
together as a party equipment rental service. The three budding entrepreneurs formed
as equal owners a Limited Liability Company (LLC) named "Parties R Us." The
written operating agreement gave only Zack the authority to manage the business, hire
and fire employees, and purchase equipment. Zach contributed to the LLC his
knowledge in the party business (his family had owned a similar company), and Gavin
and Breana each contributed $100,000 capital. Over the next year, Zack ran the
business, but he did not consult with Gavin and Breana, and no meetings were held.
When Gavin and Breana asked what was going on with the company, Zach said he was
too busy to talk about it. At the end of the first year, despite Zach's best efforts, the
LLC's cash was depleted and its liabilities significantly exceeded its assets. To make
matters worse, a defective Parties R Us tent had collapsed onto a wedding group,
causing serious injuries. One of the wedding guests, Margaret, sued the LLC and
received a $500,000 judgement against them. Because the LLC cannot pay Margaret, is
it likely that Zack, Gavin, and Breana will be held personally liable for the judgment?
NO, (because the LLC was an entity independent from its owners)

Surgeons Dr. Martin and Dr. Kellogg are partners who decided to form a professional
corporation together. After the business was established, the doctors went out to
celebrate the new enterprise with some colleagues. Unbeknownst to Dr. Martin, Dr.
Kellogg, who was on call that day, had to leave the party to perform emergency surgery
on an accident victim. Unfortunately, Dr. Kellogg had too much alcohol at the dinner and
was drunk during the procedure. As a result of his intoxication, Dr. Kellogg accidently
cut a major artery in the patient's abdomen, and the individual bled to death on the
operating table. A jury in the malpractice suit that followed awarded a $5 million
judgment against Dr. Kellogg and the corporation. Insurance covered $1 million of the
damages. Who would be responsible for the remaining $4 million? Only Dr. Kellogg
would be liable for the $4 million. Xavier and William are both architects. They have
formed a partnership, but have not signed a partnership agreement. Xavier landed a big
contract with a major real estate developer and did all the work for the project, which
generated $50,000 in profits. Under the Uniform Partnership Act (UPA), how will the
profits from this project be divided: William and Xavier will each receive $25,000.
Percy and Yolanda are partners in a business that provides financial advisory services.
Percy steals $50,000 from a client's account and immediately disappears with the
money. Is Yolanda liable to the client for the $50,000? → YES, if the theft occurred
through the ordinary course of business.

3 partners của 1 corporation: Andrew, Betty, and Charles form a

partnership to produce five independent films. After they complete their third film,
Charles decides that he would like to go back to school full-time, and tells Andrew and
Betty that he will not produce the remaining two films with them. What will happen to the
partnership. Charles will be wrongfully dissociated, and Andrew and Betty must
decide whether or not to continue the partnership without Charles.FAB has three
partners, Ramon, Janna, and Jackie, and $20,000 in assets when it begins its winding
up process. FAB owes $20,000 to a supplier, $25,000 on a bank note, and $5,000 to
Jackie for a loan she gave to the partnership. FAB does not have a partnership
agreement. What financial rights and obligations does Jackie have is Jackie must pay a
net amount of $5,000. Joel owns a construction business. Joel's brother-in-law, Barry,
works for him on several of his large projects. At the grand opening of one of Joel's
buildings, a client introduces Joel and Barry to Marie, referring to the pair as partners.
Neither Joel nor Barry corrects the client. Impressed with the building, Marie asks Joel
and Barry to manage her real estate development firm's next project. Joel does not want
to take the job, but Barry wants to try to run his own project, so he accepts. The project
is a disaster, and Marie loses $2 million due to Barry's mismanagement. May Marie hold
Joel liable? → YES, but under a theory of partnership by estoppel. Sarah and Mark
formed MCS as partners years ago, which they have now dissolved and are in the
process of winding up. Without Mark's knowledge, Sarah cancels MCS's insurance
policy covering the MCS van. Two months later, while making a delivery for MCS, Mark
runs a stop light and hits a pedestrian. Who will be liable for the damages caused by the

accident? → dễ, mở chap 16 (partnership) Mark, Sarah, and

MCS.

Herman rightfully dissociated from Oak Tavern, a partnership, 18 months ago. Neither
Herman nor the remaining Oak Tavern partners notified anyone with whom Oak Tavern
does business that Herman had left the partnership. Oak Tavern has not paid one of its
suppliers, Great Grains, for its purchases over the past 10 months. Can Great Grains
recover the money it is owed by Oak Tavern from Herman: YES, but Herman can
recover whatever he pays to Great Grains from Oak Tavern. Jasmine and Joanna run a
bakery as partners. Joanna's sister asks her to provide all of the desserts for her
company's annual New Year's party, and Joanna agrees. Joanna's desserts are such a
hit with the partygoers that the company sends Joanna a check for $500. Joanna would
have provided the food for free, but happily accepts the check. When Joanna tells
Jasmine about the party and the check, Jasmine insists that Joanna must give her half
of the money. Is Jasmine correct? → NO, but Joanna must turn the earnings over to the
bakery.

Sports Destination is a sporting goods store owned by four partners: Jerry, Kevin, Lisa,
and Marcy. They have a partnership agreement, but it does not state anything about
voting rights. Gear Head, a competing sporting goods store, has made an offer to
merge with Sports Destination. Jerry, Lisa, and Marcy vote in favor of accepting Gear
Head's offer, but Kevin does not. Has the merger been approved by Sports Destination:
NO, because a merger requires unanimous approval from the partners. Ramon and
Martin sign a written agreement stating that they will co manage a hardware store
together. Martin agrees to provide 75 percent of the start-up capital for the store and
cover 75 percent of any losses suffered during the first year. Ramon is entitled to all of
the profits. Ramon manages and operates the store while Martin handles the
book-keeping and other administrative functions. Will a court find that Ramon and
Martin formed a partnership: NO, because they do not share profits. Molly and Corbin
met while both studying horticulture in college, then after graduating decided to start a
landscaping business together. Their partnership—"Green Fields"—started operating
and hired a landscape architect and an employee to provide labor for projects.
Everything went well for about four months, until the employee negligently failed to
mark a deep hole in a client's yard. The client's 4-year-old daughter fell into the
opening and was severely injured. The client sued Green Fields and was granted a
judgment of $250,000, which has not been paid. After the judgment was entered, Molly
and Corbin transitioned the partnership into a Limited Liability Partnership (LLP). They
are operating the business now as Green Fields LLP. To help with continuing costs,
Molly and Corbin take on an investor-Partner, who contributes $50,000 to Green Fields
LLP. Are Green Fields LLP and the new partner liable for the judgment against the
original Green Fields Partnership: however, only Green Fields LLP is liable.

The Ford Motor Corporation and Toyota Motor Corporation planned to join forces in
2011 to produce a hybrid truck that would meet fleet emission standards. Toyota had
considerable experience at that point with hybrid vehicles, and coupled with Ford's long
history of truck manufacturing, it would be a potentially productive partnership. What
would be the best structure for the collaboration between these two automotive giants is
Joint Venture (PARTNERSHIP). Wayne borrows money from Phyllis, who in good faith
represents herself as an agent for Retail Lender, Inc. Wayne learns that Retail was
never incorporated due to a significant error in Phyllis' incorporation paperwork. If
Phyllis sues to recover the loan amount, can Wayne avoid liability based on the fact that
Retail does not exist? → NO, because Retail is a corporation by estoppel. Marcus
owns common stock in XO, an oil and energy company that is about to be liquidated. Is
Marcus guaranteed to be paid in the process of dissolution? → NO, unless there are
assets remaining after all creditors and preferred stockholders are paid. Hannah owns
non-voting stock shares in Asset Management, Inc., but would like to vote at the next
shareholders meeting. What tool could help Hannah gain the authority to vote in
shareholder meetings is Conversion Rights.

George is president of Plumbers, Inc. He signs a contract with Susan, which calls for
Susan to perform some services and receive $10,000. Susan performs, but Plumbers
does not pay. Which of the following, if true, will grant Susan the right to recover from
George personally. George commingled personal assets with corporate assets. Michi
Corp.'s board of directors has determined that the insolvent company will not be able
recover financially and it is best to terminate the corporation. The board unanimously
votes to dissolve and makes a recommendation to dissolve to the shareholders, but
only 40 percent of the shareholders vote to approve dissolution. The shareholders insist
that Michi is simply mismanaged and can be saved if the board appoints a new CEO.
May the Michi board request a court to order dissolution of the company: YESS,
because a court may dissolve a corporation if it is insolvent or if its directors and
shareholders cannot resolve a conflict over corporate management. The Resolution
Trust Corp. (RTC)
sued the directors of the Commonwealth Savings Corp. (CSC) seeking to recover from
them personally $200 million that the bank lost in bad real estate loans. The directors
approved the loans after state and federal regulatory agencies had issued reports
criticizing the bank's loan practices, but the loans did not violate any laws. CSC's
charter stated that the purpose of the corporation "is to engage in any lawful activity for
which corporations may be organized." Under Texas law, RTC could recover for CSC
directors' negligence only if their acts were ultra vires. Will RTC be able to recover from
the directors: NO WAY, because there is no indication that the board acted without
authority or illegally.

MegaCorp has five directors and 1,050 shares of voting stock. Jessica would like to
purchase enough stock to elect herself to the board of directors. How many shares of
MegaCorp stock will Jessica need to own to secure a place on the board of directors?:
176 shares if MegaCorp uses cumulative voting and 526 shares if MegaCorp uses
regular voting. Denise was a promoter for a proposed corporation, EVR-Young Corp. As
promoter, she signed a three-year lease to rent office space from Landlord. She signed
her name and indicated below her signature she is signing as "promoter for EVR-Young
Corp., a company yet to be incorporated." EVR-Young never files incorporation
documents with the state. Is Denise personally liable for the lease: YESS, she remains
liable as the promoter on a contract for which there has been no novation. Isabel,
Wesley, Gina, and Lucas worked together intensively to form an environmentally
conscious corporation named Icon Corp. They are the only shareholders. Is there
anything the group can do to avoid having Icon shares sold to someone who does not
share their vision for the environment? → YES, they can sign a shareholder agreement.

Zoom-Bot has common stock and cumulative preferred stock shareholders. The
company is issuing dividends for the first time in three years. How will the dividend
funds be divided by the shareholders: All cumulative preferred shareholders will be paid
for all previously unpaid dividends along with this year's and any remaining funds will
go towards the payment of this year's dividend to common shareholders. Kramer hired
an attorney on March 1 to incorporate his start-up website development company. He
began operating as president the corporation "WebVisions", and strictly adhered to all
formalities associated with the corporate form. One of the actions Kramer took was to
sign a contract with IBM for the purchase of a dozen computers for his programmers to
use. For six months, WebVisions carried on business of the corporation as usual, and
made monthly payments to IBM on the computer systems. Kramer then discovered that
the attorney he hired had only just filed the incorporation document on September 15.
When IBM discovered the oversight, they filed a claim against Kramer for the $28,678
remaining on the computer purchase contract. Is Kramer personally liable for the
balance? In this case, the answer is NO, because Kramer and IBM treated WebVisions
like a legitimate corporation.
An appraiser valued a subsidiary of Signal Co. at between $230 million and $260
million. One month later, Burmah Oil offered to buy the subsidiary at $480 million, giving
Signal only three days to respond. The board of directors accepted the offer without
obtaining an updated valuation of the subsidiary or determining if other companies
would offer a higher price. Members of the board were sophisticated, with a great deal
ofexperience in the oil industry. A Signal Co. shareholder sued to prevent the sale. Is
the Signal board protected by the business judgment rule: YES, because they acted in
good faith. The board of directors of Athletic Stride, a successful sneaker company,
votes to have the company purchase a professional basketball team for $500 million
dollars. The directors are all knowledgeable about the professional sports industry, and
none of them have a conflict of interest in the deal. When the shareholders oppose the
purchase as being unrelated to the company's business, the board argues that, as the
team's owner, Athletic Stride will have invaluable marketing and sponsorship
opportunities. Would a court likely uphold the board's decision to purchase the
basketball team. Probably YES, because courts generally will support a board decision
if there is even a remotely rational business purpose and no other breaches of the
managerial fiduciary duties.

Frank, the CFO of Springer, Inc., concealed temporary financial losses the company
suffered early in the fiscal year in Springer'sannual report submitted to the Securities
and Exchange Commission (SEC). It is illegal to submit fraudulent SEC filings, but
Springer's financial situation had already improved greatly by the time the annual report
was filedand Frank did not want to unnecessarily alarm shareholders. When news that
Springer submitted fraudulent financials to the SEC broke, the company'sstock price
dropped by 15 percent and shareholders sued Frank under applicable securities laws.
Frank defended on the basis that his actions were protected by the business judgment
rule because he was acting in the company's best interests. Frank was INCORRECT in
this case, because the business judgement rule does not protect illegal activities.
Sammy's, Inc. is a publicly traded
company. Sammy's board of directors appointed Jeb as CEO. Jeb has made a number
of blunders, which drove Sammy's deeply into debt. In its first meeting in six years, the
board of directors votes for Sammy's to file for bankruptcy. Has the board committed
any violations → YES, the board has breached its duty of care. Data Management, Inc.
is interested in acquiring DocuWorld Corp., but the DocuWorld board is not interested in
selling or merging. DocuWorld's shareholders authorized blank check preferred stock
in the corporate charter. Will Data Management be able to bypass the resistance of the
DocuWorld board by making a tender offer to DocuWorld shareholders? The answer is
NO, because the DocuWorld directors can issue the preferred stock as a poison pill.

Ví dụ: Ocean View Inns recently purchased 5 percent of Seaside Resorts'

stock. Seaside Resorts' board of directors fears that Ocean View Inn is going to attempt
to take control of the company in order to acquire Seaside Resorts' hotel in California; it
is the only Seaside Resorts location that directly competes with Ocean View Inns.
Although it takes a considerable amount of business away from Ocean View Inns, it
accounts for only five percent of Seaside Resorts' earnings. The Seaside Resorts' board
suspects that Ocean View Inns would retain the California location and sell off the rest
of the Seaside Resort assets in pieces. Although the Seaside Resorts' board has a
good faith belief that a takeover by Ocean View Inns is not in the shareholders' best
interests, it does not believe that a majority of the shareholders will work with them to
resist a takeover. What antitakeover device is the board's best option is asset lockup.
Power Wind is a corporation that specializes in designing and manufacturing windmills.
Power Wind has a manufacturing plant in Colorado and offices throughout the
southwestern United States. NRGreen, a provider of a variety of renewable energy
design and installation services, has offered to buy Power Wind at a favorable price.
However, because NRGreen's business model does not involve any manufacturing, it
will close the Colorado plant immediately after acquiring Power Wind. May Power
Wind's directors decline NRGreen's offer in order to keep the plant open → YES, if they
are in a state that has codified Unocal. Dominique is the CEO of a pharmaceutical
company and must decide whether to continue the company's research into a new skin
treatment. Originally, the company had hoped the treatment would help burn
victims recover quickly, but two years and $5 million in testing has revealed that it is
only useful in relieving very dry skin if applied hourly. In addition, projections show that it
will be so expensive to produce the treatment that the company will have to charge
$100 a day for it in order to make a profit. However, the researcher in charge of the
project is Dominique's best friend, so Dominique approves another $5 million to be
spent on continued research of the treatment. If the company's shareholders challenge
Dominique's decision, how will a court rule. The court will rescind Dominque's decision
and hold her liable for any losses suffered by the company as a result of the decision,
unless Dominique can show the transaction was entirely fair to the shareholders.
(REVIEW THIS!!!)

Ví dụ case study 25: Kurt owns 55 percent of the New England Lumber
Company (NELC) stock and is also the CEO. Kurt also owns two percent of the
Boston Homes stock. Boston Homes is a construction company that builds houses
throughout New England.Kurt wants NELC to provide Boston Homes with all of the
lumber Boston Homes needs and to give Boston Homes a ten percent discount on all
of its large orders. Four NELC board members who have no interest in Boston Homes
form a special committee and approve the deal. If a NELC shareholder challenges the
deal between NELC and Boston Homes in court, how should the court rule: Strike down
the deal unless it is entirely fair to NELC.
Ví dụ case study 26: Carly is a director at Dazzle, a corporation that
operates a chain of stores that sell fancy shoes and handbags. Zeb approaches Carly
about partnering with him in his new business selling leather handbags with large
buckles and other metal accents. Carly bringsZeb's offer to the Dazzle board of
directors and shareholders, but they turn it down because Zeb's bags are too casual
and do not fit in with the rest of their stores' merchandise. Carly loves Zeb's bags,
though, so she decides to personally invest with him. Has Carly violated her fiduciary
duty to Dazzle → NO (of course), because Dazzle turned down the opportunity to work
with Zeb. Mona was working as a medical biller-coder supervisor for a medical
physician group in primary care called The Olaf Group, and she was also a
shareholder and director in the overall medical company. After about two years of
supervising the Olaf Group, Mona heard about an opportunity to do billing for a
dermatology practice in town. Although she knew the Olaf Group could do the work,
Mona thought that it would be more effective for the dermatologist if she did the
work independently (how come?). So, instead of bringing the opportunity to the Olaf
Group, Mona decided to just take on the dermatology work on her own. Has Mona
breached any fiduciary duties to her group? But, YES, because she has a responsibility
to bring the opportunity to the Olaf Group first.

Unhappy with the management of Jackpot Enterprises, Inc., a shareholder asked the
company to include a proposal in the proxy statement that would
require the board of directors to sell or merge the company. Must Jackpot include this
proposal in its proxy statement: YES, if the shareholder has owned at least one percent
or $2,000 of Jackpot's stock continuously for a year. Pro Threads, Inc., an
international designer clothing manufacturer, is acquiring by merger D-Satisfaction, a
small manufacturer that specializes in fitted dresses. Dresses of this type account for
one half of one percent of Pro Threads' sales. Do Pro Threads and D-Satisfaction
shareholders needto approve the merger: ONLY D-Satisfaction shareholders need to
approve the merger. Drug Co. paid $3 billion to settle a
lawsuit and pay a criminal fine after it illegally marketed 13 of its most important drugs.
Shareholders filed a derivative suit against the Drug Co. board and top executives.
Defendants responded with a motion to dismiss on the grounds that shareholders had
not made demand on the board. Should the court grant the motion to dismiss: NO → if
the shareholders can show that demand was futile.

After Classic Corp. went public at $12 a share, it began suffering many years of losses.
Isaac Fogel, who owned 64 percent of the stock, decided to take the company
private again by buying shareholders' stock at a price of 20 cents a share. Classic
hired two financial advisers who opined that the buyout price was fair. The board of
directors voted in favor of the sale and then scheduled a special shareholder meeting
tovote on the buyout. Do the minority shareholders have any rights → YEAS, they have
legal protection and are owed a fiduciary duty from the majority
shareholders. George is a majority shareholder in Soda Pop, Inc., a large soft drink
maker. Citizens in India are threatening to sue Soda Pop for stealing water in rural
villages, ruining crops, and depriving livestock of water. If they are successful in their
suit, will George be liable to the Indian plaintiffs: No, because George has no right to
control Soda Pop operations. Wanda, a realtor, owns stock in Mackey Land, a publicly
traded real estate development company. To market her own realty business, Wanda
demands that Mackey Land provide her the list of Mackey Land shareholders. Is Wanda
entitled tothis information: NO, this is not a proper purpose to access company
information. Gerald is the sole nominee to fill the open position on ABC Corp.'s board
of directors. Gerald has been on the board for the past ten years and his management
style is extremely unpopular. At the annual meeting, Gerald receives two of the 1,000
shareholder votes. May Gerald remain on the ABC board: Yes. Gerald has received
the necessary number of votes.

Connor owns ten percent of the stock issued by Outdoorsmen, Inc., an outdoor sporting
supply company. The nominating committee has nominated an executive from a
private equity firm for the open seat on the Outdoorsmen board. Connorbelieves the
nominee does not have the industry knowledge toproperly manage Outdoorsmen and
that his good friend, Michael, who has produced popular nature documentaries and has
a CPA, will be much more effective. Connor demands that Michael be included in the
proxy materials sent to shareholders. Must the Outdoorsmen board comply with
Michael's request: YEAS, if the company has proxy access bylaws.

