{8107/2107 Lego Aspects of Business 2012-13 13 Term LINGNAN UNIVERSITY DEPARTMENT OF ACCOUNTANCY BACHELOR OF BUSINESS ADMINISTRATION (HONOURS) FIRST TERM EXAMINATION, 2012-13 107/ BUS2: (GAL ASPECTS OF BUS! TIME ALLOWED: 2 HOURS INSTRUCTIONS: 1. This paper is divided into two sections: Section A - ALL questions are compulsory and MUST be attempted (40 marks) Section B - THREE Questions ONLY be attempted (60 marks) This paper carries 100 marks. Marks allocated to parts of questions are indicated in brackets. ‘You are reminded of the necessity for clear and orderly presentation in your answer. Start each answer on a separate page. No dictionary is allowed.{8US107/8US2107 Lego! Aspects of Business 2012-13 1st Tem Section A~ ALL questions are compulsory and MUST be attempted (40 marks) QUESTION NO. 1 Billy lived in France and he intended to return to Hong Kong for permanent residency in September 2011. He wanted to purchase a flat in Tuen Mun and asked his friends and a property agent (Amy) in Hong Kong to help him to find a suitable flat. On 22 June 2011, Sandy (Billy’s friend in Hong Kong) sent Billy a fax, offering to sell him a 600 square feet residential flat, located in Tuen Mun town center at HK$2 million. Sandy stated that she would wait for his decision until July 2. Billy faxed back to Sandy and informed her that he would consider the offer seriously and would revert to her within 10 days. On July 1, Billy met Amy who said to him that the residential flat offered by Sandy had already been sold at the end of June. On July 2, Billy sent a letter to Sandy, accepting her offer of 22 June. Sandy received the acceptance letter on 15 July. (a) Advise Billy of his legal rights in relation to the purchase of Sandy’s flat according to contract law. (13 marks) () Amy told Billy that the purchase price was “consideration” for buying the flat, Explain to Billy what “consideration” means and the different types of consideration. (12 marks) (©) Billy returned to Hong Kong in early September 2011. He attended a conference on the legal system of Hong Kong. The speaker talked about the Basic Law and the sources of Hong Kong law. Billy asked you: (i) toexplain why the Basic Law is so important; and (5 marks) (i) _ what are the main differences between common law and equity. (10 marks)'BUS107/ BUS2107 Legal Aspects of Business 2012-13 Ist Term tempted. Each c QUESTION NO. 2 (a) With reference to cases decided by the court, explain the following contractual terms: (Conditions; (ii) Warranties (8 marks) (b) Billy, a visitor from Japan, went to a newly opened theme park yesterday. After he bought the entrance ticket at the box office, he noticed that there was a road sign inside the theme park which says “under no circumstances will the theme park be responsible for any damage suffered by the visitors who play inside the theme park.” The road sign was written in Chinese only which Billy did not understand. Due to the negligence of the theme park staff, some water was left on the floor of the souvenir shop without any warning sign. Billy stepped on the water, slipped down and hurt his head when he was on the way to the souvenir shop. Billy was sent to the hospital and he incurred a medical charge of HK$50,000. Advise Billy of his legal rights against the theme park. (12 marks) QUESTION NO. 3 (a) What are the main differences between “law” and “ethics”? (8 marks) (&) On 1 February 2011, Beckham (who owned a grocery store in Yuen Long) entered into a purchase contract with Snowman Milk Powder Ltd (“Snowman”) to import 8,000 cans of milk powder from Japan, It was agreed that the goods were to be delivered to Beckham on 31 March 2011. The total contract price was HK$800,000. Beckham paid a deposit of HK$100,000 upon signing the contract and the balance would be payable upon receipt of the milk powder. However, the factory and warehouse of Snowman were destroyed in the Japan 311 earthquake. The production line of milk powder was seriously damaged and the management of Snowman expected that further production of milk powder was not possible within 2 years, Snowman delivered 2,000 cans of leftover milk powder to Beckham on 31 March 2011. Discuss the legal rights of Beckham against Snowman in contract law, (12 marks)'8U107/8US2107 Lego Aspects of Business 2012-1318 Tem QUESTION NO. 4 (@) Explain the duties of an agent? (8 marks) (b) Premier Ltd (PL) is an electronic appliance dealer. Aggie is a newly employed staff of PLand her role is to source electronic appliances for PL. (i) Without seeking PL’s prior consent, Aggie purchased 10 air-conditioners from OK Ltd for $50,000. After the air-conditioners were delivered to PL’s warehouse, PL resold 10 air-conditioners to Tuen Mun Trading Ltd (TMT) for $80,000. TMT was in financial trouble and was unable to pay the purchase price. TMT returned the air- conditioners to PL. PL did not pay OK Ltd and OK Ltd was planning to sue Aggie for the purchase price of $50,000. Discuss whether Aggie is required to pay the price (6 marks) (ii) One month later, Aggie entered into a purchase contract with Orange Ltd to purchase 30 i-phones at $8,000 each. Without informing PL, Aggie received a rebate from Orange Ltd in the form of one latest version of i-phone and the retail price was $9,000 each. Later, PL discovered that the cost of the 30 i-phones was 20% higher than the market price and the batteries were of low quality. Advise PL of their legal rights. (6 marks) QUESTION NO. 5 (@) _ Inrelation to the Sale of Goods Ordinance, explain the following with reference to cases decided by the court: (i) The Nemo Dat rule; (4 marks) Gi) Market Overt (4 marks) (b) Last Sunday, Becky walked into SFC, a retail store selling electrical appliances. Becky wanted to buy a waterproof digital camera for her father (Tony) as his birthday present. She asked the shop owner (Steven) to recommend to her a_good camera and told Steven that her father would use the photos taken to participate in the coming Wednesday marine photo-taking competition with the hope of winning $100,000 cash prize. Steven introduced one camera to Becky and said that the model was water-proof to a depth of 33, feet. Becky then bought it for $2,500 and gave it to his father. Tony used it the following day with reasonable care when he dived in Sai Kung. When he dived 20 feet under water, he noticed the camera was out of order and al] the marine photos were lost. Tony’s right hand was seriously injured by the detachable parts of the camera when using it. Tony was disappointed as he could not participate in the marine photo-taking competition. Advise Becky and Tony of their legal rights and remedies (if any) against SFC under the Sale of Goods Ordinance? (12 marks) ~-End of Questions