The SEC discovered that Alliant's annual report contained misleading financial
statements, which concealed the fact that Alliant would not be able to collect $2 million
worth of debt. When theSEC releases a statement concerning Alliant's fraudulent filings,
the company's stock drops from $38 to $15 per share. Six months prior to the SEC's
announcement, Alliant's CFO sold half of his shares at the company's all-time high
stock price of $43. May Alliant recover any money from the CFO that he earned from his
sale of stock? → YES, Allianz may claw back all of the profits the CFO received from
the sale of the stock six months ago. DCAM Corp. stock is held by Rita (5 percent),
Jack (50 percent), and Taran (45 percent). DCAM's board of directors has negotiated
a merger with EAE, Inc. Jack and Taran support the deal, but Rita thinks it will be
disastrous for the company. If DCAM is a privately held corporation, Rita may object to
the merger and require DCAM to buy
back her stock at fair market value. Marley owns 10% of the common stock in
Hometown Industries, Inc., and Cecil and Jonathan each own 45%. Both Cecil and
Jonathan sit onHometown's Board of Directors (BOD) and are paid officers, while
Marley is only a shareholder with no other role in the company. Hometown has not paid
dividendsto shareholders in a number of years, despite the company's financial
success. When Marley questions the lack of distributions, Cecil points out that any
profits have been reinvested in the company. Jonathan shows Marley how the use of
company profits has improved and strengthened the business, resulting in its current
success. Knowing Marley is unhappy, Cecil and Jonathan offer to purchase all of
Marley's shares in the company for $25 per share. Marley believes his stock is worth
much more, and asks to inspect Hometown's corporate books, but Cecil and Jonathan
refuse. Does Marley have a right to inspect Hometown's corporate books: YES,
because Marley's request is related to his interest as a shareholder.

Marley owns 10% of the common stock in Hometown Industries, Inc., and Cecil and
Jonathan each own 45%. Both Cecil and Jonathan sit on Hometown's Board of
Directors (BOD) and are paid officers, while Marley is only a shareholder with no other
role in the company. Both Cecil and Jonathan receive salaries that are on par with the
industry.Hometown has not paid dividends to shareholders in a number of years,
despite the company's financial success. When Marley questions the lack of
distributions, Cecil points out that any profits have been reinvested in the
company. Jonathan shows Marley how the use of company profits has improved
and strengthenedthe business, resulting in its current success. Both directors tell
Marley that if this trend continues, the company should begin paying dividends after a
few additional quarters. Marley is not satisfied with Cecil's and Jonathan's responses,
and seeks to bring a suit to force the payment of a dividend. Is it likely that Marley will
be successful in his claim: NO, because the directors are operating in good faith.
BUSINESS LAW – BUS301

REVIEW

I. INTRODUCTION TO LAW, THE AUSTRALIAN LEGAL SYSTEM AND VIETNAMESE LEGAL SYSTEM

CIVIL LAW LEGAL SYSTEM COMMON LAW LEGAL SYSTEM

ORIGIN FRANCE ENGLAND
SOURCES OF LAW 1. WRITTEN LAW = LEGISLATION = STATUTE = 1. COMMON LAW = JUDGE-MADE
STATUTORY LAW = ACTS OF PARLIAMENT LAW = CASE LAW
2. CASE LAW 2. WRITTEN LAW = LEGISLATION =
STATUTE = STATUTORY LAW =
ACTS OF PARLIAMENT

APPLICATION OF LAW INQUISITORIAL SYSTEM OF TRIAL ADVERSARY SYSTEM OF TRIAL

Legislation (made by parliarment) ¹ Regulations (made by lower government bodies)

AUSTRALIA LAW

1. Sources of law:
- Case law = common law = judge-made law
- Statute = written law = legislation = Act of Parliament = statutory law (made by Parliament )
- Regulations

2. Doctrine of separation of powers

+ Separate three branches of the government with different functions
Legislative branch (Senate + House of representatives): to legislate (to make law)
Executive branch: to administrate the law and carry out State’s affairs
Judiciary branch: to inteprete the law and to enforce the law (court system)

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 + Separate personel

Doctrine of separation of Power ¹ Doctrine of parliamentary supremacy?

3. Organizational structure of the government: Federation

There are two levels of government: Federal government and the State governments

Exclusive powers ¹ Residual powers ¹ Concurrent power??

4. Jurisdiction

Competent court

Doctrine of precedent??

AUSTRALIA:
Doctrine of precedent: lower court must follow decisions of the higher court in the same hierachy if the facts are similar or
identical

VIETNAM: a decision of a court will become a precedent (binding on any other courts) if it is declared by the Supreme Court’s
Justice Panel to be a precedent.

Exercise:

1. Must a district court in NSW follow previous decision made by the Supreme court of Victoria if the facts are similar or
identical? NO

2. Must a district court in NSW follow its own previous decision if the facts are similar or identical? => NO

3. Must a district court in NSW follow previous decision made by the fedeal court if the facts are similar or identical? => NO

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4. Must the NSW Supreme court follow previous decision made by the High court if the facts are similar or identical? => YES

II. CONTRACT

1. AUSTRALIAN LAW

Contract ¹ Agreement?

VALID CONTRACT:
+ Agreement
+ Consideration: Past consideration, Pre-existing duty, Illusory promise, Promissory estoppel
+ Contractual capacity
+ Legality
VOID/INVALID CONTRACT
VOIDABLE CONTRACT: it is a valid contract unless the eligible party choose to avoid it
UNENFORCEABLE CONTRACT

Contract entered into by a minor: (i) valid contract; (ii) void contract; (iii) voidable contract.

Voidable contract is a valid contract unless the eligible party chooses to avoid it.

“All valid contracts are enforceable”??

“Enforceable contracts are valid contracts”??

⇨ A valid contract may not be enforceable because of a legal defence

Legal defences include:
(i) lack of genuine consent/true consent: mistake, misrepresentation, undue influence, duress, unconscionability;
(ii) statutes of fraud (i.e. does not follow the form as the law requires)

VIETNAMESE LAW

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 VALID CONTRACT:
+ Agreement: Acceptance is valid at the time it is received
+ Contractual capacity
Contract entered into by a minor: (i) valid contract; (ii) void contract.
+ Legality
INVALID:
1. Lack of one of the above elements for a valid contract
2. Lack of genuine consent/true consent: mistake, misrepresentation, undue influence, duress
3. Unconformity as to form: if the law requires a contract to be in a specific form (e.g. written form or registration or witness),
and the parties do not follow, such contract will be invalid unless either party already performs 2/3 of its obligation (2/3
rule).

CISG (Convention on International Sale of Goods)

A comes from country X which is the party to CISG

B comes from country Y which is not the party to CISG

Whether CISG will automatically apply to a sale contract between A and B?

In what circumstances, CISG can apply?

Applicable law is the law of Country X

III. CONSUMER PROTECTION

Overview of ALC
Roles of ACCC
Definition of consumers
Prohibited conducts

IV. BUSINESS RELATIONSHIPS

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Criteria Sole Partnership Corporation
proprietorship/sole
trader
Owner An individual Two or more Shareholders include
individuals/legal entity individuals and legal
(ies)/organizations entity (ies)/organizations
Liability Owner has unlimited Depends on the type of Shareholders/members
liability partnerships have limited liability
Profit All profits belong to Based on capital Based on shareholding
distribution the owner contribution/professional rate
contribution
Tax The ower pays Partners being individuals Corporation pays
personal income tax pay personal income tax corporate income tax,
with some exceptions
Management of Decided by the Based on types of - Based on the
the business owner at his/her own partnership doctrine/principle
discretion Generally, general of separation
partners will manage the between
business (one partner has ownership and
one vote). control
- Duties and
liabilities of
directors and
other officers

Types - Traditional/General Depended on

partnership classification criteria
- Limited
partnership

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PERSONAL INCOME TAX: PROGRESSIVE RATES
IN VIETNAM: Corporate income tax: fixed tax rate (20%) except for incentive tax rates (10%-15%) or special corporate income tax
rates (upto 50%)

Unincorporated body ¹ incorporated body???

V. AGENCY LAW

- Types of authorization;
- Rights and Obligations;
- Termination of the relationship

VI. TORT - NEGLIGENCE:

- The D owes the P a duty of care

- The D breached his/her duty of care
- The D’s breach results in loss/damage/injury that the P has to suffer

1. DOES THE D OWE THE P A DUTY OF CARE?

A) IS IT REASONABLY FORESEEABLE THAT THE D’S ACT OR OMISSION TO ACT COULD CAUSE HARM TO THE P? -> NO-> D IS NOT
NEGLIGENT
è YES

B) IS THERE ANY PROXIMITY?: PHYSICAL, CIRCUMSTANTIAL, CAUSAL -> NO -> D IS NOT NEGLIGENT
è YES
2. DID THE D BREACH HIS DUTY OF CARE?-> NO-> D IS NOT NEGLIGENT
è YES
3. DID THE BREACH RESULT IN INJURY, LOSS, DAMAGE THAT THE P SUFFERED? (CAUSAL LINK)
(“BUT FOR” TEST): BUT FOR THE D’S ACT OR OMISSION TO ACT, DOES INJURY, LOSS OR DAMAGE STILL OCCUR? -> YES

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 IS THERE ANY CAUSAL LINK? -> NO-> D IS NOT NEGLIGENT

è YES => D has been negligent

4. IS THERE ANY DEFENCE?

(CONTRIBUTORY NEGLIGENCE (partial defence – damages will be shared between the D and the P proportionally),
VOLUNTARY ASSUMPTION OF RISK (absolute defence – D will be released from liability), DISCLAIMER (absolute defence – D
will be released from liability) ) -> NO-> THE D IS LIABLE

è YES -> D IS NOT LIABLE OR THE D’S LIABILITY WILL BE PROPORTIONALLY REDUCED (Contributory Negligence)

VII. HOW TO ANSWER PROBLEM-SOLVING QUESTIONS

IRAC METHOD OF ANALYSIS

I = Issue(s): Identify the legal issue(s): (2-3/25)

R = Rule(s): Identify the legal rule(s) : (5-6/25)
A = Application: apply legal rule(s) to the facts of the case in order to address the legal issue(s) (13-15/25)
C = Conclusion: Draw a conclusion from the application above (i.e., short answer to the legal issue(s) and the problem question:
(2-3/25)

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 CHAPTER 1: An introduction to Law and the Australian Legal System
I. The definition and functions of law
1. Defining law
- The “law” is the body of enforceable rules, made by the state - the parliaments (quốc hội) and the
courts - that is enforceable by the state.

- Commercial “law” consists of those “laws” - for example, contract law, corporations law, consumer
law, tort law, product liability law, agency law - applied to the world of business and is enforceable
(được áp dụng) by the state-backed sanctions

- There are two important factors that set a law apart from other rules:
+ “Laws” are made by state (parliament and the courts)
+ “Laws” have state-backed enforcement apparatus, procedures and sanctions depending on
whether the matter is civil

2. The functions of law

There are a number of functions that the law has in a civil society (5 functions):
- It regulates, in the normative sense, the way we live. Laws inform us what we may do, how we
should do it, what we cannot do, what we must do if we wish to avoid the sanction.
- It has a dispute resolution function (khả năng giải quyết mâu thuẫn)
- The law maintain stability and social cohesion (giữ vững sự bền bỉ và liên kết xã hội)
- Law reinforces community values (củng cố những giá trị cộng đồng)
- It promotes equality before the law and uphold the rule of law
+ Equality before the law is the idea that all citizens have the same legal rights and duties,
regardless of age, sex, religion, race or socio-economic status.
- The Trade Practices Act 1974 (Cth) no longer regulates business or commercial law. It regulates:
Competition and Consumer Act 2020, Corporations Act 2001, and the law of contract
3. The rule of law
Rule of law can be summed up in 2 points:
(1) That the people (including … the government) should be ruled by the law and obey it
(2) The law should be such that people will be able (and … willing) to be guided by it
Australia’s Magna Carta Institute has developed the following rule of law principles that expand on these
two basic points:
- The separation of powers between the legislature, the executive and the judiciary (bộ tư pháp)
- The law is made by representatives of the people in an open and transparent way
- The law and its administration is subject to open and free criticism by the people who may assemble
without fear
- The law is applied equally and fairly so that no one is above the law.
 4. Law is recognized and is communicated
- The law is capable of being known by everyone, so that everyone can comply
- No one is subject to any action by any government agency other than in accordance with the law
- The judicial system is independent, impartial, open, and transparent and provides a fair and prompt
trial
- All people are presumed innocent until proven guilty and are entitled to remain silent and are not
required to incriminate themselves
- No one can be prosecuted (pháp lý) for any offense not known to the law when committed
- No one is subject adversely to a retrospective (hồi tưởng quá khứ) change of the law.

5. Transparency in terms of law that is capable of being expressed

- Not an example of an unfair contract term The specifics of Rose’s situation were not taken into
consideration by Melton Apartment Construction Ltd.
- Concepts is closely related to the rule of law: The due process
- Concept is not closely related to the rule of law: 1. Representative government, 2. a responsible
government, and 3. separation of powers
- Separation of power: The executive is the body that administers the law.
- The executive power is administered by the Queen, the Prime Minister, and the Cabinet

Separation of powers established by the Constitution

Parliament (quốc hội) - Makes laws (statutes)

Legislative

Parliament: upper house (thượng viện)/ lower house (hạ

viện)
 Executive Government Administers (quản lý) or executes (thi hành) the laws made
(chính quyền) – by Parliament & carry out state-affairs (công việc nhà
Government Cabinet (Nội nước)
các)

Power derived from:

- constitutionally from their membership of the

Federal Executive Council and status as “advisers” to
the Governor-General

- politically, from the people at elections for the

House of Representatives (hạ viện)

- from convention (custom and tradition) (quy

ước)

ð “Reserve Power”: The powers of the Governor-General

to act without advice
- The Governor-General on the Queen’s behalf gives
Royal Assent to an Act of the Commonwealth
Parliament

Judicature (tư pháp) – Interprets and applies the laws (common law) & Enforce
Court Systems the laws

Sources of legislative power under Federal Constitution

Exclusive Power Only Commonwealth Parliament (Liên bang quốc hội) makes
(quyền hạn độc quyền) law
– Federal
Exclusive powers are those that can be exercised only by the
Commonwealth.

Eg: currency, bankruptcy, corporation, IP (copyright, patent,…)

 Residual Power (quyền Only the State Parliaments may make laws
hạn còn lại)

Eg: not listed in exclusive and concurrent (healthcare,

partnership, contract,…)

Concurrent Power The law-making is shared between the Commonwealth and the
State Parliaments (Power-shared)

Concurrent powers is the type of lawmaking power to the

Commonwealth Parliament that Section 51 Commonwealth
Constitution grants

Eg: banking, taxation, insurance,…

Three branches of the Commonwealth government in Australia: The executive, the judiciary, and the
legislative
II. Sources of law
 There are two sources of law:
- Primary source of law: document that contains the law itself - for our purposes, a case or a statute
- Secondary source of law: a resource that explains or analyzes the primary source or is prepared for
law reform purposes - scholarly texts, articles in academic journals, law reform commission reports
and other commentary, both national and international

- Sources of law: sources of law in Australia do not include repealed statutes. Includes: 1. Consolidating
statutes, 2. judge-made law, and 3. Equity.

- The two main types of law in Australia are statute law and judgment-made law

- Extrinsic materials include 1. Law reform commission reports, 2. Parliamentary Committee reports,
and 3. Parliamentary Debates. Specifically, The internet is NOT an example of an extrinsic source of
material

1. Statute Law
Statute may:
- Brings new laws into existence
- Repeal old laws created by earlier statues or by decisions of the courts, which have ceased to be
appropriate to present social needs
- Codify the law, that is, to include not only previous statutory provisions but also common law
principles derived from decisions of the courts
- (i) Statutes may not overrule existing common law.

2. The making of statutes

The Literal Rule, The Golden Rule, and the Mischief Rule (summary)
When comparing the three rules, there are differences and similarities. The Literal Rule is the basis
of all cases. By providing no scope for the judges input, it upholds the separation of powers and
respects parliamentary supremacy. However, its inflexibility can also create injustices

The Golden Rule tries to compliment the Literal Rule by allowing judges to change the meaning of
statutes in order to give justice.

The Mischief Rule gives the most discretion to judges and is suited to specific, often ambiguous
cases. The rule allow statutes to be refined and developed
III. Judge-made law (or case-law)
Judge-made law: Another important source of law, which comprises the principles of law
propounded (đề nghị, đề xuất)by judges in deciding particular cases
Also referred to as the “ common law” -used in a number of different ways:
(a) The phrase “common law” may refer to the law made by judges as distinct from statutory
law which made by Parliament
(b) Body of law historically made by the common law courts as distinct from equity law that
was made in courts of equity
(c) Refer to the system of law practiced in Britain as distinct from a civil law system as
practiced in other countries

IV. The doctrine of precedent and the hierarchy of Australian courts

- The doctrine of precedent (học thuyết án lệ): similar cases should be decided in a similar way / legal
principles applied in similar situations should be consistent

- The doctrine of precedent: With respect to a case being decided under the appellate jurisdiction of
the Country Court of Victory, a decision of the appellate division of the District Court of New South
Wales on the same Commonwealth legislation is persuasive.

- Terra Nullius is the Latin phrase explained the rationale for applying English laws to the new Colony
of New South Wales

- A decision of a court that brings judges in a lower court in the same court hierarchy is a binding
precedent

- Commonwealth of Australia Constitution Act 1900 established the federal legal and political system
and converted the separate colonies into states

For example: Farah agreed to take care of an elderly woman Marge and in return was provided with
a house to live in that was promised by Marge to be Farah’s after she died. Farah cared for the woman
for 23 years, but upon Marge’s death, Farah discovered that their oral agreement was never put into
writing. The woman’s son moved into the house and Farah made a claim to the house => The court
is likely to apply the doctrine of part performance.

V. Civil and criminal law

The document filed by the defendant is called a writ:
(a) The typical purpose of a civil action is to obtain damages
(b) Under civil law, one person may sue another who has committed a wrongful act
(c) Interrogatories and discovery are procedures that are available in civil proceedings
Hierarchy of the Australia courts
Federal courts

High Court of Australia - highest court of Australia

- Has both an original and appellate
jurisdiction
- The court has original jurisdiction in
matters: (i) arising under any treaty; (ii)
affecting consuls or other representatives
of other countries; (iii) in which
Commonwealth is a party; (iv) between
states, residents of different states or
another states
- Is the final appeal court in Australia
- Decisions of the High Court of Australia
found only online in the Commonwealth
Law Report
 Federal Court of Australia - Has both original and appellate jurisdiction
- Enforces federal legislation
- Has concurrent jurisdiction over
bankruptcy and intellectual property
matters

Federal Circuit Court - Be established to provide a simple and

accessible alternative to litigation (sự kiện
tụng) in the Federal Court of Australia and
the Family Court of Australia to relieve the
workload of those courts

Family Court of Australia - A superior Australian federal court that

deals with family law matters, such as
divorce, custody (quyền giám hộ) and
property disputes
- Covers in all states and territories except
for Western Australia

Australia is not a federal system, with two legal systems for each citizens
State courts

Supreme court - The highest court, which examines both

civil and unlimited criminal jurisdiction
- The original jurisdiction of Supreme Court
is exercised by a single judge

Country or District Court - Intermediate courts which have a

statutory jurisdiction.
- This jurisdiction is limited with respect to
subject matter and value of money or
property dispute

Magistrates or Local Courts or Courts of Petty - The lowest courts in the hierarchy of State
Sessions Courts
- In civil cases, the jurisdiction of the courts
is generally limited to claims up to a
certain monetary value (=$100,000)
 ⇒ Hierarchy of courts: High court is higher than the Federal Court of Australia in the federal court -
system.
(i) - Supreme Court
- Magistrates Court
- Federal Magistrates Court

Other Courts and tribunals

- There are a number of other courts and tribunals in Australia both at federal and state level

Federal tribunals and commissions

- ACCC (Australian Competition and Consumer Commission): has general responsibility for initiating
proceedings for contravention of the Commonwealth Competition and Consumer Act 2010 in anti-
competitive conduct cases

VI. Classification of law and legal proceedings

- Public law: concerned with the organization of government and with the relationship between the
government and the people
+ Includes constitutional law (defines the structure of government and the rights of individuals
under government), administrative law (regulates the exercise of powers and duties by
government administrative officers and authorities) and criminal law (defines offenses against
the State and provides punishment for their commission)
- Private law: deals with the relationships between private persons and organizations. There are many
branches of private law:
+ The law of contract, which is concerned with the rights and duties arising out of those
agreements between individuals the law regards as legally binding
+ The law of tort, which requires a person who has committed a civil wrong to compensate the
person against whom or whose property the wrong was committed
+ The law of property, which deals with the ownership, possession, use, and disposition of both
real property and personal property
+ Corporation laws - regulates the incorporation, administration, winding-up (phá sản) and
dissolution (giải tán, giải thể) of companies, and the responsibilities of directors and other officers
of the company
+ The law of trusts - determines the circumstances in which and the conditions on which a person
holds property on behalf of another person
+ Where an act is both a crime and a tort, the State may prosecute the offender for the crime, and
the victim may bring a civil action.
Substantive law and procedural law
- Substantive law: refers to actual rights and duties under the law
- Procedural law: refers to the formal steps that must be followed in the enforcement if those rights
and duties, in particular, the rules of procedure and evidence
Civil law and criminal law
- Civil law: law under which a person may sue (kiện) another to obtain redress (bồi thường) for a
wrong committed by the defendant (người đi kiện) - nếu bị kiện sai thì người bị kiện có thể áp dụng
luật này để đòi tiền bồi thường từ người kiện họ
+ Purpose: obtain monetary compensation or damages for the loss suffered by the plaintiff as a
result of the defendant’s wrongful act
- Criminal law: defines offenses against the State and provides punishment for their commission
+ Crimes are defined by statute, delegated legislation or the common law and are prosecuted in
the name of the Crown on behalf of the State
+ Delegated legislation can only be made by Government Ministers:
 (a) Delegated legislation is subordinate legislation
(b) Is made under the authority of an Act of Parliament
(c) Often contains more detailed rules than those of the associated Act
+ An example of delegated legislation is the Corporations Regulations 2001 (Cth)
+ Criminal offenses:
● Summary offenses - criminal offenses triable summarily, offenses which are heard and
determined by a magistrate without a jury - more serious offense
● Indictable offenses - there is a preliminary or committal hearing before a magistrate who
conducts an inquiry to see if there is sufficient evidence to put the defendant on trial
● Criminal offenses are indictable offenses are generally the more serious offenses, summary
offenses are determined by a magistrate without a jury, and the prosecution must prove its
case beyond a reasonable doubt.
● An indictable offense is more serious than criminal offense
+ With respect to criminal offences:
● Indictable offences are generally the more serious offences
● The prosecution must prove its case beyond reasonable doubt
● Summary offences are determined by a magistrate without a jury

Domestic and international law

- Domestic law: applies within particular legal jurisdiction (e.g. corporations law or the law of contract
is domestic law)
- Public international law: regulatate relationships between nation states and is found in customs,
treaties and conventions that generally speaking apply only when ratified (adopted) by a nation state
- Private international law: a way to determining how to resolve disputes between individuals
(including corporations) in different states
The legal profession
a. Solicitors
- General practitioner of the law.
- Where a member of the public has a dispute which has legal implications, requires legal documents
to be drawn up in respect of a particular transaction or needs advice on some aspect of the law =>
they will consult a solicitor
- Work of solicitors: draw up contracts regarding commercial dealings, follow through the legal
technicalities of forming a company and advising on taxation matters
b. Barristers
- Responsible for actually conducting cases in court/also provide solicitors with legal opinions on
difficult points of law
- Specialise in a particular branch of law
VII. Alternative methods of dispute resolution
1. Commercial arbitration (trọng tài thương mại, luật lệ thương mại)
- Arbitration: the reference of a dispute to an independent third party selected by the parties or by
their nominee instead of litigating the matter in the courts
- Advantages of arbitration:
+ Avoidance of publicity (since the proceedings are private)
+ Avoidance of delay in having the dispute settled
+ A simpler and less formal than that in a court of law
+ Reduction of expense
2. Alternative dispute resolution
- Alternative dispute resolution (or ADR): refer to methods of dispute management that offer an
alternative to litigation. Can be classified as three types:
+ Facilitative processes: negotiation and mediation
+ Advisory processes: conciliation and independent expert appraisal
+ Determinative processes: arbitration and private judging
3. Negotiation
- The most commonly used method of resolving disputes
- The majority of commercial disputes are resolved by negotiation between parties
4. Mediation
- Where the parties are unable to negotiate a settlement between them => seek mediation of the
dispute
- Meditation: a voluntary negotiation process in which a neutral third party, the mediator, assists
disputing parties to find their own solution to their dispute by helping them to isolate the issues in
dispute, develop options for their resolution, reach an agreement - accommodate the interests or
needs of all the parties
5. Conciliation
- In conciliation: a neutral third person assists the parties to negotiate as in mediation but exercises
greater influence over the outcome than is the case of mediation
- Conciliator: suggest opinions and possible solutions - more directive than a mediator

CHAPTER 2: Introduction to the Law of Contract

I. Basic Functions of Law Contract
- Promote certainty: contractual promises must be honoured (tôn trọng) or compensation or other
remedies (biện pháp khắc phục) will be available to the innocent party
- Facilitate planning: parties can more confidently plan for the future, knowing what is expected of
them and what they can expect of the other party
 - Establish market value for goods and services: the contract fixes the price of property, goods or
services (or provides mechanisms to determine the price)
- Provide for a formal dispute-resolution process (quy trình giải quyết tranh chấp chính thức) if and
when required
- Allocate risk: economic risks are allocated in advance by the parties (A little difficult to conceptualize,
until we see how it works in practice)
- Native title was first recognised in the case of Mabo v State of Queensland (No 2)(1992) 175 CLR 1.

II. The evolution of the law of contract (19th century)

- The main tool that facilitated and concluded market transactions

- Reflected the individualistic, self-reliant ethic of the times - parties had the freedom to negotiate
and consent (agree) to the terms of their contract, the courts ensured the sanctity (tôn nghiêm) of
the contract by strictly enforcing the terms of the contract (except where there was no genuine
consent (không có sự đồng ý), such as where the agreement was affected by vitiating (vi phạm)
elements, eg, mistake, fraud, duress or misrepresentation)

- The mass production of goods in the 20th century signaled a growing gap between manufacturers
and industrialists and workers and consumers -> Competition and Consumer Act 2010 (Cth),
Insurance Contracts Act 1984 (Cth), Credit Act 1984 (Vic), Residential Tenancies Act 1997 (Vic)
- In Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107, it was held that the
subcontractor could get an indemnity even though the subcontractor had given no consideration
under the contract

Consideration of the plaintiff:

- In Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [[2016]] HCA 26 why did the High Court
disagree with the decision of the Victorian Court of Appeal in finding there was no case for
promissory estoppel:
a) The plaintiff could not establish that the statement that it would be “looked after at renewal
time” was capable of conveying to a reasonable person that it was a genuine offer of a further
lease, and
b) There was a need for certainty as to what the parties had agreed on at the end of the
negotiations to find a claim for estoppel.

- The High Court’s decision in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387: extended the
doctrine of equitable estoppels such that it applies even where there is no pre-existing contractual
relationship between the parties.
 Brennan J’s six criteria for estoppel from Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

- The promissory induced an assumption

- The promisee acted in reliance on that assumption

Tthe promisee will suffer a material loss if the assumption is not fulfilled

III. Definition of a contract

- A contract: an agreement between two or more parties under which legal rights and obligations are
created which are enforceable in the courts.
- The law of contract: concerned with the principles applicable to the formation, performance,
interpretation and breach of contracts (vi phạm hợp đồng).
- Damages must not be too remote from a breach (Correct)
- In interpretation, extrinsic materials are allowed to be referred to by a court.
- With respect to interpretation:
+ The main approach used by courts is the literal approach
+ The requirement that the natural and ordinary meaning be given to words
+ The courts are free to exercise judicial discretion
- Section 15AA of the Acts Interpretation Act 1901 (Cth) provides that the purpose of the statute or its
object should be preferred method of determining the statute’s meaning.
- Contracts: It is a statutory requirement throughout Australia that some contracts must be in writing
and others must be evidenced in writing

IV. Essential elements of a contract

- Offer & Acceptance: an offer by one party and its acceptance by the other indicating the parties have
concluded an agreement
For example: Simone advertises a car for $4,000. John responds to the advertisement and asks
whether Simone will take $3,000. Simon says “no”, but that she will hold the offer open for a week.
The next day, she sells it to Samantha => Simone does not have to hold the offer open since no
consideration was given.

“I’ll pay you $3,000 if you complete a total rewrite of chapters 12 and 15 of this textbook.” is most likely
to be considered an offer

- Intention to create a contract: the parties create legal relations (bc not all agreements are enforceable
at law)
- Form or consideration: valuable, bc the law will not enforce a promise for which nothing is given or
promised in return (unless the promise is made by deed (chứng thư)
For example: Andy promises Ellie $100 on her 21st birthday. If this promise was contained in a simple
contract, the legal position is that such a promise is => never binding as it must have consideration
supplied by Ellie.
- Legal capacity: legally capable of reaching a binding agreement (có năng lực để đạt được thỏa thuận
ràng buộc)

(a) Not correct with respect to the prohibition of unconscionable conduct within the meaning
of the unwritten law: Unequal bargaining power of itself is enough to constitute a special
disadvantage.
-> True: 1. Unwritten law includes equity, 2. There is no unconscionable conduct where both parties
have made the same mistake in good faith, 3. There must be a special disadvantage and exploitation
of that disadvantage.
(b) (In): A firm is not bound by the acts of a partner if the person with whom the partner is
dealing knows or believes him/her to be a partner. - ©: 1. the act is not of the usual
business of the kind carried on by the firm, 2. the partner exceeds his/her actual authority
in the particular matter, and 3. the person with whom the partner is dealing knows that
he/she has exceeded his/her authority.

- Genuine consent (sự đồng ý chân chính): The nucleus of all contracts (tính cốt lõi) (Some factors
affecting: mistake, misrepresentation, duress and undue influence

If one party has threatened another party to enter into a contract, the element that is missing is
real/genuine consent.

Mistakes and duress and undue influence are likely to affect the consent of one or both parties to a
contract

- Legality of object (tính hợp pháp của đối tượng): an illegal purpose or involves illegal conduct – either
at common law or under statute -> unenforceable and/or sanctions for the parties (hình phạt)
- Revocation after acceptance has been mailed where the postal rule applies is not the way that offer
can be terminated. (T): Lapse, revocation before acceptance, or lapse where no time was stipulated.
- The ratio decidendi of a case is the reason given for deciding the case
- The Age of Majority Act 1977 (Vic) reduced the age for contractual capacity of a minor to 18.
- With respect to the contractual capacity of corporations, s 124 of the Corporations Act 2001 (Cth)
gives them all the legal capacity of a natural person (together with some additional powers that can
only be exercised by a corporation)
 Respect to revocation:
- Revocation need not be in words
- The offeree may accept the offer until such time as they become aware of the revocation
- Where an offer has been made to the world at large, the revocation does not need to be seen by
everyone in order to be effective

V. Classification of contracts
- Simple Contracts: may be oral, may be wholly or partly in writing (Eg: statutory provision - văn bản),
may be implied (ngụ ý) by the conduct of the parties. Every simple contract must be supported by
consideration.

- Contracts under seal (or deeds): no legal requirements, must take a certain form or it is invalid
(không hợp lệ), must be wholly in writing, must be signed by the person/s executing the deed (chữ kí
người thực hiện chứng thư), must be witnessed (làm chứng). The major difference between a deed
and an agreement is that there is no requirement that consideration be provided.

- Express and implied contract:

Express (usual type) the intentions of the parties are stated in explicit terms,
either orally or in writing

Implied inferred from (suy ra) the conduct (hành vi) of the parties and
the surrounding circumstances

- Bilateral and unilateral contracts:

Bilateral (Song phương) “promise for a promise”

consist of the exchange of mutual promises, the actual
performance of which is to occur at some future time

Unilateral “one party promises to do something in return for acts

performed by the other party”
inviting acceptance by actual performance rather than by
a promise
 Statements about the bilateral and unilateral contracts:

- More than 1 party is required for both bilateral and unilateral contracts

- Both parties are obliged to perform their promises in a bilateral contract

- while only 1 of the parties is obligated to perform an action in a unilateral contract

- Valid, voidable, void and unenforceable contracts:

Valid Contracts all the essential elements are present

the usual remedy for breach of the contract: a judgment
for damages
where a contract restricts one party from exercising their
trade, it may be valid provided it was reasonable as
between the parties and the public.

Voidable Contracts a party may avoid (get out of) if that party wishes to do so

Eg: a person who was induced to enter into a contract by

the other party’s fraud (gian lận)

Void Contracts as far as the law is concerned, never existed at a

no legal effect between the parties, not create legal rights
(quyền) or obligations (nghĩa vụ)

Eg: a contract to commit a crime

Unenforceable prima facie a valid contract but which by reason of some

technical defect is not capable of being enforced by action
by one or both of the parties (thoạt nhìn thì hợp lệ nhưng
vì lỗi kĩ thuật)
Jacq and Jack robbed the Commercial Bank. Jacq thinks
that Jack was too aggressive with the tellers and the
robbery could have gone very wrong. Jacq is now refusing
to give Jack his share of the takings. Correct statement:
The contract involved the commission of a crime and is
therefore illegal and unenforceable.

Sửa trắc nghiệm cuối giờ:

● A contract dividing the proceeds of a cocaine importing venture that has no technical defects and that
is not overly harsh/unfair to either party is void.
● Contracts voidable by a minor do not include those not binding unless ratified by the minor during
their minority

CHAPTER 3: OFFER AND ACCEPTANCE

I. The Offer
- An offer is a proposal by one party that, if accepted by the other party, results in a legally
binding contract.
- If the offer is made expressly (in writing or orally) or is implied by conduct (as many
contracts are) an offer should be certain as to its major terms, to ensure the result is an
enforceable contract.
1. Offers distinguished from mere puffs, invitations to treat and statements supplying information

a. Offers and mere puffs

- Mere puffs (mere puffery): statements containing such exaggerated claims and assertions
about products or services or property that no reasonable person would take them seriously
E.g. “faster than a speeding bullet” statement; “our soap powder washes whiter than white”
=> Puffs are not regarded as offers, in the legal sense, and have no contractual significance

b. Offers, invitations to treat and statements supplying information

- An offer may give rise to a contract, but an invitation to treat may not.
- Window displays, catalogues, circulars (tờ rơi) and the like are generally regarded as
invitations to treat and not offers.
- An advertisement may be regarded as an offer if it is sufficiently definite in its terms (e.g.
In relation to quantity, quality and price), and is communicated in such a way that a
reasonable person would say that the advertiser intends to enter into a contract if the
response from the person receiving the communication is positive.
 E.g. An advertisement saying “the first 50 people through the doors will receive a
Samsung TV at half price” is an offer accepted by the first 50 people who come through
the doors.

c. Main features of the Electronic Transactions Act 1999 (Cth)

- The validity of electronic transactions, recognition of writing by electronic means, and

recognition of retaining information in electronic form.

2. Auction sales
- An auction is a sale conducted in an environment where bidders compete against each
other for goods or property.
- The process remains the same: the bidder who offers the highest bid is normally the
successful buyer.
- An auction can be performed either by the seller/owner or through an agent/auctioneer
(who is generally the agent of the seller).
- Bidders may be present or may bid by phone or via the internet.
- When the auctioneer calls for bids this is an invitation to treat.
- When bidders call out their bids this is an offer.
- If or when the seller/auctioneer “knocks down” the property to the successful bidder this
is the acceptance.
=> In this way, a binding contract is created
- It is not unusual for the seller to set a reserve (or minimum) price in advance. In such a
case, the owner reserves the right not to sell the property and may, before the highest bid
is accepted, withdraw the property from the sale.
a. Online sales
- Auctions conducted online, such as on eBay, have the same process of contract formation
as internet shopping.
- In an online auction, the listing constitutes an offer, not merely an invitation to treat.
b. Tenders
- An advertisement calling for tenders (kêu gọi đấu thầu) is usually regarded as an invitation
to treat.
- The tender process is often used by governments and councils to, for example, provide
services, like hard rubbish collection for a local council or to build freeways or tunnels or
other infrastructure.
- A party submitting a tender makes the offer, and there is no contract until the person who
called for tenders accepts the tender.
 - If the call for tenders states that the highest or lowest tender will be accepted (or that all
tenders will be considered), a failure to comply may be a breach of a collateral warranty
(promise).

3. Persons to whom an offer may be made

- An offer can be made to a specific person or persons, to a particular class of persons, or to
the world of large (the entire world).
- The person or persons for whom it was intended are the only ones who can accept it.
- If the offer is made to the world at large, for example, by way of a general advertisement,
then it may be accepted by anyone who reads the advertisement.

4. Communication of offer
- The offer must be communicated, that is, brought to the notice of the person to whom it
is made.
- Unless an offer is communicated, there can be no acceptance and therefore no contract.
- Century Dragon Pty Ltd is contracted to export 1000 beach balls to Minerva Beach Surf
Club by 1 January, with payment due by 1 April. Correct- The time of delivery is likely to be
considered an essential term.

5. Revocation of offer
- An offer can be revoked at any time before acceptance.
- The revocation is only effective when it is communicated to the offeree.

6. Option agreements
- Until the time the offeree becomes aware of the revocation, he or she can accept the
offer and create a valid and binding contract.
- The law does not stipulate (qui định) any particular way in which the revocation is
communicated to the offeree, provided that revocation actually comes to the offeree’s
notice.
- A promise by the offeror that their offer will remain open for a period of time is not
generally enforceable unless the parties enter into separate option agreement.
- Under an option agreement, the offeree provides consideration (sth of value, usually
money) to the offeror in exchange for the promise to keep the offer open.
7. Lapse of offer

- Peter verbally offers Tara his car for $5000. Tara refuses saying it’s not worth that, but she
will pay $4000. What is the status of Peter’s first offer? It has lapsed because of Tara’s
counteroffer.

- A qualified acceptance may also be known as a counteroffer

- An offer will lapse (invalid, vô hiệu lực):
(a) If not accepted within the time stated;
(b) If not accepted within a reasonable time, where no time for acceptance has been stated;
(c) If a counteroffer (an offer made in response to another) is made
E.g. If X offered to sell her car to Y for $50,000 and Y replied that she would pay $45,000
for the car => This reply constitute a counteroffer to buy and the original offer would
lapse
(d) On the death of either party before acceptance.
(e) By loss of contractual capacity by either party, for example, by insanity.
For example: Where Wrench had an option to purchase land but, unknown to Wrench, the seller
died prior to Wrench’s acceptance is the offer most likely not to have lapsed II. Acceptance
 1. Rules as to acceptance (pp. 73)

There Are 7 rules:

+ Must be communicated unless waived or unless postal rule applies.
+ Must be in response to the offer.
+ Must be unconditional.
+ Must be follow any method set out in offer.
+ Can only be accepted by a person to whom offer directed.
+ Special rules: postal acceptance and electronic communication.
+ May be by conduct but cannot imposed by silence.
+ The postal acceptance rule can be impliedly excluded by offeror specifying actual
receipt of acceptance.

1. Acceptance of an offer must be communicated to the offeror.

● Acceptance can be communicated by words, writing, electronic communication, or by conduct or
acceptance of an offer must be communicated to the offeror
 ⇒ Effective when the offeror receives the communication.

● Acceptance can be implied from the conduct of the parties either from past dealings or, in a
particular instance where, as in the following case, the traditional “offer and acceptance” model
does not apply.

● The test of whether a statement is a term or a representation is not dependent on whether the
party making the statement believed in the truth of the statement or not

● The main legal issue in Felthouse v Bindley (1862) 11CB (NS) 869 was generally silence/ lack of action
does not constitute acceptance of an offer.

❖ Some exceptions to the rule:

- Where the contract is a unilateral contract.
(A unilateral contract is when acceptance and performance occur simultaneously)
- The postal acceptance rule. (explain ở mục dưới)

2. Postal Acceptance Rule

- The rule states that where acceptance by post is contemplated by the parties the acceptance is
complete when a properly addressed letter of acceptance is properly posted by the offeree.

3. Acceptance cannot be inferred from the silence or inaction of the offeree.

- It means that an offeror CANNOT say that if THE OFFEREE DOES NOT COMMUNICATE, this will be
taken to be an acceptance of the offer.
4. An acceptance must be in response to an offer.
5. Acceptance must be unconditional.
- A qualified acceptance would be a counter-offer.
- Example: the offeree would accept the offer “provided you deliver the goods to my place of
business” → đây là yêu cầu (condition) hay còn gọi là “a qualified or conditional “acceptance”’ ⇒ do
đó, DOES NOT result in a legally enforceable agreement.

6. An acceptance must follow the conditions or the form stated in the offer.
- Where the offeror does not specify any particular form of acceptance, there is a presumption
that acceptance will be in the same form as the offer.

7. Acceptance can be made only by the party to whom the offer is made.
- An offer may be made to one or more people or to the world at large.
 ⇒ Communication of acceptance must be made in a regular and authorised manner.

1. Acceptance can be by telephone or email or conduct,

2. Acceptance must be unconditional, and
3. Acceptance can only be made by the person(s) to whom the offer was made.
2. Uncertainty
- A contract must contain all the essential terms if it is not to fail for uncertainty.
- The terms agreed between the parties must be sufficiently cohesive and coherent to stand as a
contract in their own right.
- An ambiguous term will not be void (invalid) for uncertainty unless it is so vague as to be
meaningless.
3. Illusory contracts
- Illusory contract terms are those provisions of an agreement which are so vague, ambiguous or
grant one party so much discretion, that they fail to create an actual legal obligation. (illusory=not
real)

- Illusory terms in a contract are problematic since they are vague or ambiguous so they fail to create
a legal obligation.

- Women is not a class of persons regarded by the law as wholly or partly incapable of entering into
legally binding contracts

- The verbal language of the agreement greatly lacked detail from either party and did not indicate
definite obligations was the main reason for the court deciding that there was no intention to create
a legally binding contract was the main reason for the court deciding that there was no intention to
create a legally binding contract

CHAPTER 4: INTENTION TO CREATE LEGAL RELATIONS

I. Intention an social and domestic agreements:

1. Agreements between a husband and wife:
- In normal circumstances, where the parties were living “in amity” at the time an
agreement was made, the courts will regard them as not having intended to create a
legally binding agreement. (thỏa thuận ràng buộc về mặt pháp lý)
- HOWEVER, the parties may intend to create legally binding agreements where those
agreements are made AFTER the relationship has broken down.
- In Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625, Gibbs CJ listed all but the
following various ways that a contract may be repudiated “[I]f one party discharges
 [themself] from performance by agreeing to a new agreement that supersedes the
previous one”.

- In Barton v Armstrong [1976] AC 104, the court held that the threats to the plaintiff’s life
contributed to the plaintiff’s decision to sign the contract and therefore constituted duress.

2. Other family or social agreements

- Education is not an area that the Commonwealth Parliament has the power to legislate on
under s51 of the Commonwealth constitution

- Section 128 of the Commonwealth Constitution provides that the Constitution can be
changed by referendum that requires a “yes” vote by the majority of voters and in a
majority of States.

- Respect to mitigation of loss is not correct: The burden of proving that losses were
mitigated falls upon the party claiming the damages ie. the defendant.

- The following is the general position of the courts when awarding damages: Where it is
possible to place an innocent part in the position he/she would have been in if the breach
had not occurred.

- With respect to consumer guarantees, the following is not correct: With respect to fitness
for purpose, a “disclosed purpose” relates to the supplier only - the manufacturer may
make representations to the consumer, but the consumer cannot disclose a purpose to the
manufacture and receive a guarantee in return. → Correct: 1. It is possible to exclude the
consumer guarantees in very limited circumstances, 2. Remedies for non-compliance with
the consumer guarantees depend in whether there was a “major failure” or not, and 3. A
manufacturer does not need to provide repair facilities or spare parts after a certain period.

- Consumer guarantees as to title are contained within sections 51-56 and ss 60-61 of the
Australian Consumer Law.

II. Intention and commercial agreements:

→ Where an agreement is reached in the course of business dealings, the circumstances
will generally indicate that the parties intended to create legal relations.

Where an agreement has been made during the course of trade or commerce between businesses,
the situation will commonly indicate that the parties intended to create binding legal relations

1. Express exclusion of intention:

 - Where the agreement includes an express stipulation that it is not intended to give rise to legally
enforceable obligations, the courts will give effect to such provision and the agreement will not
be enforceable.
- It is common to insert in competition and lottery forms a stipulation to the effect that entry into
the competition is not intended to give rise to legally enforceable obligations.
- ©: Damages must not be too remote from a breach.
For example: Simon and Stella, both of full legal capacity, agree to go on a date. Stella is to pay
for the dinner, but she is running late and does not meet Simon at all. Simon is embarrassed and
angry and calls Stella the next day sto threaten to sue her for his taxi fares and dinner expenses.
Will Simon succeed in his claim?
=> No, because Simon and Stella did not intend the agreement to create legally enforceable
obligations

- The following is not an unfair practice under the Australian Consumer Law: Where a television
advertisement for a chocolate bar shows teddy bears working the manufacturing lines.
2. Letters of comfort: (Thư xác nhận)
- A letter of comfort is usually written by a parent company to a lender giving “comfort” to the
lender about a loan to be made by the lender to a subsidiary of the parent company.
- Letters of comfort tend to be construed by the courts as merely statements of commercial intent
and not legally enforceable contracts of security, such as a guarantee.

- Why latet payment charges on credit cards not penalties: Banks penalties on cards are legitimate
to cover their costs.

- In Curtis v Chemical Cleaning & Dyeing Co Ltd [1951] 1 KB 805, the exemption clause in the sales
agreement for the drycleaning was not sufficiently explained to the customer.

- The following is not a situation where frustration would occur: Where the performance of the
contract is rendered illegal by the destruction of the subject matter of the contract by one of the
parties.→ A situation where frustration would occur: 1. Long term serious illness of a person
contracted to perform a personal services contract, 2. Where the government in exercising its
powers has made completion of the contract impossible, and 3. Where a change in the law renders
performance of the contract illegal.

- Constitutions in Australia ©:

+ The Commonwealth Constitution sets out the relationship of the Commonwealth

government with the States
+ A written constitution is a feature of a federal legal system such as Australia
+ The Commonwealth Constitution sets out the powers of the Commonwealth
government
 + (i) Australia has one constitution only (States have no constitutions).

3. Government policy proposals: (đề xuất chính sách chính phủ)

- Promises made by government → create contractual obligations (nghĩa vụ về hợp đồng)
between the government and some or all of the citizenry.
Eg: promises regarding tax cuts (giảm thuế) or the GST or to increase the $130 billion
JobKeeper package introduced during the COVID-19 health and economic crisis or to
extend the subsidy on solar panels.
→ điều này yêu cầu nghĩa vụ giữa chính phủ và người dân.

** HOWEVER, broken policy commitments → leads to political consequences.

- The government enters into normal commercial agreements to buy or sell goods or
services, the parties to commercial contracts intend them to be legally enforceable (ràng
buộc về pháp lý)
Eg: the governement signs contracts to purchase a fleet of cars or to construct a school
hall or to build an $8 billion tunnel or a tollway

- Where the government makes a policy promise and a citizen relies on it the court will
always regard that policy commitment as a binding contractual obligation is the incorrect
statement about contractual obligations of government policy proposals. ©
+ The courts tend not to assign contractual obligations to government policy
promises
+ Where the government enters into an ordinary commercial agreement to buy
services, : the law of contract regulates this agreement
+ In Australian Woollen Mills Pty Ltd v Commonwealth of Australia (1954) 92 CLR
424, the : government’s wool subsidy was found to be an administrative scheme
and not contractual : obligations. For example: Sally puts up a sign stating that she
lost her dogs and will pay a reward of $100 for their return to her within 3 days =>
Chang will not get the reward because he returned the dog knowing it was Sally’s,
but unaware of her offer of a reward

- The following is not a type of contract void at common law? An agreement that offends the
Australian Consumer Law (ACL).

→ A type of contract void at common law: 1. A contract to oust the jurisdiction of the courts,
2. A “marriage brokerage” agreement whereby money is paid in order to procure a
marriage, and 3. A price maintenance agreement that restrains trade.
- The concept “quantum meruit” mean? The innocent party would be unjustly enriched if
they were able to retain the benefit without compensating the party in breach for the
“amount he deserves”.

- In Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 the court recognized “reasonably
foreseeable losses” as being

a) Losses that arise naturally from a breach of contract, and

b) Losses that are actually contemplated by the parties.

- The following is correct with respect to privity of contract: Despite the doctrine, a new
owner of land is able to enforce a covenant between the previous owner and another party.

Chapter 5: Consideration, Promissory, Estoppel and Formalities

I. Simple Contract

- Not formal, made under seal

- Eg: formed by verbal agreement, the conduct of the parties’ implication, written
memorandum

II. Consideration of Simple Contract

+ A promise can only be enforced by the promisee (a person receives the promise): prove
they have given or promised to receive sth value or incur a detriment (giving up
something or refraining from doing something the promisee is entitled to do) in return.

ð Eg: A promises B clean C’s house for $5,000, B accepts -> Consideration is valid.

(Promise not need come from promisor, can come from the third party)

ð A gratuitous promise is not enforceable (promise to make a gift but not return
sth value back).

+ Need not be adequate: not need to be fair exchange (bad deal)

+ Consideration is executary (hợp lệ) when the promisee does sth in exchange for promisor.

ð Eg: A and B sign a contract of supplying products, at the moment of agreement,

hasn’t performed their promised.
 + Past Consideration: A bought B’s horse, AFTER the purchase, B promise that A house
would be “a sound horse” but in fact, it was ferocious. => B’s promise is unenforceable, B
cannot be sued by A.
+ Consideration need not to be adequate - statements about consideration (c)

EXCEPTIONS that past consideration cannot support simple contracts:

1. Case 1: Applying Pao On v Lau Yiu Long

Requirement:

+ The promisee is worked at promisor’s request

+ The parties must have understood that the act was to be remunerated (trả công bằng)
either by a payment or some other benefit
+ Payment or benefit would have been valid if the promise had been made before.

Example:

15th June: A – the law officer is invited to assist B’s court conference (extra activities)

18th June: The conference is successful -> At the moment, B promises to pay for A a 1,000 bonus.

20th June: After thinking, B changes his minds and not pay a bonus for A.

Is it A’s consideration is past consideration? Can A sue B?

ð It is not past consideration, A can sue B because of applying Pao On v Lau Yiu Long:

+ A worked at B’s request (promisor’s request)

+ Mutual understanding that A would not be worked for nothing (no reward)

+ Promise: value, clear, certain, and sure 100% that would have been enforceable if had been made
before the act in question.

ð Not past consideration in this case.

2. Case 2: Performing an existing public or contractual obligations (nghĩa vụ của công dân) is not
valuable consideration.
 Eg: A is subpoenated – his duties is to give evidence in the court. B promises to pay him in
consideration of giving evidence but B didn’t pay for that, so A sues

ð Not valuable consideration because of giving evidence is his job, not doing so for
extra pay.

Eg: B’s company asked for police to be stationed permanently at the coal mine (gác 24/7 tại mỏ
than) by promising to pay them 2,200. However, after that B’s company refuses to pay with the
reason that this is their public duty – in fact, the police’s job is solely to a mobile patrol (tuần tra
lưu động).

ð The police’s consideration is valid and valuable, B’s company must pay for them to be stationed
permanently.

In Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995) 63 SASR 235, the option to exercise
renewal of the lease Negated the postal rule because the notification was not sent by certified mail
as required.

3. Case 3: Payment of Debt – Applying Foakes v Beer

- The promise by a debtor to pay part of a debt is not sufficient consideration for a
promise by the creditor to forgive the balance of the debt

- Eg: A owes B $1,000, due date 30th Jan, 2020. At that time, A offers B to pay only $800
and B accepts. However, at common law, B could later change his mind and sue for the
balance of the debt.

- In Howe v Teefy (1927) 27 Sr (NSW) 301 where a leased racehorse was retaken three months
into a three-year lease, the fact that assessment was difficult did not prevent a court from
granting damages where the plaintiff had been deprived of something of value.

Modern Approach: The Practical Benefit Test

Case 1: A company want to ensure that purchasers’s flats will be finished on time to avoid a
penalty clause in the main contract, so A company hires B for some work with 20,000 in
subcontract. B performes like A’s requirement but only receiving 16,000 -> B under-quoted for
the job (trả thấp hơn so với ban đầu) and tend to pospone (cannot be done on time). A said that
the company will pay extra 10,000, but only 4,000 given to B before being sued.

è Not apply the common law, follow the practical benefit tests when:

- B enter into the contract to do work for/ supply products for A

 - Before B have completely performed their obligations under the contract, A has reason
to doubt whether B can complete or not

- At the initative of each party: A promises to pay B additional payments in exchange for
B’s promises to complete work on time

ð A obtains B promises (benefits for A: not need to find another worker, avoid to
pay penalty clause for purchasers, sue B for breach of contract – sai phạm luật)

ð A’s promises is not given = fraud on the part of B

The court: the promise to pay the extra money was enforceable

Case 2: A leased a shop in center mall, owned by B to sell clothes. B don’t subsequently allow A to
continue lease in the center place and allow other to lease in the center place. A requires 30%
discount for compensation, B accepts to hold both A and the new one. After disputing, B changes
his minds and ends the contract with A because B thinks that A’s consideration is not sufficient
for the promise to reduce the rental fee. In fact,

- B benefits: retain the tenant

- A benefits: retain another place at the mall with 30% discount.

ð The promise was enforceable

Roffey did not need to find another subcontractor was one of the “practical benefits” received by
Roffey in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 1 All ER 512

Contract Under Seal

- Must be in writing (sufficient to express), signed and witnessed by at least 1 witness is not
a party to the deed (chứng thư), sealed, delivered => Only form = binding forces. On the
opposite site, it must always be supported by consideration to be enforceable is incorrect

ð Delivery: the intention to be legally bound either immediately or subject to the fulfilment of a
condition
A partnership between husband and wife is the types of agreements is there a presumption that
parties intend to be legally bound

- Tom agrees to fix Richie’s car for $1,000. Richie pays a deposit of $200 and Tom guarantees
the job will be completed within two weeks. Before Tom commences the repairs, the car is
stolen from Richie’s locked garage and destroyed by fire. Richie demands the return of his
$200 deposit and Tom refuses to give it to him. Which of the following is not correct? Under
the Australian Consumer Law and Fair Trading Act 2012 (Vic), Tom is entitled to retain the
$200 deposit.

→ Correct: 1. The contract is automatically terminated, 2. Tom is no longer obligated to fix

Richie’s car, and 3. Under the Australian Consumer Law and Fair Trading Act 2012 (Vic), Tom
is entitled to retain the portion of the $200 deposit he spent on parts and other relevant
expenses, if any.

- Differences between Contract Under Seal VS Simple Contract:

Contract Under Seal Simple Contract

Binding a gratuitous promise Not binding a gratuitous

(lời hứa cho không) promise

A party to a contract is Not apply for simple contract

“estopped” (prevented from
denying) the facts expressed in
it.

The period during which a right The period is 6 years in most

of action arising enforced: 15 jurisdictions
years in Victoria and South
Australia and12 years in New
South Wales, Queensland,
Tasmania, Western Australia,
Australian Capital Territory and
the Northern Territory

I. Promissory Estoppel: lời hứa không thể hủy bỏ

 - The unconscionable conduct of the promisor in retreating from the promise made or
assumption created upon which the promisee reasonably relied, caused the detriment to the
promisee.

ð Eg: A rented a house owned by B and his wife, A and B have sexual relationships (B cheats on
his wife) leading to the breakdown of A’s marriage. B promises to share a land owned by B
and his wife for A when getting a property settlement of divorcing but when the A and B’s
relationship ended, B refused to do so and his wife refused to consent to subdivision. => A has
relied on B’s promise to remain the property and maintain the relationship = her detriment =>
Promissory Estoppel

- Promises or oral representations should be included in the written contract specifically,

clearly.

- James, a chef, tells Laura, who is looking to buy his antique lounge chair, that the chair is of
Spanish origin. Three weeks later a written contract is drafted that makes no mention of the
chair’s origin. The statement that the chair is of Spanish origin is most likely to be a mere puff
representation.

- Not an equitable remedy: Exemplary damages.

→ Equitable remedy bao gồm: 1. Injunction, 2. Specific performance, and 3. Restitution.

- The following cases was it held that for a loss in the contemplation of the parties to be
recoverable it must be “a serious possibility”, “a real danger”, “liable to result” or “not unlikely”
to occur? Koufos v Czarnikow Ltd [1969] 1 AC 350.
- Repudiation determined by the court → Objectively.
- Equitable remedies must be awarded in a separate proceeding to common law remedies such
as damages. Correct: Equitable remedies are discretionary, and include specific performance,
and injunctions.

Case Study for Promissory Estoppel:

II. Formalities

1. Contract is required to be in writing

- Most not need writing EXCEPT Some are required to be entirely in writing:

§ Bills of exchange and promissory notes: Bills of Exchange Act 1909 (Cth), ss 8, 89.

§ Cheques: Cheques Act 1986 (Cth), s 10.

§ Assignments of copyright: Copyright Act 1968 (Cth), s 196(3)

§ Contracts of marine insurance: Marine Insurance Act 1909 (Cth), s 28.

 § Assignments and mortgages of life insurance policies: Life Insurance Act 1995 (Cth),
s 200(2)(a).

§ An acknowledgment of a debt barred by the State Limitation of Actions Acts.\

- Statement is not correct: An injunction is sometimes granted to compel a party to do

something they would not have been ordered to do by specific performance→ Correct: 1.
is an order of the court, 2. Restrains a person from doing something, and 3. Is an equitable
remedy.
- The following cases was it held that damages are not recoverable for distress or
disappointment unless the contract promised to provide pleasure, enjoyment or relaxation
or where the distress or disappointment arises from physical injury or physical
inconvenience? Baltic Shipping Co v Dillon (1993) 176 CLR 344.

§ Most forms of consumer credit contracts

+ John tells Cara that the car he has for sale is “as is, where is” and “only needs the oil filter
changed and she’s good to go”. John made this statement based on the fact he has had the
car checked by a mechanic a few weeks ago. Unfortunately, the car required more
significant repairs before it was roadworthy. What remedies are available for Cara under
the common law? Cara has no remedy under the common law (if John’s statement was not
a term in the contract).

+ Whether a contract is a standard form contract, the following is not something that the
court consider: Whether the price payable takes into account the specifics of the party and
the transaction.

2. Contract to be evidenced in writing (at least 1 doc to prove their

existence). If not, enforceable in common law.

- 2 common types:

§ Contracts dealing with an interest in land: However equity can provide an exception
provided the claimant has partly performed the contract

ð Eg: A said that he would build for B a house in the condition that B takes care for
him and his family. B has looked after for him and his family for 23 years until
he died. The court accepts to transfer the title of the property to her because
of her partial performance.
 ð With respect to substantial performance and partial performance, partial
performance is where a party voluntarily accepts less than full performance by
the other party.

- Not correct: Parol evidence is not admissible to evidence whether a document constitutes
a contract or merely a note. ©: 1. Will always be admissible to evidence duress, 2. Is
admissible to evidence a collateral oral agreement, and 3. Will always be admissible to
evidence fraud.
- Exemplary damages might be ordered as a penalty where there has been an intentional
breach.
- The following is not correct: The Australian Consumer does not have any provision for
unconscionable conduct. → Correct: 1. The Australian Consumer Law contains provisions
on unconscionable conduct, 2. The Australian Consumer Law contains provisions on
misrepresentation, and 3. The Australian Consumer Law contains provisions on
misrepresentation in relation to the sale of land.

§ Contracts of guarantee (damages warranties)

● The following statements about damages is not correct: Damages are awarded to
compensate a party for all losses caused by breach of contract.
● Where one party believes the contract refers to the Bonny Lass, a freight ship based out of
Norway, and the other party believes the contract refers to the Bonny Lass, a freight ship
based out of Hong Kong, this is an example of a mutual mistake.
● The following is not one of the three elements of an unfair term under s 24(1) of the
Australian Consumer Law: Where the term is not transparent.

→ Three elements of an unfair term: 1. It would cause a significant imbalance in the parties’
rights and obligations, 2. It is not reasonably necessary to protect the interests of the
disadvantaged party, and 3. It would cause detriment to a party if it were applied.

3. The memorandum required

- Specify the parties’ names

- State subject matter

- Clear consideration

- The memorandum must be signed by the party to be sued

ð Notes: memorandum is not agreement, it is the evidence of agreement

 - The Statement incorrect: The remedies available for breach of an intermediate term
depend on their classification as an intermediate term, not the effect of the particular
breach → Correct: 1. Innominate terms are neither conditions nor warranties, 2.
Intermediate terms are the same as innominate terms, and 3. Intermediate terms are
terms that are capable of being breached in minor and major ways.
- The following correct: When the parties’ obligations under a contract have been discharged
then so has the contract.

CHAPTER 7: Genuine Consent

I. Mistakes

Functions of a contract:

(1) Contract is enforceable if its provide reasonable forms

- To promote certainty that promises will be kept. To allocate the risks that inherent in
many contracts. A party in breach of contract is liable to pay damages for losses occurring
in the usual course of things from the breach.
- A contract may be illegal as performed where only one party performs it in an illegal manner
is correct.

-> Duress must be the only reason for entering into a contract is not accurate. © Duress involves
1. Actual or threatened violence, 2. A party coerced into entering into a contract (against their will),
and 3. Coercion of a person or their immediate family or near relatives.
 (2) Contract provides recovery from losses
- No fault on the part of either party is an element required for the doctrine of frustration to
operate.
- The term “transparency” in unfair contracts means it is expressed in reasonably plain
language that is readily available to the affected party.

(3) Contract provides a source of agreement

- Janine has sold her business to Simone. Simone insists on inserting a clause in the
agreement that Janine cannot open a similar business within 10 km of her former business,
for the next two years. The court will always uphold restraint of trade provisions in contracts
for sale of business is not true. © 1. The clause is a restraint of trade. 2. Where a restraint
of trade is reasonable, the whole parts of the contract will be void. 3. It is impossible to say
whether a court would deem this restraint of trade clause reasonable without further
details.
II. Mistakes of fact
1. Common mistake → unenforceable
- Occurs when both parties make the same mistake
- Common mistake (where the mistake is shared by both parties, is fundamental and
directly affects the basic definition of what the parties are contracting for). The mistake
will render the contract void if it robs it of all substance. (Sai lầm phổ biến (cả hai bên đều
mắc lỗi chung, là sai lầm cơ bản và ảnh hưởng trực tiếp đến định nghĩa cơ bản về nội dung
mà các bên ký kết trong hợp đồng). Sai lầm sẽ khiến hợp đồng vô hiệu nếu nó cướp đi tất
cả nội dung của hợp đồng.

Key determinants

- In determining whether a statement has become a term of the contract, the key test applied
by the courts is contractual intention.
- The specifics of Rose’s situation were not taken into consideration by Melton Apartment
Construction Ltd is not an example of an unfair contract term
- Fourteen days’ notice in writing is provided to debtor is NOT a requirement for an
assignment of a debt or other chose in action under various State statutes. Requirement.
1. The assignment is absolute and not by way of charge, 2. The assignment is in writing, and
3. If not in writing then notice of the assignment is given by notice to the debtor.
 Conclusion on the intention of entering contracts

- It does not apply where it can be shown that the written contract was not intended to be a
complete record of the agreement about the parol evidence rule is true.
- Respect to mistake: © Rectification is a remedy for certain types of mistakes in written
contracts. (i): Mistakes of fact include bilateral mistake, common mistake and mutual
mistake (2) Any mistake by either party will always void a contract / If a party mistakenly
signs a document unaware of the nature of what they are signing : they will be bound
a. Mutual mistake
- Mutual mistake (where the parties are at cross-purposes with one another). If, from the
parties’ words and conduct, only one possible interpretation of what was agreed can be
deduced, the contract will still be valid. Otherwise it will be void. (Sai lầm lẫn nhau (khi các
bên có mục đích trái ngược với nhau). Nếu từ lời nói và hành vi của các bên chỉ có thể suy
ra một cách hiểu duy nhất về những điều đã thỏa thuận thì hợp đồng vẫn có hiệu lực. Nếu
không nó sẽ bị vô hiệu.)
- The Australian Consumer Law is Sch 2 to the Competition and Consumer Act 2010 (Cth) is
the Australian Consumer Law structured into the Competition and Consumer Act 2010 (Cth)
- Rectification is NOT a method of termination. Parol evidence may not be admitted in which
to contradict an unambiguous term.
- An action in restitution cannot be brought where there is no contract between the parties
is not correct. Correct. 1. An action in restitution is often brought where one party has been
unjustly enriched at the expense of the other, 2. can be brought where the contract
between the parties is unenforceable, and 3. can be brought where there has been only
part performance.

Special cases:

a. Jacq and Jack robbed the Commercial Bank. Jacq thinks that Jack was too aggressive with
the tellers and the robbery could have gone very wrong. Jacq is now refusing to give Jack
his share of the takings. The contract involved the commission of a crime and is therefore
illegal and unenforceable is correct.

b. Janey takes her fur stole to the dry cleaner. When she returns to collect it, there is a black
mark in the shape of an iron in the middle of her stole and it is ruined. The dry cleaner tells
Janey that he is not liable for the damage to her fur stole as there was an exemption clause
in their agreement. If the exemption clause was merely contained within a notice on the
wall, the dry cleaner will be liable for the damage is not correct. True: 1. If the exemption
clause was on the dry cleaning docket Janey was given and she was told : “don’t worry
 about this, it’s just the docket you have to give us when you come to collect your stole”, the
dry cleaner will not be able to rely on the exemption clause, 2. In order for the exemption
clause to be effective where it was not in a signed document, it had to have been brought
to Janey’s attention, and 3. If the exemption clause was on the dry cleaning docket Janey
was given rather than a formal written contract, the onus will be on the dry cleaner to prove
that Janey was aware it contained conditions that would modify the agreement

c. Unilateral mistake as to a fundamental term → enforceable

- Unilateral mistake (where one party is mistaken and the other knows or ought to have
known of the mistake). If the mistake relates to the fundamental nature of the offer the
contract can be voided. (Lỗi đơn phương (khi một bên mắc lỗi và bên kia biết hoặc lẽ ra
phải biết về lỗi đó). Nếu lỗi liên quan đến bản chất cơ bản của đề nghị, hợp đồng có thể bị
vô hiệu)

- The remedy of restitution is based on the concept of unjust enrichment where the
defendant is unjustly enriched at the plaintiff’s expense.

Injured feelings and illegal contract

- Injured feelings/ disappointment are not usually compensated for with payment of
damages
- Chris maintains that a document that he and Kathy have signed is a binding contract. Kathy
maintains that it is merely a receipt and does not include all the terms of their agreement.
Parol evidence may be admissible is correct

III. Mistakes of law

A mistake of law concerns the law as the parties understood it to be at the date of the contract
1. Remedy of rectification (biện pháp khắc phục)
- Where the parties have agreed and the contract has been committed to writing but there
is an error in the writing due to a common mistake, equity will order the written contract
to be fixed (rewritten) to conform with the parties' purpose. To be allowed contract
rectification, persuasive proof must be shown that the written contract does not contain
the parties' final intention, and the missing element must be capable of providing such
proof in clear and convincing terms. (khi mà 2 bên đã đồng ý và hợp động đã được viết;
tuy nhiên thì có 1 lỗi trong hợp đồng được phát hiện. Do tính công bằng, nên hợp đồng sẽ
được yêu cầu viết lại, phải đưa ra được bằng chứng thuyết phục rằng hợp đồng không
bao gồm những cái ý định của cả 2 bên)
 - In the case of restraint of trade with respect to employment, the court does not easily allow
parties to contract out of their means of employment.
- The general principle with respect to damages for breach of contract is damages are to
place the innocent party in the same position they would have been in if the contract had
been performed.

2. Cases when remedies are invalid

- Unequal bargaining power of itself is enough to constitute a special disadvantage is not
correct with respect to the prohibition of unconscionable conduct within the meaning of
the unwritten law. True: 1. Unwritten law includes equity, 2. There is no unconscionable
conduct where both parties have made the same mistake in good faith, and 3. There must
be a special disadvantage and exploitation of that disadvantage.
- Damages must not be too remote from a breach is correct.

-> James, a chef, tells Laura, who is looking to buy his antique lounge chair, that the chair is of
Spanish origin. Three weeks later a written contract is drafted that makes no mention of the chair’s
origin. The statement that the chair is of Spanish origin is most likely to be a/an mere puff
representation.

- Pyramid selling unfair practice involves participation in a trading scheme where persons at
the top receive most of the benefits.

=> A signature on a contract containing an exemption clause: guarantees that an exemption clause
will be effective is not true. ©: 1. Will not guarantee the effectiveness of the clause where the
doctrine of non est factum applies, 2. Incorporates the exemption clause into the contract, and 3.
Will be effective even if one party did not read the contract.

3. Notes of consideration

- The consideration must be of higher value than the main contract is not a requirement of a
valid collateral contract . True: 1. The statement must be promissory, 2. The parties must
have intended the promise to be binding, and 3. The promise must be supported by
consideration.
- In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528, only the
ordinary loss related to the delay in installation of the boiler was recoverable because the
defendant was not made aware that additional lucrative contracts had been negotiated.
- The definition of “consumer” is limited by Recently increased to $100,000. Statute and
common law are sources of illegality. When a contract is made orally, the question of what
the express terms are is a question of fact.
- Where there is a debt in connection with the possible of goods and the creditor, Tells the
debtor, among repeated demands for payment give the debtor a discount for early
payment would not constitute the unfair practice of harassment or coercion under the
Australian Consumer Law. Could constitute the unfair practice of harassment or coercion
under the Australian Consumer Law: 1. Consciously calculates to intimidate the debtor with
the content of her demands 2. Makes demands constantly in order to exhaust the debtor,
and 3. Chooses particularly threatening demands in order to demoralise the debtor.

Case study:

- Smithy Builders have a contract with Big Bank Pty Ltd which contains the following clause:
“Where Smithy Builders fails to complete the contract by 7 December, it will pay a sum of
$300,000 in full and final satisfaction of its liability.” Smithy Builders fails to complete by 7
December. If Smithy Builders wishes to avoid paying the sum of $300,000, that clause is a
penalty clause (to punish the builders) must it prove.

- Sharma was selling his secondhand vacuum cleaner to Natasha and told Natasha that it
could “do all the rooms in the house ten times over without the filter needing to be
changed”. Natasha spent a few weeks shopping for other vacuum cleaners but eventually
returned and purchased Sharma’s, telling Sharma it was the cheapest she had seen in two
weeks and she liked the colour. When Natasha took it home she soon discovered that the
vacuum cleaner could only do one room at a time and then the filter would need changing.
Natasha cannot rely on Sharma’s statement for breach of contract because Natasha did not
attach any importance to the statement when it was made.

- Where the contract would require constant supervision by the court is not a circumstance
where the court would award specific performance. True: 1. Mitigation, 2. Contributory
negligence, and 3. Remoteness.

Non-est factum

- In Baltic Shipping Co v Dillion (1993) 176 CLR 344 case did the court recognise that damages
for disappointment and distress could be available subject to certain limitations
 - That the goods are acceptably fit for the consumer’s purpose is not an element required for
acceptable quality of goods . True: 1. Free from defects, 2. Durable, and 3. Safe.
- Contracts to oust the jurisdiction of the courts is not a type of contract illegal at common
law on the grounds of public policy. True: 1. Contracts to commit a tort, 2. Contracts
prejudicial to the public safety, and 3. Champertous contracts.

=> Non est factum means it is not [my] deed. No fault on the part of either party is an element
required for the doctrine of frustration to operate.

IV. Misrepresentation
1. Fraudulent misrepresentation
- Fraud happens "where it is demonstrated that a false representation was made (1)
intentionally, (2) without belief in its truth, or (3) recklessly, carelessly whether true or
false”

- James, a chef, tells Laura, who is looking to buy his antique lounge chair, that the chair is
of Spanish origin. Three weeks later a written contract is drafted that makes no mention
of the chair’s origin. The statement that the chair is of Spanish origin is most likely to be a
mere puff representation.

a. A fraud case
- Each factor must be present in order for there to be evidence for a fraud case.
+ Statement of fact: To be a misrepresentation, the statement must be a
representation of a past or present fact. However, they may be characterized as
misrepresentations if the representor does not, in fact, hold that opinion or have
that intention or does not have reasonable grounds for making the prediction.
+ Falsity - a necessary ingredient of liability: It is a question of fact in each case
whether the representation is false or not.
+ Known to be false, or without belief in its truth, or recklessly careless whether it be
true or false
+ Intended to be relied upon:
+ In fact relied upon
+ Resulting in damage
- Sandy is selling her horse, Flossy. Miranda is interested in buying Flossy. Sandy tells Miranda
that Flossy is the best little racehorse in Australia and has all the registrations, licenses and
permits required to race in the current season but that Miranda should probably get this
checked herself. These two statements are mere puff and representation.
- Where a contract has not been completed within the specified time, the innocent party will
be entitled to terminate the contract upon giving notice that time is of the essence.
Exemption and duress

- An exemption clause is a term that excludes or limits the liability of one or more parties.
- A threat to contact police if stolen money were not repaid to the employer is unlikely to
constitute duress. Likely: 1. A threat to destroy the house of a party’s sister, 2. A physical
beating to a party until they signed a contract that they would have signed without the
beating, and 3. Physical confinement of an otherwise unharmed party to pressure them to
enter into a contract that would be for their benefit.
- A court views substantial performance of a contract: The contract is complete, but the
incomplete portion may be allowed for as a reduction of the full contract price.

b. A negligence case
- Where a contract is made in writing, the express terms of that contract are generally to be
found in the writing.
- Where the supplier makes a commercial decision to breach the contract knowing that the
customer will seek a legal remedy for the breach is least likely to contribute to a finding of
unconscionable conduct in connection with goods or services. Likely: 1. Where conditions
imposed on a customer were not necessary for the protection of the supplier’s interests, 2.
Where the supplier acted in bad faith, and 3. Where unfair tactics were used against the
customer.

- Repudiation is the same as termination; the contract is at an end s incorrect

- A breach of a warranty entitles the innocent party to be compensated with damages and
termination of the contract is not correct. ©: 1. A condition is a major term of the contract;
a breach renders the contract substantially different from the agreed term, 2. A breach of
a condition entitles the innocent party to be compensated with damages, and 3. A warranty
is a minor term of the contract; a breach renders the contract insubstantially different from
the agreed term.
- With respect to legality of object, illegal objectives will not affect a contract provided both
parties have agreed to it is not correct.

- Chris and Tama buy a noodle bar from Udon4U Pty Ltd. In the course of negotiations,
Udon4U Pty Ltd’s agent, Nadia, misrepresents the turnover of the noodle bar, stating an
 amount that is double the actually turnover. Nadia herself received this information on
turnover from Geoff, a director of Udon4U Pty Ltd. In making the misrepresentation, Nadia
likely contravened as she merely passed on the information with no intention to procure a
contravention, she probably will not be personally liable.

c. Six elements for a claim of fraudulent misrepresentation.

- Is not one of the six elements required for a claim of fraudulent misrepresentation to
succeed: The representation must be in writing (cannot be verbal only). 3 of the 6
elements are required for a claim of fraudulent misrepresentation to succeed: 1. The
representation must be false, 2. the representation must have been acted upon by the
other party, and 3. the representation must be one of fact.

- Unliquidated damages are damages where the court is to determine the amount.

1. Remedies for fraudulent misrepresentation

- A person who has been misled in entering into a contract by fraudulent misrepresentation
may refuse to be bound by the contract (or successfully oppose any attempts to enforce
the contract against them) or confirm the deal and seek damages for any losses incurred.
(viết dễ hiểu lại từ ý trong sách)

I. Innocent misrepresentation
- An innocent misrepresentation occurs when a person makes an untrue statement of fact
which was intended to, and did in fact, induce the other party to enter into the contract
but without any intention on the part of the representor to deceive

2. Remedies for innocent misrepresentation

This equitable remedy is available in the case of both fraudulent and innocent misrepresentation
- The right to withdraw is forfeited if the party entitled to cancel confirms the contract after
discovering the untruth of the representation. A contract is affirmed when the
representee expresses their desire to proceed with the contract after full awareness of
the facts, or does some act from which such an intention may be inferred.
- The right is lost if third parties acting in good faith acquire rights in the contract's subject
matter before the right to rescind is exercised.
- The right to rescind is lost if it is no longer possible to restore the parties significantly to
their pre-contractual position due to changes in the subject matter (Quyền hủy bỏ bị mất
 nếu vì những thay đổi đã xảy ra với đối tượng không còn có thể khôi phục các bên về cơ
bản vị trí trước hợp đồng của họ)

-> With respect to s 18 of the Australian Consumer Law, silence is not relevant in considering the
contravention is not correct.

C. Remedies for negligent misrepresentation

- A divisible contract is one that provides expressly or impliedly that performance is due after
the other party has performed stages of the contract.
- Disqualification from managing corporations for a period of time for a breach of s 18 is not
an enforcement measure under the Australian Consumer Law. An enforcement measure
under the Australian Consumer Law: 1. An order of the court requiring a supplier to
establish a training regime for its employees, 2. A one-year probation order of the court,
and 3. An order directing that a supplier comply with the terms of an undertaking they have
given as well as pay compensation for the breach.
- Where the event should have been foreseen would a plea of frustration not succeed.
Succeed: 1. Where no specific provision was made for the event in the contract, 2. Where
performance is still possible but would be pointless, and 3. Where performance has become
fundamentally different from what was contemplated by the parties.
- Ben planned the perfect surprise birthday party for his mother. He hired a hall, he hired a
violinist and he organised catering. Two weeks prior to the event, the violinist called to
cancel. Ben was so upset at the loss of what he thought would be the highlight of the
evening that he called the whole event off. Ben lost both the deposit on the hall and the
deposit for the catering. Ben has a duty to mitigate his losses is correct.
- Jaz is approached by her neighbour to join the sales team of Thames Beauty Products.
Thames sells its products door-to-door through agents and is a close-knit family type of
company. Agents that introduce other agents to “the family” are rewarded with a finders’
fee. It is only $500 to join the Thames family, and Jaz only has to spend $400 on products
in her first month constitutes pyramid selling.
- The Australian Consumer Law refers to a person is the main difference between the
misleading or deceptive conduct provisions in the Trade Practices Act 1974 (Cth) and in the
Australian Consumer Law.
- The plaintiff in an action under s18 of the Australian Consumer Law is required to prove the
conduct is misleading or deceptive or likely to mislead or deceive.

D. Remedies for damages

- Guarantee as to title guarantees applies to a sale by auction.

- Nominal damages awarded when a legal right has been infringed but there is no actual loss.
 - A unilateral mistake does not include mistake as to capacity of the parties. Include: 1.
Mistake as to the nature of the document signed, 2. Mistake as to the identity of the parties,
and 3. Mistake as to the terms of the contract.

-> A consumer contract with respect to unfair contract terms does not involve wholly for personal,
domestic or household use or resupply. Involve: 1. The supply of goods or services, 2. The sale of
land, and 3. An individual who acquires goods or services or land.

- Where a party to a delivery of goods contract becomes bankrupt is a way that a contract
may be terminated by operation of law.

II. Negligent misrepresentation

III. Duress
● Economic duress
- Not true: Economic duress was found in North Ocean Shipping Co Ltd v Hyundai
Construction Co Ltd [1979] 1 QB 705 and the threatened party was able to recover the
payments made under duress. ©: 1. is a threat to the innocent party’s economic interests,
2. permits the threatened party to avoid the contract, and 3. needs to be distinguished
from a legitimate level of commercial pressure - an example of an actionable level of
pressure is a threat to break a contract without any legal justification in order to extract
money from an innocent party.

● Alternative actions under the Australian Consumer Law

● Undue influence differs from duress in that with undue influence, no unlawful act is
required

● If one party has completed its obligations under the contract, and the other has not: The
contract cannot be terminated by simple agreement without consideration

● In ACCC v Turi Foods Pty Ltd [2012] FCA 19: The statement that the chickens were “free to
roam” was misleading as there were too many chickens pr square metre for the chickens
to easily move.

=> A person use an official position they hold for their financial advantage: No because if a contract
is involved, this could lead to the promoting of corruption in public life.

IV. Undue influence

1. Effect of undue influence
 Not one of the four ways a statute may render a contract illegal set out in Yango Pastoral
Co v First Chicago Australia Ltd (1978) 139 CLR 410: The contract may set out an
unreasonable restraint. True: The contract may require an action that statute forbids, may
be performed in a prohibited manner, and may have been made to effect an unlawful
purpose.

V. Unconscionable conduct
1. Guaranteed by married women of their husband’s debts
2. Under the Australian Consumer Law
3. Under the National Credit Code

CHAPTER 9: CONTENTS AND INTERPRETATION OF CONTRACT

I. Introduction:
The contents of the contract:
II. Express terms:
1. Incorporation into the contract:

Terms that have been agreed upon by parties:

● Written agreement and signed → easier to establish due to writing and signatures: Parol
evidence rule limits contrary verbal evidence.

● Partly verbal and written agreement → courts determine the intention and meaning of
what was stated
● Verbal only → establishing an express term is more difficult. The burden on the party
relying on a term to produce sufficient evidence of what was stated

2. Parol evidence rule in relation to written contracts:

● Where the contract is entirely in writing, the parol evidence rule applies
● The parol evidence rule was originally created by the courts to protect weaker or
vulnerable parties from (unfounded) allegations by stronger parties that the parties or
one of them had made (oral) promises that altered the written agreement (in favour of
the stronger party) which the stronger party now wished to enforce.
➢ Parol evidence of surrounding circumstances is admissible to assist in the interpretation of
the contract if the language of the written contract is ambiguous or susceptible of more
than one meaning. On the other hand, if the contractual terms are clear, evidence of
surrounding circumstances is not admitted.
➢ Parol evidence is admissible to prove the written contract is illegal, invalid or
unenforceable because of misrepresentation, undue influence, duress or unconscionable
conduct.
➢ Parol evidence is admissible to establish that one or more of the terms has a trade or
technical meaning or usage
➢ Parol evidence is admissible to prove that the oral statement (that is being contested) is,
in fact, a collateral warranty. In other words, the parol evidence rule does not apply
because the written contract is not the entire agreement.
➢ Parol evidence may be given of the subject matter of the contract or the identity of the
parties to the contract.
➢ Parol evidence may not be admitted to contradict an unambiguous term.
 ➢ Cathy and Mel entered into a contract where Cathy was to steam clean seven rooms in
Mel’s house at $200 per room. After cleaning three rooms, Cathy abandoned the job for a
more valuable contract. The following is true: If the contract is divisible, Cathy is entitled to
payment for the work she has done.

➢ Chang wants the court to imply an engineering custom into a term of a contract to which
he is a party. The other party has no knowledge of this custom. It is not contrary to any of
the express terms of the contract. The court may imply the term.

3. The parol evidence rule and entire agreement clauses:

● An entire agreement clause is commonly included in the terms of a standard form
contract.
● The purposes of the entire agreement clause:
→ To ensure that the document in which it appears constitutes the whole agreement
between the parties.

❖ The following is not a restraint of trade? An agreement by which Steve agrees to repay his
daughter’s loan debt in return for the person who advanced the loan to his daughter
agreeing not to report Steve’s daughter to the police for fraud.

⇒ A restraint of trade: 1. A price maintenance agreement, 2. A contract restraining Laura

from working as a welder within Ballarat for two years after her termination with Welders
R Us, and 3. An agreement between John and Liz that John will not open a brew shop within
2km of the brew shop he just sold to Liz.

4. Identifying the contents of a contract - Distinguish terms and representations:

Courts look (objectively) at:
● Time that elapsed from statement to formation of contract
● Objective importance in the context of the contract
● Oral statement followed by a written contract is less likely to be a term
● Relative knowledge and expertise of the parties
● In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR
337, the High Court found that the contract was frustrated.

● James is going through a difficult time and does not feel he can confide in anyone.
Eventually he confides in the priest of his church and asks for support. The priest forcefully
tells James to turn over all of his money to the church or he will be struck down by
lightening. The priest does not believe that James will be struck down. James makes the
 payments. The following is most likely legal grounds for James to avoid the transaction:
Undue influence.

5. Identifying the contents of a contract - Distinguish representations and collateral

contracts:
Three criteria must be met when doing a collateral contract:
(a) the statement must be promissory (ie intended to be part of the contract)
(b) it must not be inconsistent with the main contract
(c) consideration must be provided by the promisee (usually the consideration provided by
the promisee is entering into the main contract)

For example: Fraser crashes his car with his friend Angus as a passenger. Angus is injured.
Angus was not wearing a seatbelt. Which of the following is not correct: Damages cannot
be apportioned for breach of contractual duty of care where there is contributory
negligence. Correct: 1. Liability would likely be apportioned between Fraser and Angus, 2.
Damages awarded to Angus, if any, would be reduced by his contributory negligence, and
3. Angus’ contributory negligence relates only to his own safety, not to that of others.

⇒ The Australian Consumer Law definition of “supply” does not include gift. →include: 1.
Re-supply, 2. Exchange, and 3. Lease.

6. Identifying the contents of a contract - Distinguish conditions, warranties, and

innominate terms:

Conditions Warranty Innominate terms

● An essential term that ● Less important term of

goes to the root of the the contract
contract ● Breach entitles the
● Breach entitles the innocent party to
innocent party to damages only: no right
rescind and/or claim to terminate
damages ● Courts must decide
● Breach of a condition whether the term is a
is considered a serious condition or warranty
breach and allows for
the innocent party a
choice
 ● it was said in Re Hall & ● the following is most ● the following is not
Barker [1878] 9 Ch D correct? If an amount true with respect to
538, “if a shoemaker of $5,000 is specified in misleading or
agrees to make a pair a written contract as deceptive conduct? A
of shoes, he cannot the agreed genuine person acting as a
offer you one shoe and pre-estimate of “mere conduit” in
ask you to pay one half damages in the event passing on
the price”, this is the contract is representations may
referring to the court’s breached then this is also be liable. → TRUE:
tendency to regard commonly referred to 1. The plaitiff has to
contracts as entire. as liquidated damages. prove that conduct was
misleading or decetive,
2. The plaitiff has to
prove the causal link
between the conduct
and the loss, and 3. A
corporation is not
liable where it is clear
that the corporation is
not the source of the
information.

- The following is not a ● Coulls v Bagot’s - If the court held the

remedy for Executor & Trustee Co sum the parties
unconscionable Ltd (1967) 119 CLR 460; inserted into their
conduct? A criminal Beswick v Beswick contract ($100,000) to
prosecution. → [1968] AC 58 and be a penalty, and the
Correct: A remedy for Tweddle v Atkinson actual loss determined
unconscionable (1861) 1 B & S 393 all by a court was
conduct: 1. An relate to the doctrine $30,000, the plaintiff
injunction, 2. Ordinary of privity. would be able to
damages, and 3. A recover $30,000 only.
pecuniary penalty.

If a mere puff = no remedy in contract law

If representation is broken = rescission
If a term is broken = breach of contract

III. Interpretation of the terms of the contract:

To determine what the words of the contract actually mean, must consider:
➢ the courts seek to determine the objective intention of the parties based on the words
used and the surrounding circumstances. Evidence of actual intentions and expectations is
inadmissible.
➢ the approach to the interpretation of a clause is to be determined by giving the words
used their “natural and ordinary meaning”,4 giving due weight to the context in which the
clause appears including the nature and object of the contract as a whole.
➢ where there is ambiguity or more than one possible reasonable meaning, the court will
opt for the meaning that makes the most commercial sense (on the reasonable
assumption that the parties would not have intended an uncommercial result)
➢ where the wording is ambiguous the courts consider the application of the contra
proferentem rule – if there is doubt about the meaning or scope of a term (particularly an
exclusion clause) the ambiguity should be resolved against the party seeking to rely on it.

➢ In Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, the court
recognised which of the following terms which later became part of Australian law in
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115?
Innominate term

➢ For example: Ella contracted Anasaki to build a balcony for her house to certain
specifications. When Anasaki had finished, Ella was shocked to see that the balcony was
much bigger than she had specified. Ella refused to pay Anasaki. The following is incorrect:
It would be unjust for Ella to have to pay any money for a balcony that was not built to her
specifications under the contract.
IV. Interpretation of exclusion clauses
● The basic principle of interpretation:
The interpretation of an exclusion clause is to be determined according to its natural and
ordinary meaning, read in the light of the contract as a whole, and construing the clause
contra proferentem in case of ambiguity.

● Terms may not be implied into a contract by representations

● The following constitutes referral selling: Jaz purchases a painting through a new art gallery
that has just opened in town. The price is high and Jaz is at first uncertain about the expense,
but the art dealer promises Jaz a commission on sales to any of Jaz’s friends who she sends
along to the gallery. Jaz has a lot of art collector friends so is sure that she will receive some
commission from the gallery in the near future.

V. Online contracting
2 common types of online agreements:
● Click-wrap agreements:
- Present the terms of contract that are offered (always by the website provider/ a
supplier of goods, services or information) and ask the user to indicate that they
acknowledge and agree to the website provider’s terms by clicking an online
“button”.
- Clicking on the acceptance button operates as a signature and indicates that the
person accepts the terms, regardless of whether or not they have read or
understood them.
● Browse-wrap agreements:
 - Are similar to click-wrap but the terms are on another webpage or website, and
the user is able to access those terms through visiting, or linking to that other page
or site.
- Are more difficult to enforce because there are questions about whether or not
the user has agreed to the terms, and whether the terms are incorporated into the
contract.
- There’s no evidence that the website user is aware of the terms since the terms
are located on another site.

- Matt sells his car to Tabitha, who purchases it on the condition that she can continue
to: keep it in his garage at no cost for the next six months. Tabitha pays in full. Two
months later, Matt tells Tabitha she will have to remove her car from his garage as
he has bought a: new car and wants to keep it in the garage. The following
statements is correct: If Tabitha promises to remove her car, Matt will not be able
to enforce the promise: unless the promise is supported by consideration or made
under seal.

VI. Implied terms

- The purpose of implied terms is often to complement or supplement an agreement in
order
+ to make the agreement “work” more effectively
+ to “fill a gap” in the contract
+ to achieve fairness between the parties
+ to relieve hardship

+ Case did the court find that passing off had been engaged in and the misleading and
deceptive conduct provisions had been contravened: Apand Pty Ltd v The Kettle Chip
Co Pty Ltd (1994) 52 FCR 474.

+ Jong complains that the barbecue he bought is not fit for purpose because the metal
sides melted the first time he cooked with it. The manufacturer maintains that Jong
should not have used the barbecue for slow cooking and that it never represented
that the barbecue would be fit for the purpose of slow cooking. The circumstances
in which the guarantee as to fitness for purpose would apply: Where Jong made
known to the supplier that he was going to use the barbecue for slow cooking meals.

+ It is important to distinguish between representations and terms because damages

can only be awarded for fraudulent or negligent misrepresentation.

+ the following is not correct? Restitution was not awarded in the case of Pavey &
Matthews Pty Ltd v Paul (1987) 162 CLR 221 as the contract was not in writing as
 required by statute and therefore not enforceable. correct: 1. May be awarded
where there is less than substantial performance, 2. Is said to be based on unjust
enrichment, and 3. Is subject to a number of defences, such as estoppel.
- Terms may also be implied into contract by the court, by custom or by statute.
- Implied by statute: term is mandatory and cannot be excluded by agreement.
- Implied by custom or by trade usage: terms can be excluded by an express provision in the
agreement
1. Terms implied by the court: subdivided into 3 categories
● Terms implied to give “business efficacy” (=power to produce intended
results) to the contract. The terms must meet these criteria:
(a) Reasonable and equitable
(b) Necessary to give business efficacy to the contract
(c) Obvious
(d) Capable of clear expression
(e) Not contradict any express term of the contract
● Terms implied in specific kinds of contract (e.g. In contract for the hire of
good, contract for skill and labor and the supply of materials)
● The court likely to order specific performance rather than damages in the
circumstance: The contract involved the sale of an expensive waterfront
mansion on Sydney Harbour.
● Terms to cooperate and act in good faith
● Australian case is most similar to H Parsons (Livestock) Ltd v Uttley Ingham
& Co Ltd [1978] QB 791 in relation to applying foreseeability to limit claims
for damages? Day v O’Leary (1992) 57 SASR 206

2. Terms implied by custom or trade usage

3. Terms implied by statute law (e.g. Statutory guarantees under Australian
Consumer Law, employment, residential tenancy and sale of land contracts)
4. Not correct with respect to the Australian Consumer Law: Owing to the
Commonwealth’s limited lawmaking powers under s51 of the Constitution, it
applies only to corporations. True: It is contained within Schedule 2 to the
Competition and Consumer Act 2010 (Cth), it applies to conduct engaged in
outside of Australia, and the Australian Consumer Law is applied in each State and
Territory
REVISION:

❖ Considering whether a contract is a standard form contract, the court does not have to
consider whether one party’s vicarious liability for its agents is limited.
 → Consider: 1. The bargaining power of the parties as unequal bargaining power does not
constitute a special disadvantage, 2. Whether both parties had the opportunity to negotiate
the terms of the contract, and 3. Whether the terms of the contract take into account the
specifics of the particular transaction.

❖ A party repudiates a contract when they are no longer able or are unwilling to perform their
obligations

❖ CASE STUDY:

❖ Chung is looking to purchase a carwash business from Terry. Terry tells Chung that she
serves 100-150 cars per day and that she has just concluded an agreement to service the
fleet of cars of a local business. In reality, Terry has only served around 15 cars per day since
her customer service received a bad review in the local newspaper and a competing
carwash business opened one street away. Terry intends for Chung to buy her business
based on what she has stated.

-> This is an example of fraudulent misrepresentation

Compare between valid and invalid contractual determinants

Valid contract Invalid contract

❖ Case was it that held that where an ❖ Marnie loans Bill $1000 so that Bill
exemption clause is in a non- can pay a local politician to ensure
contractual document, the clause his tender will be the winning
must be brought to the other tender. The contract between
party’s attention for it to be Marnie and Bill is an illegal contract.
effective: Causer v Browne [1952]
VLR 1. ❖ Not a valid assignment of a contract:
A contract for personal services.
❖ A liquidated damages clause in a
written contract: Sets out the
amount agreed payable to the
innocent party if there is a breach of
contract
 ❖ When the parties’ obligations under
the contract have been discharged,
then so has the contract is correct.

⇒ The following sections of the Australian Consumer Law are relevant to

misrepresentation? Sections 18 and 29.

CHAPTER 10: OPERATION OF THE CONTRACT

I. Privity of contract:
1. General rules:
● General Rule is the only the parties to a contract:
+ Acquire rights under it; and
+ Incur liabilities under it.

**Privity of contract = Privacy of a contract?

With some limited exceptions it is generally only the PARTIES to a contract who obtain any legal
rights and responsibilities
This means that a stranger (a person outside the contract) is usually not entitled to bring legal
action where the contract has been broken

2. The agency and trust “exceptions” to the doctrine of privity:

3. The insurance exception to the doctrine of privity:

4. Property law exception to the doctrine of privity: land covenants
● Benefits and liabilities attached to the land by way of restrictive covenants “run with the
land” and may benefit or bind successors in title to that land.

II. Liability for inducing a breach of contract:

Tort of inducing a breach of a contract: (cố gây ra vi phạm hợp đồng)
A person is liable in tort (not contract) if they induce another to commit a breach of
existing contractual obligations.
 ● Essential elements:
+ Must be knowingly and with intent
+ “Wilful blindness” or “reckless indifference” will satisfy this

III. Assignment of contracts:

❖ Assignment: the act by which one party to a contract substitutes another person for
themselves as a party to that contract either for some or all the purposes of the contract.
❖ Assignor: the one who assigns or transfers to another
❖ Assignee: the one to whom an assignment is made

1. Assignment of liabilities
- Transferor needs consent (sự chấp thuận) of the other party and transferee to transfer
their liability.

2. Assignment of rights
- Debts and other choses in action are assignable by virtue of various state statute laws.

3. Assignments by statute
- An assignee of debt or other legal chose in action may take action against debtor in the
assignee’s name provided that:
(a) Assignment is absolute and not merely by way of charge
( a charge is an encumbrance on the asset => The assignor/ creditor is still the owner of the debt)
(b) Assignment is in writing, or
(c) Express notice of the assignment is given in writing to debtor
- Notice is required
- In order for notice of an assignment to be effective, it is necessary that the debtor actually
receives such notice.

4. Assignments in equity
- An example of legal chose in action:
➢ Right to recover debt due under contract
- An example of an equitable chose in action:
➢ Interest in a trust fund, legacy
- Equitable assignment of legal or equitable chose in action may be effective without
writing and with no particular form of words being necessary
- Notice is not required
 - Assignee takes “subject to equities”
E.g. Assignees can only receive such title as assignor is able to give (no better position)

5. Assignment by operation of law

- Common examples: Death, bankruptcy
- Contracts of personal service are not assignable (because a contract with a person having
special qualifications cannot be performed by another person as effectively as the original
party)
e.g. A contract between publisher and author

**Compare assignment by operation of law and assignments in equity:

operation of law assignments in equity

- A party repudiates contract when the

- The following is not one of the special
party is able but unwilling to perform
relationships in which the onus of
their obligations under it.
proving that undue influence was not
- The parol evidence rule performs much
employed shifts to the denying Party:
the same function as a merger clause.
Parent and child where the child is
living independently.→special
relationships: 1. Solicitor and client, 2.
Trustee and beneficiary, and 3. Doctor
and patient.

- The following is not correct with respect - Where a loan contract allows for
to termination by subsequent termination by the loan provider in the
agreement: A subsequent simple event of default by the borrower, this is
contract can cancel a contract where an express power to terminate. (i):
one party has completed their + An implied power to terminate
obligations and the other has not. → + A condition precedent
Correct: 1. A subsequent agreement + A release
may cancel an original contract, 2. A - The following is not correct with respect
subsequent agreement must be valid to to misleading conduct under the
rescind an earlier contract, and 3. A Australian Consumer Law as compared
subsequent simple contract can cancel with the common law of
misrepresentation: The person does
not necessarily have to engage in the
 a contract where there is still something conduct. → Correct: 1. An opinion will
to be done by each party. not contravene s 18 unless the person
did not genuinely hold that opinion, 2.
Silence may contravene section 18, and
3. Mere puffs will not contravene s 18.

CHAPTER 11: TERMINATION AND BREACH OF A CONTRACT

I. Termination by performance:

1. Exact performance required:

● WHEN? → The most desirable (and, fortunately, the most common) form of termination
of a contract is when the parties perform their obligations as promised.
● WHAT? → As a general rule, precise or exact performance is what is required before a
contract is terminated by performance

2. Where the contract is entire or divisible:

● “Divisible contract” - express or implied performance due after other party has performed
in stages)
- Where the parties agree that the performance of the contract is to proceed in
stages (with payment due at the completion of each stage) the contract is said to
be a “divisible” contract allowing a party in breach to enforce the payment for any
stages that have been performed.

● “Entire contract” - exact performance required

- If there is no such agreement – expressly or by implication – performance of the
“entire” contract is required before the contract price is payable.

3. Where there has been substantial performance:

“Substantial perform” rule - what is substantial is a question of fact
- Contracting parties who “substantially” perform their obligations will be able to
claim the full contract price, subject to the right of the innocent party to deduct
the amount required for exact performance from the full contract price

4. Where the innocent party has accepted partial performance:

● A person who voluntarily accepts a benefit under contract must pay on a quantum meruit
(“the deserved amount”) rather than the full contract price.
● ⇒ If the innocent party could retain the benefit, without compensating the party in
breach, the innocent party would be “unjustly enriched”
● **The “deserved amount” is what the court determines is the fair and reasonable value of
the work performed.
● Compensatory damages are also known as actual/ordinary damages.

**DIFERRENCE BETWEEN PARTIAL PERFORMANCE AND TIME FOR PERFORMANCE:

PARTIAL PERFORMANCE TIME FOR PERFORMANCE

● Innocent party can accept partial ● If no time is specified in the

performance = effectively, this is a contract, the law requires within a
new contract reasonable time in the
● Quantum meruit may be claimed circumstances
● Choice available ● Where performance late =
● The following statement is not damages unless time is of the
correct: A breach of a warranty essence (in which case contract
entitles the innocent party to be may be terminated)
 compensated with damages and ● The following is not correct? A
termination of the contract. → criminal penalty can be sought for a
Correct: 1. A condition is a major breach of s 18. → Correct: 1. The
term of the contract; a breach ACCC can seek both criminal and
renders the contract substantially pecuniary penalties for breaches of
different from the agreed term, 2. A the unfair practices provisions of
breach of a condition entitles the the Australian Consumer Law, 2.
innocent party to be compensated The new maximum penalties may
with damages, and 3. A warranty is vary depending on turnover of a
a minor term of the contract; a corporation, and 3. Injunctions can
breach renders the contract be sought as orders
substantially different from the
agreed term.

II. Termination by agreement:

Parties may agree to terminate the contract in various ways:
1. Original contract:
● This may contain terms for it to be terminated on the occurrence of an event (eg. lease or
loan agreement)
● If the term is a condition precedent there is NO contract formed
● If the term is a condition subsequent the formed contract does not have to be performed

2. Subsequent agreement:
- Parties may agree to end the contract after it was made or negotiate a substitute
agreement to replace it. This can be done by:
● Mutual termination
● Release
● Accord and satisfaction
● Substituted agreement

- A subsequent agreement may either:

(a) Cancel the original contract; or
(b) Vary the terms of the original contract.
- Condition subsequent (thời gian chấm dứt hợp đồng): A condition subsequent is a
condition contained in a contract the occurrence of which will terminate the contract. The
 parties’ obligation to perform the contract is immediately binding but will come to an end
should the event specified in the condition occur.
Eg: an insurance contract may specify that in the event that the owners lease the
property the contract of insurance ends

- For example: this is not a type of termination: Where an event occurs that is not the fault
of either party that causes a fundamental change to the nature of the contract and the
parties obligations and although the contract covers that eventuality, it would cause
hardship to one party to enforce it.

III. Termination by breach

- A breach or contract by one party may entitle the other party to terminate the contract.
- However, some breaches of contract don’t entitle termination but only entitle to sue for
damages
- 2 basic situations where termination is commonly allowed:
1. Where other party is unwilling /unable to perform their obligations (i.e. They
repudiate (=từ bỏ) the contract)
2. Breach of a contractual “condition” or a “serious breach” of a “non-essential term”
by the other party.
3. The following constitutes bait advertising: Jaz approaches a salesperson on the
forecourt to buy the car package she saw advertised on television and is told that
there were only two cars for sale as a part of that deal and there are now none left.
The salesperson tells Jaz that she would look much better in the convertible model
and although there is no deal on that car, it is only $50,000 more.

4. The following is not an enforcement measure under the Australian Consumer Law?
A disclosure order issued by the ACCC. →An enforcement measure under the
Australian Consumer Law: 1. An order of the court requiring a supplier to publish an
advertisement, 2. A two-year probation order of the court, and 3. A notice issued by
the ACCC requiring a supplier to substantiate a claim about a product they are
selling.

Differences between a breach of a condition and a breach of a warranty

Breach of Conditions Breach of Warranties

 ● Condition: a contractual term that is ● Warranty: a less important contractual
the whole basis of the contract and term and is not considered as the basis
goes to the root of the agreement of the contract itself.
● A breach of a condition allows the ● A breach of warranty is treated as a
innocent party to terminate the less serious breach and allows the
contract and/or claim damages innocent party the right to claim
(choices) damages BUT there is no legal right to
terminate the contract
● High Court decision was it said: “[T]here
are two relevant circumstances in ● A written contract allows Joseph, the
which a breach of contract by one party neighbour of Sonny, to take “as many
may entitle the other to terminate. The strawberries as he likes each strawberry
first is where the obligation [is] season”. This contract is valid as the
essential … The second relevant parties’ intention is clear.
circumstance is where there has been a
● The following is not a way that a person
sufficiently serious breach of a non-
seeking to rely on an exemption clause
essential term …we rest our decision in
can show that the clause has become
the appeal not upon the ground of
part of the contract: By showing it was
breach of an essential obligation, but
brought to the notice of the other party
upon application of the doctrine
at the time of, or subsequent to,
respecting intermediate terms.”
entering into the contract.
Koompahtoo Local Aboriginal Land
Council v Sanpine Pty Ltd (2007) 233
CLR 115.

IV. Termination by frustration

1. Elements for frustration:
● Event occurring after contract made (but before completion)
● Causes a fundamental/radical change to the nature of contract and
obligations of parties
● The event was not the fault of either party
● The event was not foreseeable by either party
● It would be unfair to enforce the contract
● Criminal proceedings may be brought for unfair practices.
 ➢ If frustration is successfully proven, the parties are released from any further obligations
under the contract (i.e. The contract is terminated/discharged from the date of the
frustrating event)// The following is not correct: It is prohibited to offer goods at a special
price and not have a sufficient amount of those goods available for a long period of time.
→ Correct: 1. It is prohibited to offer free gifts with purchase then factor the cost of the
gift into the purchase, 2. It is prohibited to take a customer’s money knowing that the
product they want is no longer available even where the product the supplier intends to
sell to the customer in its place is similar, and 3. It is not prohibited for a bank to send a
credit card to a customer at their written request.

2. Recognised frustrating events

● Supervening illegality (an unexpected illegal act)
E.g. Opening a coffee shop or a gym has become unlawful during the lockdown period due to the
Covid 19 pandemic./// Who/what are exempt from the provisions of s18 of the Australian
Consumer Law? Information providers such as media outlets.
● Death or illness
Where the contract is one of personal service and the party to perform the service dies or suffers
from serious disability/illness => The contract will be frustrated// Krell v Henry [1903] 2 KB 740
illustrated: That the parties are discharged if an event occurs which forms the basis of the
contract, but which prevents performance at no fault of either party.

● Destruction of subject matter

Where performance of the contract is rendered impossible by the physical destruction of the
subject matter before performance falls due => The contract is terminated
● Common objective no longer attainable
● Governmental intervention
● Other supervening circumstances

3. Limitations on termination by frustration

- Where event is provided for in contract
- Where event was reasonably foreseeable by the parties
- Event caused by one of the parties

4. Effect of frustration

Common Law Statute Law

 - Frustration automatically terminates a fairer distribution of losses for frustration
the whole contract, not part of it E.g.
- The future obligations of the parties - All amounts paid before the frustration
are discharged, but rights and liabilities event are to be repaid
that have already accrued (e.g.
Payments due and payable at the time
the contract was frustrated) remain
- Money paid can be recovered

V. Termination by operation of law

1. Bankruptcy
- If a party becomes bankrupt=> personally relieved of the contract, but the other party
may claim on the bankrupt’s estate for any loss or damage
- Bankruptcy Act 1966 (Cth): a trustee in bankruptcy may adopt or rescind (hủy bỏ) certain
contracts into which the bankrupt has entered.
- The bankrupt is given a certificate of discharge by the court, which releases the bankrupt
from all debts provable in bankruptcy, but not released from liability in respect of certain
types of debts (e.g. Liability for fraud)

2. Merger
- A deed may displace a simple contract.
- The simple contract is terminated, and the relations and rights of the parties are
governed by the deed.
- Merger requires:
(a) Parties to the 2 agreements must be the same
(b) The subject matter must be the same
(c) The second security must be of a higher value than the first

CHAPTER 14: LAW OF TORTS

I. Comparing tort with criminal law and contract law:
● Tort is civil wrong.
● Provides a remedy for one person’s wrongful interference with another’s
personal/property rights.
● Rights have corresponding “duties” imposed by law (common law and statute)
● Important area of law for society generally, but especially for businesses
 1. Liability in tort and criminal liability:

Crime Tort

Definition A crime is an offense Law of torts (luật tra tấn) is

against the state ⇒ criminal the individual’s rights to
proceedings are conducted compensation (bồi thường)
in the name of the state for the loss or injury caused
by the wrongful conduct.

Example In the case of a sexual In the case of the assault, it

assault of a woman, the is the victim who is
culprit may be prosecuted responsible for bringing the
and, if found guilty beyond action and, provided she
a reasonable doubt, will can prove her case on the
receive a criminal sanction balance of probabilities, she
(a fine or imprisonment or will receive a remedy
some other penalty). (usually damages)

2. The law of torts and contract law:

● Commission of a tort and breach of contract can both give rise to civil action for damages.
● Contracts: Voluntary duties
● Tort: General rights enjoyed by all/// Contingent conditions include conditions
subsequent and conditions precedent.

● The following is not an exception to privity: Employment.

→ Exception: 1. Insurance, 2. Agency and trust, and 3. Property Law.

II. Negligence:

1. Scope of the tort of negligence:

- Negligence involves careless behavior - Not a specific form of conduct so can be applied to
any human activity.
- Damages are recoverable for physical damage and financial loss.

2. Statutory reform:
- Civil law reforms - general principles:
- Negligence criteria:

● Defendant only liable if plaintiff can prove:

(a) Defendant owed plaintiff a duty of care;
(b) Defendant breached duty of care;
 (c) Causation: Defendant’s breach was the cause of the plaintiff’s loss; and
(d) Remoteness of damage: Damage suffered by plaintiff was not too remote.
● There are 2 other considerations:
(a) Whether either of the two defences or mitigrating factors to a negligence claim -
contributory negligence and voluntary assumption of risk - are relevant.
(b) Whether the civil liability reforms are relevant.

3. Duty of care:

- In Australian Safeway Stores v Zaluzna (1987) 162 CLR 479, the respondent was a
lawful entrant upon the land of the respondent, establishing a relationship
between them and there was therefore a duty of care owed by the appellant to
avoid a foreseeable risk of injury.

● “Neighbour principle” criticised:

- Inadequate determinant of duty of care to be applied in all cases?
- The “neighbour principle” is often viewed as a test of the foreseeability of
harm.
● “Reasonable foreseeability” test is relatively straightforward where the relationship
between the plaintiff and the defendant is one that falls into one of the established
categories where a duty has been recognised by the courts.
Example about the duty of care:
 + manufacturers owe a duty of care to consumers;
+ motorists owe a duty of care to other road users;
+ teachers owe a duty of care to their students;
+ employers owe a duty of care to their employees;
- In Tame v State of New South Wales (2002) 211 CLR 317 where Tame was given a false:
blood alcohol reading, part of the test of reasonable foreseeability is a question of fact.

● Pure economic loss: Principles to determine duty:

- Reasonable foreseeability
- Indeterminancy of liability
- Individual autonomy factor
- Vulnerability to risk
- Defendant’s knowledge of risk and magnitude

❖ The duty of care in specific situations:

● The nature of the duty of care:

The duty of care test in 5 situations:

1. Negligent acts causing physical harm:
- Occurs when having a positive infliction of physical harm
- The existence of a duty depends on whether the harm suffered by the plaintiff was
reasonably foreseeable.
- To claim damages a causal link must be established between the defendants breach and
the plaintiff’s injury.
 - The reform to the law of negligence that took place in Australia in the early 2000s does
not apply to claims in contract law. © 1. Limits the scope of potential liability for
negligence, 2. Was enacted in all Australian states and territories, and 3. Covers personal
injury.
- The court asks whether a reasonable onlooker would have foreseen the possibility of
injury (reasonable foreseeability of injury) to the plaintiff.
- Why was the plaintiff successful in Overseas Tankship (UK) Ltd v Miller Steamship Co Pty
Ltd (The Wagon Mound No 2) [1967] AC 617 (PC) when another plaintiff failed in the
earlier related Wagon Mound case? - In the first case, the plaintiffs failed to show that a
reasonable man would have foreseen the risk of damage from the oil spill.

[Example: page 333]

2. Negligent acts causing mental harm:

- In the early nervous shock/psychiatric damage cases, the courts, reflecting the community
standards of the day, were reluctant to recognise nervous shock as a kind of damage in its
own right
- Is not usually recoverable by way of damages? Compensation for mere inconvenience or
disappointment. Recoverable: Loss that is difficult to estimate, nominal loss, and expenses
incurred in reliance on the other party’s promise to perform.
- In Jarvis v Swans Tours Ltd [1973] QB 233, where Jarvis was disappointed by, among other
things, the little dry nut cakes on his holiday damages were awarded partly for
disappointment.
- The principles for recovery of damages for psychiatric illness were reconsidered by the
High Court in Tame v New South Wales.
[Example: pp. 334 & 335]

3. Liability for omissions:

- In case that a person may be liable for omissions is where a person has a positive duty to
act
- Positive duties may be imposed where the parties are in a pre-existing relationship that
contains elements of reliance or dependence or where the defendant is in a position of
control.
- Example: parent and child, doctor and patient, school authority or teacher and student,
employer and employee,...
[Example: pp. 336]
 4. Negligent acts causing pure economic loss:
- A pure economic loss is financial loss that occurs independent of personal injury or
damage to property
[Example: pp. 339]

5. Negligent statements causing pure economic loss:

- A distinction is drawn between negligent words and negligent acts because the courts
recognised that words may have far wider repercussions than physical acts
- High Court of Australia confirmed that a person could owe a duty care for negligent
statements provided:
(a) The advice was given in respect of a serious or business matter;
(b) The adviser should have realised he or she was being relied upon to give correct
advice; and
(c) It was reasonable for the other person to have relied on the advice.
(d) Where a person gives advice, that advice is relied upon and the advice is incorrect,
the person giving the advice may be liable in negligence. Incorrect? The duty of
care only arises where the “special relationship” involves a person seeking advice
from the advice-giver, not where the advice was given unrequested and merely
accepted. ©:
+ The “special relationship” described in Mutual Life & Citizens’ Assurance Co
Ltd v Evatt : (1968) 122 CLR 556 has been accepted as the test for
determining the existence of a duty of : care with respect to negligent
misstatements
+ The test in Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR
556 was : approved in San Sebastian Pty Ltd v Minister Administering
Environmental Planning &: Assessment Act 1979 (1986) 162 CLR 340
+ The advice-giver does not need to be in the business of giving advice

Example: pp. 342

- The establishment of liability for negligent misstatement has also led to an increasing
number of actions against solicitors, accountants, auditors and other financial advisers for
recoupment of financial losses allegedly suffered as a result of reliance by third parties
(such as investors, creditors, shareholders, mergers and takeovers analysts) on negligent
advice or information provided by tax specialists, accountants, auditors and lawyers.
 III. Breach of the duty of care
- Once a plaintiff has established that defendant owed them a duty of care, they must then
establish that the defendant breached that duty of care.
- A circumstance where specific performance would be ordered: Where the subject matter
of the contract is an apartment in a complex of 20 apartments.
- Consideration of whether the defendant met the standard of care required by the law of
negligence should be involved.

There are 2 stages to determining whether there has been a breach of duty:
1. First stage - foreseeability and the reasonable person
A person is not negligent in failing to take precautions against a risk of harm unless:
(a) The risk was foreseeable
(b) The risk was not insignificant

Explanation for requirement (a) & (b):

Assuming the risk was foreseeable, the common law said that a reasonable person would only
respond to such a risk if it is not “far-fetched and fanciful”
➔ A defendant will only be in breach for a failure to respond if the risk of harm is “not
significant”
(c) In the circumstances, a reasonable person in the person’s position would have taken
those precautions ( => Examine “whether a reasonable person in the person’s position
would have taken those precautions”)
- The standard of care demanded of the reasonable person is an objective test.
- Reasonable person is equipped with the same skills and expertise expected of a person
exercising a particular trade or profession
- When assessing reasonableness, the courts consider what a reasonable person would
have done in the circumstances rather than ask what could have been done to avoid the
injury, loss or damage.

2. Second stage - reasonableness of the response

Deciding how a reasonable person would have responded to the risk by examining
following factors:
(a) The probability of the risk of injury
(b) The gravity of the harm
The more serious the risk, the greater the demand for precautions on the part of
the defendant
(c) The burden of eliminating the risk
“One must balance the risk against the measures necessary to eliminate the risk”
 ➔ The easier it is to eliminate a risk, the less likely a defendant’s failure to take precautionary
steps will be justifiable (Việc loại bỏ rủi ro càng dễ dàng thì việc bị cáo không thực hiện các
bước phòng ngừa càng ít có khả năng được biện minh)
(d) The utility of the defendant’s conduct

❖ The standard of care for professionals - the statutory tests

(a) A professional does not incur a liability in negligence arising from the provision of a
professional service if it is established that the professional acted in a manner that
was widely accepted in Australia by peer professional opinion as competent
professional practice.
(b) Peer professional opinion cannot be relied on for the purposes of this section if the
court considers that the opinion is irrational.
(c) Although there are differing peer professional opinions widely accepted in
Australia, it does not prevent any one or all of those opinions being relied on for
the purposes of this section.
(d) Peer professional opinion does not have to be universally accepted to be
considered widely accepted.
(e) The court must rely on peer professional opinion even where it considers that
opinion irrational is not a provision of the Wrongs Act 1958 (Vic) relating to
professional liability.

➔ The defendant is liable unless he or she can show by way of defence he/she acted in a
manner that satisfies the peer professional test

The courts will accept a peer opinion if:

(a) The opinion accurately and exhaustively comments upon the professional’s conduct
(b) The peer providing the opinion has appropriate qualifications and expertise
(c) The opinion is objective without any demonstrable bias towards the defendant

❖ Damages
Final element that a plaintiff must prove for an action in negligence is that:
(a) It was caused by the defendant’s negligence
(b) It is appropriate for the “scope of the defendant’s liability” to extend to the loss or
damage or injury

Causation = injury/damage linked to negligence

The decision whether a breach of duty caused the particular harm involves a test or element of
“factual causation”. The determination of factual causation is a statutory re-statement of the
common law “but for” (nếu không có) test of causation.
➔ Applying the consideration of a hypothetical situation (tình huống giả định). If, in this
hypothetical situation, the plaintiff would not have suffered damage then the defendant’s
negligence is taken to be the effective cause of the plaintiff's damage.

IV. Remoteness of damage

- Relates to “scope of liability”
- Used to examine whether the damage is too remote, and thus not recoverable, or
whether the damage was reasonably foreseeable by the defendant
➔ determine whether, and to what extent, a defendant should have to answer for the
consequences of their negligent conduct.

V. Defences to an action in negligence

The principal defences to an action for negligence are:
(a) Contributory negligence
- A complete defence
- No compensation could be recovered where the plaintiff suffered damage partly
through their own negligence and partly through the negligence of another.
- Contributory negligence is concerned with the plaintiff’s failure to take
precautions for their own safety.
- This is a special defence and must be pleaded by the defendant.
- An assessment is made of the damages that would have been awarded if there
had been no fault on the plaintiff’s part. This amount is then reduced by the
percentage of the plaintiff’s contribution.
(b) Voluntary assumption of risk
- Unlike contributory negligence, a successful plea (lời bào chữa) of voluntary
assumption of risk is a complete defence
- The courts have limited the scope of this defence because it’s not enough for the
defendant to show that the plaintiff knew of the risk, he/she also needs to prove
the plaintiff must have fully appreciated the risk and accepted it freely and
willingly.

❖ Strict liability
- No intention or negligence on the part of the defendant.
 - Plaintiffs need only prove that the tort occurred and that the defendant was
responsible.

❖ Vicarious liability
- a person is regarded by the law as responsible for the acts or defaults of another
person
- Arises where a particular relationship exists between the person held responsible
and the wrongdoer (e.g. Employer & employee)
- Nicola drives the forklift at her place of work, Rooze’s Roofing. Nicola always
leaves the forklift in a certain place where she has been told to leave it, with the
forks up off the ground. One afternoon a customer who is collecting goods from
the workshop reverses his car into the forks on the forklift. He is injured and his
car is damaged. The principle that would make Nicola’s employer liable for her
actions is vicarious liability.

CHAPTER 15: LAW OF AGENCY

I. The agency concept:

We are responsible for our actions most of the time. However, there are cases where we engage
others to act on our behalf.
- Court hierarchy: the highest court in Australia is the high court of Australia
- Lack of expertise
- Lack of time
- Inability to be present
- For example: the most convenient instance to be thought of is educational companies,
they provide their customers with consults about a wide range of services relating to
multiple aspects of studying abroad.
The agency matrix:
● Principal: authorizes agent to act
● Agent: who has express or implied authority to act for a principle with the purpose
of bringing the principal into legal relations with a third party
● Third party: create contract(s) with the principal.
● The essence of agency: it should be within the scope of the employment that the
person employed brings the employer into a legal relationship with a third party.
● For example: Salespeople employed to sell goods are agents.
● Most forms of agency creation takes place expressly by writing and ratification.
II. Rights of an agent:
Right to remuneration (Right to be paid/ received commission)
+ In commercial: remuneration is often a % commission
Requirement 1: terms and circumstances of the appointment must be examined
+ That is, the agent may be entitled to remuneration only if they complete the sale,
or in special cases, commission may be payable if the agent simply brings the
parties together.
Requirement 2: Agent must be the effective cause of the sale (quintessential)
+ The transaction in respect of which the remuneration the agent claims must be the
scope of agent’s authority + the agent’s services (more important)
+ Back to our purpose, the agent must have been the means whereby the two
contracting parties were brought together and entered into a legally binding
contract. That is, the agent must have been the effective cause of the sale to be
entitled to remuneration.

- Right to indemnity and reimbursement (Right to compensation and reimbursement)

+ Every agent: entitled to be indemnified against all losses and liabilities sustained &
reimbursed for all expenses lawfully incurred in the carrying out of the principal’s
instructions
+ A committal hearing is held before most summary offence is incorrect with respect
to criminal offences ©
(i) Indictable offences are generally the more serioud offences
(ii) The prosecution must prove its case beyond reasonable doubt
(iii) Summary offences are determined by a magistrate without a jury
+ If the expense is unlawful = the agent acts outside of their scope and authority →
has no claim to be reimbursed or indemnified.

- In case of revocation by the principal: (In any contract of agency, unless some express
stipulation has been made to the contrary, there is an implied term that either party may
terminate it upon notice)
+ Rights of principal revoking the agent’s authority: limited by rights of third parties
and the agent.
+ Revocation’s means to the agent: the principal is obliged to indemnify
(compensate) the agent against any loss or damage the agent may have suffered
as a result of their employment.
+ The agent may be entitled to claim for loss of commission. For example, the
principal cannot capriciously refuse to enter into a contract and revoke the agency
 when the agent has found and introduced a purchaser ready, willing and able to
buy at the stipulated price.

- Right of lien (Right to to retain possession of something until paid)

+ An agent has a particular lien on property of the principal as it comes into the
agent’s hands for the due payment of all expenses and remuneration lawfully
incurred by the agent in transacting the principal’s affairs.

Case study: Applying Australian law to resolve the problem below. Would your answers be
different if Vietnamese Laws apply?
Angela deals in the sale of quilts, both new and ‘pre-loved’. As Angela often accepts items on
consignment, the standard form agreement with her consigners states that she is entitled to
commission when she finds a buyer. Greta gives Angela a beautiful quilt made by her
grandmother and Angela finds a buyer the very next day. Before the quilt has been sold, Angela
receives a text message from Greta, telling her that, for sentimental reasons, She wants to keep
the quilt and will come to collect it that afternoon. Can Angela sell the quilt, based on her rights
as agent?

Issue: Whether or not Angela can sell the quilt in Australian law, based on her rights as an agent?

Rules:
1. Agreement: While the agency is still current, both the principal and agent may mutually
agree to its termination. (Turner et al, 2009).
If it is not agreed by both the parties, then it would be considered as a unilateral termination of
the agency relationship. Then, the agent has the right to notice, which states that the agent may
be entitled to reasonable notice of the revocation of their authority, unless the agency
agreement specifies otherwise.
2. Rule of unilateral revocation: Right to be noticed
The agent and third parties’ rights can limit the action of revocation of the agent’s authority by
the principal (Article 540 in Commercial Law 2005). The agency relationship may end if the
principal gives notice to the agent that they revoke the agent’s authority to represent them.
Application:
1. Agreement: If both parties agreed to terminate the agency relationship, Angela would
have to return the quilt to Greta.
2. Unilateral revocation:
Being said so, Greta can not demand the return of the consigned goods and terminate the
consignment arrangement unless notice Angela [and the consignment agreement ratified such an
act (because the buyer was already found and engaged in the purchase agreement with the
agent)], Angela may be entitled to all legal fees paid as a result of Greta's breach of contract.
● Statement regarding the dissolution of a partnership is incorrect: A firm’s assets as
contributed by partners to make up capital losses need not be applied to pay the firm’s
debts/liabilities to non-partners.
➔ Correct: 1. In the event of dissolution, losses must be met first out of profits, followed by
capital, then by partners in proportion to their share of profits, 2. After dissolution, each
partner is entitled to advances and residue by the firm, and 3. After the dissolution, each
partner’s authority to bind the firm continues, so far as necessary for winding up
partnership affairs and completing unfinished transactions.
● The incorrect statement: The owners of a corporation have unlimited liability.

➔ ©: First, A separate legal entity is separate from its owners and managers, Second, A
corporation can sue and be sued in its own name. Third, Complex business structures are
more expensive to establish.

Conclusion: Angela will return the quilt. If Greta decides to enter the contract and revoke
Angela’s authority, Angela is entitled to claim for commission and compensation.

Vietnamese Law
There are two separate parties involved in this transaction:
● The principal (consignor): Greta
● The agent (consignee): Angela

Issue: Whether or not can Angela sell the quilt in Vietnamese law, based on her rights as an
agent. If not, can she claim back her commission?

Rules: An agent has a duty to act in the best interests of the principal and to follow the principal
instruction (Article 170 & 174 in Commercial Law 2005). In an agency relationship, the ownership
of the goods are not transferred to the agent. The agent acts as an intermediate party to get the
principal and the customer into a legally binding contract. Once the transaction is completed, the
ownership of goods is transferred to the customer → If the principal revokes the agent’s
authority, the agent no longer acts on behalf of the principal.

Application: Vietnamese commercial law allows consignors (Greta) to revoke her consent to sell
the consigned goods (the quilt), even after the agent (Angela) has found a buyer. Being said so,
the ownership of the quilt is of Greta until it is delivered to the buyer. Thus, Greta has the right to
demand the return of the consigned goods and terminate the consignment agreement.

Conclusion: Angela can’t sell the quilt without Greta’s consent, even if Angela had found a buyer.

CHAPTER 16: LAW OF PARTNERSHIPS

I. Nature of partnerships
1. “Carrying on a business
- Implies a repetition of acts, and commonly excludes the case of an association formed for
doing one particular act which is never to be repeated.
However a single enterprise engaged by a joint venture may be a partnership: United Dominion
Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1. - The incorrect statement: If the giving of investment
advice is within the scope of the firm’s business then all partners are jointly and severally liable
for advice that is not in a client’s best interests. - ©: 1. Partners are not bound when another
partner misappropriates monies, 2. The client should seek a personal indemnity from a partner,
and 3. Special skill is required to bind all partners.

- A wrongful act/omission includes breach of contract or of fiduciary duty, negligent

misrepresentation, and misleading or deceptive conduct is incorrect
➔ 1. A retiring partner should give specific notice of their retirement to persons with
whom the firm has had dealings to avoid being made liable for debts incurred after
retirement

2. Persons who represent themselves, or knowingly allow themselves to be

represented, as a partner, are liable as a partner to anyone who has on the faith of
such representation given credit to the firm,

3. Innocent partners are liable for wrongful acts of other partners made in the
ordinary conduct of business.

- In Popat v Shonchhatra (1997) 3 All ER 800, the Court decided Popat was entitled to half
the profits on the sale of the business and to a share of the profits that had accrued after
the dissolution of the partnership, but before the final settlement of accounts is an incorrect
finding.

2. In common
- There must be a “mutuality of rights and obligations” ie the business must be carried on by,
or on behalf of, all the partners (agency principle): Degiorgio v Dunn [2004] NSWSC 767.
 - In The Wagon Mound No 1 and The Wagon Mound No 2, where there was an : unfortunate
combination of an oil spill, welding sparks and floating cotton waste, the loss : was found
to be not reasonably foreseeable in the circumstances is incorrect: ©
(a) If damages are too remote they will not be recoverable
(b) The remoteness test will be satisfied where the damage suffered is of the same type
or: kind as foreseeable damage
(c) In order for damage to not be too remote, it must be reasonably foreseeable
- The statement regarding partnership is incorrect: Partnerships do not avoid taking on the
formality and expense of an incorporated company. - Correct: 1. A partnership (or firm) is
a way of gathering resources or expertise for major projects, 2. Partners in a partnership
complement each other with their skills and bring in new capital and broader funding
options, 3. A partnership in law may exist without the partners being aware of it.

3. With a view to profit

- Partnerships do not have to make profits but they must be created with a view to profit.
- The below statement is incorrect: Partnership property is liable to be seized for the private
(personal) debt of a partner and made liable on a judgment against the partnership. ©
(1) A creditor who has obtained a judgment in respect of the separate debt of a partner
may obtain an order charging that partner’s interest in the partnership property and
profits with the amount of the debt and interest,
(2) A creditor who has obtained a judgment in respect of the separate debt of a partner
may obtain by order the appointment of a receiver of that partner’s share of profits
and of any other money which may be coming to the partner in respect of the
partnership,
(3) The two sources of law relevant when considering how partners bind their partners
when dealing with third parties are the common law (including equity) of agency
and the Partnership Act. The common law complements the provisions of the
Partnership Act in relation to the authority that an agent has.

- The legislation that regulates partnerships in NSW: Partnership Act 1892 (NSW) [or
Partnership Act 1958 (Vic) if there is no (NSW) after Partnership Act 1892]
- Legislation in Victoria: Act regulates partnerships in Victoria: Partnership Act 1958 (Vic)
II. Relationship of partners with each other

The rights and obligations of the partners to each other arise from three distinct areas of law:
1.The partnership agreement
2.The Partnership Acts
3.The equitable concept of the fiduciary (ie party in a position of trust)
4. In a partnership, partners have limited liability for the business debts is incorrect - ©: 1. Partners
share the profits in a partnership/ A partner is also an agent of the partnership, and / The
agreement may be implied in a partnership.

5. A written and signed notice of a partner’s intention to dissolve the partnership is required where
no fixed term has been agreed upon for the duration of the partnership is incorrect: ©

(i) a continuing guarantee given by or to a partnership is revoked as to future transactions if there

is a change in the constitution of the partnership,

(ii) where a partnership continues after a fixed term has expired, the rights and duties of the
partners remain the same, but the partnership becomes a partnership at will

(iii) partnership property must be used exclusively for the purposes of the partnership and in the
manner set out in the partnership agreement.

6. A partner’s express authority must be in writing is incorrect: ©

(a) A partner’s authority to buy/sell goods of a kind necessary for or usually employed in the
business on account of the firm is implied

(b) A partner cannot pledge the firm’s credit for purposes not connected with its ordinary course
of business without express authority

(c) A partner cannot pledge the firm’s assets for private debts without express authority.

III. Relationship of partners with each other

1.The partnership agreement: sets out the various rights, duties and liabilities of partners.
2.Partnership Act: applies to matters not covered by or in the absence of a partnership agreement.
3.Equitable duties: various duties and rights arise from the nature of the relationship (trust)
between partners.

4. The partnership under the Act must be registered with ASIC does not apply to the Partnership
Act - Apply: 1. The rules in the Partnership Acts assist in determining whether a business is being
carried on in common, 2. Each rule states a negative: i.e. that a certain fact does not of itself create
a partnership, but is only indicative of a partnership, and 3. Joint or part ownership or joint tenancy,
or tenancy in common whether or not the owners/tenants share the profits, does not of itself
create a partnership as to anything soheld/owned.
 5. A partner pledge the firm’s credit would: Only for a purpose directly connected to the firm’s
business but must have express authority to do so.

6. Statement that is not a ground for termination of a partnership: Partner leaves the jurisdiction.
- A ground for termination of a partnership: 1. Court order, 2. Expiry of a fixed term, and 3.
Bankruptcy of a partner.

7. A term that is vital to a contract is known as a condition

Partnership Act 1958 (Vic), ss 32 – 34

Chan v Zacharia (1984) 154 CLR 178
United Dominion Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1

IV. Relationship of partners to third parties

● Every partner is an agent of the firm: s 9 ie they can bind their partners (as principals)
● All partners may be bound by the actions of a partner:
- when the partners have authorised a partner to enter into a transaction on their behalf
(law of agency applies)
- when one of the partners has acted, without express authorisation, in circumstances
where the following requirements of the Partnership Act have been met:

● A partner cannot pledge/sell partnership property, incur and pay debts on partnership
accounts or hire employees is incorrect:

(i) A partner has express actual and implied actual authority to engage in certain activities
with third parties,

(ii) Contravention of an agreement to restrict a partner’s authority is not binding on the

firm if notice of the agreement has been given,

(iii) In Polkinghorne v Holland (1934) 51 CLR 143, the firm was held liable because Holland
provided the advice in his role as solicitor; thus in the ordinary course of the firm’s business.

● If a limited partner has suffered his/her share of the partnership property to be charged for
a separate debt, the other partners are entitled to dissolve the partnership is incorrect -(c)
1. A limited partner may assign his/her share in the partnership with the consent of the
general partners, 2. The consent of a limited partner is not required to admit a person as a
partner, and 3. A limited partner is not entitled to dissolve the partnership by notice.

Liability of partners to third parties

● Partners are :
(a) jointly liable for the debts of the partnership
(b) jointly and severally liable for the wrongful acts of the partner(s)
and
(c) jointly and severally liable for misapplication of money or property

● Each partner must take an active part in the direction and management of the firm is the
statement regarding partnerships is incorrect - ©: 1. The second element of a partnership
is carrying out a business in common, 2. To be a partnership there must be a mutuality of
rights and obligations, and 3. In Degiorgio v Dunn [2004] NSWSC 767 it was held that there
was no partnership because the business was not run “in common”.
● (I): A partnership cannot be dissolved because the business is carried on at a loss is the
incorrect statement.
➔ (i). A term often included in a partnership agreement that allows other partners to
purchase a retiring/deceased partner’s interest at an agreed valuation avoids the disruption
of a formal winding,

(ii). Partnerships can be dissolved because of mutual incompatibility, making it impossible

for partners to carry on a business,

(ii). On dissolution, partnership property can be applied towards the payment of

partnership liabilities/debts and any surplus can be distributed among the partners.

● The Corporations Regulations 2001 (Cth) provide greater numbers in certain specified
professions constitutes an exception to the usual number of a partnership being 20 partners
V. Dissolution of partnership

A partnership may be dissolved in various ways including:

1. Operation of law
2. By agreement of the partners
3. Court hierarchy: Local or Magistrates Courts are the lowest courts in the state hierarchy
4. In accordance with the provisions of the partnership agreement
5. By the court upon application by a partner or where it is just and equitable to do so
6. In Harvey v Harvey (1970) 120 CLR 529, the Court held that if a partner receives an additional
annual fee to be “on call” for that client, the fee belongs to the partnership is the court decision
regarding fiduciary is incorrect. - ©: 1. In Chan v Zacharia (1984) 154 CLR 178, the court decided
that that the fiduciary relationship continued until the partnership had finally been wound up, 2.
In United Dominion Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1, the Court found that a fiduciary
relationship, with attendant fiduciary obligations ordinarily exist between prospective partners
who have embarked upon the conduct of the partnership business or venture before the precise
 terms of any partnership agreement have been settled, and 3. In Popat v Schonchhatra (1997) 3
ALLER 800 in the absence of a statement to the contrary, partners are entitled to an equal share of
profits.
7. If a member of a firm of solicitors acting for a vendor in a sale absconds with the deposit, his/her
partners are not liable to refund the money is the incorrect statement. ©
(a) In Lloyd v Grace, Smith & Co [1912] AC 716, the firm was held responsible for the fraud
committed by a managing clerk of a firm, who misappropriated property while acting within
the scope of his authority,
(b) In SJ Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd it was held that the
transfer of a share to a non-partner breaks the continuity of the firm, constituting a new
firm/partnership of the remaining former partners and the new member,
(c) Partnership agreements can contain provisions to enable the transition from one firm to
another to be effected without the disruption of a formal winding up.
8. A partnership must be in writing is the statement that is incorrect: © 1. a separate legal entity
can commit civil wrongs and engage in criminal conduct, 2. a public company has serious
compliance obligations, and 3. a separate legal entity is entitled to own property, pay tax and enter
into contracts.

Limited Partnership
Partnership Act 1958 (Vic) Pt 3, & Partnership Act 1892 (NSW) Pt 3
● Allows formation of a partnership in which there is at least one general partner with unlimited
liability and one or more limited partners whose liability for the debts and obligations of the
partnership is limited.
● A limited partner must not take part in the management of the business and does not have power
to bind the firm.
● This allows firms to bring in partners who provide capital for the firm effectively as investors in the
firm.
● A creditor can enforce liability against an incoming partner whether or not he/she is a party to the
contract is the incorrect statement. © Correct: 1. In the absence of special statutory provision,
although each partner is liable with the others for the whole of the debts of the firm, their liability
is only joint, 2. A creditor can bring only one action against members of a partnership and any
partner can insist that the action be stayed until all other partners are joined as parties, and 3. A
person admitted into an existing firm, liability may be incurred where it is specially agreed upon.
 ● After payment of the firm’s liabilities, partners do not have the right to have surplus assets applied
in payment of what may be due to the partners respectively / A firm’s asset as contributed by
partners to make up capital losses need not to be applied to pay the firm’s debt/liabilities to non-
partners is the statement regarding dissolution of a partnership that is incorrect: ©
(1) Partners are not entitled to have partnership property applied towards the payment
of partnership liabilities,
(2) On the termination of the partnership, any partner can apply to the court for a
decree to dissolve the partnership and appoint a receiver to wind up the firm’s
business/affairs,
(3) Should a sequestration order be made against a partner, a creditor of the firm
cannot receive a dividend out of the bankrupt’s separate property until all separate
creditors of the bankrupt partner have been paid in full,
(4) In the event of dissolution, losses must be met first out of profits, followed by
capital, then by partners in proportion to their share of profits, (5) After dissolution,
each partner is entitled to advances and residue by the firm, and (6) After the
dissolution, each partner’s authority to bind the firm continues, so far as necessary
for winding up partnership affairs and completing unfinished transactions.

● However, if a limited partner does take part in the management of the business, he or she will be
liable as a general partner (ie unlimited liability).
● In Baltic Shipping Co v Dillon (1993) 176 CLR 344, why did the High Court refuse to allow : the plaintiff
recovery of all their total cruise fares and expenses: There had not been a total failure of
consideration

CHAPTER 17: CORPORATIONS LAW

I. Corporate personality and limited liability

● Company itself has unlimited Liability for its own debts
● Members have “limited liability” for company debts (unpaid capital on shares)
● Company is sued and sues in its own name
● Can own property/assets
● Can make contracts (via directors as agents)
● Company may have perpetual succession ie it can continue even after death of
directors/members
● Cribb v Korn (1911) 12 CLR 205 established the sharing of joint returns does not in itself
create a partnership.
 ● Regarding partnerships, partnerships are created with a view to profit, so partners must
make a profit /A partner does not have to have a direct claim to a share of the profits. ©

(i) Associations and charities are not partnerships, as profits come from ancillary business
activities and are reinvested, not distributed as dividends to their members,

(ii) The Partnership Acts do not govern members of a corporation incorporated under the
provisions of the Corporations Act 2001 (Cth), a special Act of Parliament, or Royal Charter.

● More complex business organisations are unsuitable for larger businesses is the incorrect
statement: ©
(a) Like most partners, sole traders have unlimited personal liability of the
business/firm,

(b) Upon incorporation, a corporation becomes a separate legal entity,

(c) Diverse ownership requires proper management and expertise in numerous areas.

II. Constitution and replaceable rules

Companies in existence prior to July 1998

● continue to have a memorandum
and articles of association as their constitution (unless and until they resolve to repeal them)

● A partnership agreement must be in writing; it cannot be reached orally or by a course of

conduct is the incorrect statement: ©

(a) if the agreement is that a person should be paid a fixed sum by the firm, he/she may
be a partner and jointly liable to creditors of the firm

(b) the rights and obligations of partners to each other arise from the partnership
agreement, the statute and the equitable concept of the fiduciary

(c) the Partnership Act determines partners’ rights, duties and interests, if not included
in the partnership agreement

● The statement regarding persons of unsound mind and minors that is incorrect: if a partner
who is a minor enters into a contract with a third party on behalf of the firm, the minor is
liable as far as private assets are concerned. ©
 (a) a partner of unsound mind is capable of binding the firm and of being bound by co-
partners, unless proven that he/she was of unsound mind when the partnership was
entered into and the other partners knew this

(b) a creditor who has obtained judgment against the firm may not seize the minor’s
separate property

(c) a minor will become liable as an ordinary partner when he/she attains majority the
partnership is not repudiated within a reasonable time.

● Companies post July 1998

● internal management is governed by the “replaceable rules”, a constitution if one is
adopted, or a combination of both: s 134
● Incorporated limited partnerships have been introduced in all Australian States and
Territories is the incorrect statement: ©

(i) as an agent, a partner is able to bind the other partners and, as principal, be bound by
the actions of the other partners

(ii) in New South Wales, Victoria, Queensland, South Australia, Western Australia and
Tasmania provision for limited partnerships is made in the Partnership Act,

(iii) the Partnership Act provides that the rules of the common law and equity are to
continue in force except insofar as they are inconsistent with the Act.

III. Company decision making

Power and control in a company is divided between the directors and the members
● Directors have the power to manage the day-to-day business of the company: s 198A and
generally members cannot interfere
● It must always be supported by consideration to be enforceable is incorrect fact about a
“contractual under seal”: ©
+ It must be writing
+ It obtains its binding legal force from the form in which it was prepared
+ It can allow a gratuitous promise to be enforced
● Members exercise their control through their rights to elect and remove directors, to create
a board composed of directors the members consider will create value in the company
● The Corporations Regulations 2001 (Cth), reg 2A.1.01 does not set a maxima of partners for
architects and accountants is the statement regarding the written law is incorrect: ©

(i)Under s 115 of the Corporations Act 2001 (Cth), the maximum number of persons who
may form a partnership for the acquisition of gain is 20
 (ii)Under the Corporations Regulations 2001 (Cth), reg 2A.1.01, partnerships of more than
20 partners may be formed for certain professions/callings

(iii)The Corporations Regulations 2001 (Cth), reg 2A.1.01 sets a maxima of partners for
medical and legal practitioners, veterinary surgeons, patent and trademark attorneys,
sharebrokers and stockbrokers and pharmaceutical chemists.

● “Replaceable rules” can be displaced or modified by a company’s constitution: s 135(2)

IV. Duties and liabilities of directors and other officers

● The directors of a company can exercise all the powers of the company, except for matters
that require the authority of the shareholders
● Directors are under a fiduciary duty towards the company. The incorrect statement
regarding limited partnerships is: A limited partner does not have the right to inspect the
books of the firm. ©: 1. A limited partner must not take part in the management of the
business and does not have power to bind the firm, 2. If a limited partner partakes in the
management of the business, he/she is liable as a general partner, and 3. Any differences
arising as to ordinary matters connected with the firm’s business are to be decided by a
majority of the general partners
● A company’s constitution and replaceable rules are as a contract between the company and
its members, the company and each director and secretary, and the members themselves:
s 140(1)
Section 181
(1) A director or other officer of a corporation must exercise their powers and discharge their
duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.

(2) The incorrect statement regarding dissolution of partnership is: A firm’s assets as contributed
by partners to make up capital losses need not be applied to pay the firm’s debts/liabilities to non-
partners. ©:

(a) In the event of dissolution, losses must be met first out of profits, followed by capital, then
by partners in proportion to their share of profits,
(b) After dissolution, each partner is entitled to advances and residue by the firm
(c) After the dissolution, each partner’s authority to bind the firm continues, so far as
necessary for winding up partnership affairs and completing unfinished transactions.
V. The assumptions third parties are entitled to make

s 129 - assumptions can be made that:

● The constitution and replaceable rules have been complied with (s 129(1))
● A person who appears to be a director or a secretary has been duly appointed and has
authority to exercise powers and perform duties of a director or secretary (s 129(2))
● Its partnership agreement is invalid is the incorrect statement regarding an outsize
partnership © it has more than 20 partners/ it is liable to a criminal penalty ($500)/ its
agreement does not affect the enforceability of contracts or other arrangements made.
● Partnership may be formed in order to undertake a single business transaction is the
incorrect statement ©

(a) Carrying on a business implies repetition (Smith v Anderson (1880) 15 Ch D 247)

(b) In Khan v Miah [2000] 1 WLR 2123 it was held that work, such as finding, acquiring
and fitting out a shop/restaurant, is undertaken with a view to profit

(c) In Keith Spicer Ltd v Mansell [1970] 1 All ER 462 it was held that ordering goods and
opening a joint bank account in contemplation of a business are insufficient for a
partnership.

● A person held out by the company to be an agent of the company has been duly appointed
and has authority to exercise powers and perform duties of an agent (s 129(3); Brick & Pipe
Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279; Panorama Developments
(Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711)

VI. Membership
● A person is a member of a company if they are identified as a member of the company on
its application for registration: s 120.
● The legislation that controls the actual registration of the firm name: Business Names
Registration Act 2011 (Cth).
● Officers and agents properly perform their duties (s 129(4))
● In Mercantile Credit Co Ltd v Garrod [1962] 3 All ER 1103, damages were not recovered
even though, from the plaintiff’s perspective, the sale of the car was within the usual course
of business is the incorrect court finding: ©

(i) In Goldberg v Jenkins (1889) 15 VLR 36, the firm was not bound to the transaction
because borrowing money on behalf of the firm at over 60% interest when comparable
rates were between 6% and 10% was beyond ‘the usual way’
(ii) In Construction Engineering Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541, Hexyl was not
liable because the construction contract appeared to be between Construction Engineering
and Tembel

(iii) If judgment is obtained against one or more partners of a firm, no action may be taken
against the other partners, even if satisfaction cannot be obtained from the partner(s) sued.