Tutorial 3

Exercises

The Hang Seng University of Hong Kong

Hong Kong Business Law (ACY2021)

The Law of Contract (Part A)

Question 1
Peter sees laptop computer on display in a shop window priced at $10,000. He
wants to buy it but the shopkeeper said the sign was wrong and that the price was
$12,000.

Advise Peter. Please include case law in the explanation.

Question 2
Company X makes an enquiry to Company Y about the price of new model mobile
phone. Y replies to X and quoting a price of $5,000 each, on the condition that the
goods are delivered within three days after receiving confirmation of the order made
by X. X makes a counter-offer of $4,500, but Y does not give any feedback on this.

One month later, X confirms its willingness to buy at the original price of $5,000.
However, Y has already sold all the mobile phone to Company Z.

Comment on the case.

Question 3
A company placed a poster in a shopping centre says that anyone who purchase up to
$500 dollars will be given a coupon. The coupon can be used to purchase a radio at
a price of $1.

Discuss the case whether consideration applies.

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 Tutorial 3
Exercises

Question 4
On November 3rd, All Fortune Ltd in Hong Kong posted a letter to Bright Electric
Appliance in London, UK enquiring about the lowest price of new model TV sets that
Bright Electric Appliance manufactured. Bright Electric Appliance replied that
“lowest price is HK$ 8,000 per unit”.

On December 8th, All Fortune made an offer of HK$ 7,600 for each TV set, and in the
letter attached the condition that the goods should be delivered within 2 weeks once
the payment had been confirmed. However, on December 10th, the records of All
Fortune showed that the sales revenue from this new model of TV sets was
unsatisfactory. They quickly posted a letter to revoke the offer they made on
December 8th.

Meantime, All Fortune Ltd’s offering letter reached to Bright Electric Appliance on
December 12th and Bright Electric Appliance posted their acceptance letter on the
same day. The acceptance letter from Bright Electric Appliance arrived at All
Fortune Ltd on 16th December. On the other hand, the revocation letter from All
Fortune arrived at Bright Electric Appliance’s office in London on December 14th.

Required
a) Explain whether Bright Electric’s reply “lowest price is HK$ 8,000 per unit” is
an offer or an invitation to treat, assuming the correspondence is governed by
Hong Kong contract law.
b) Explain whether an acceptance takes effect in this case. Please include case law
in the explanation.

Question 5
Mrs. Leung bought a water boiler from a manufacturer outlet. She found the
following words printed on the face of the invoice: “Goods sold cannot be returned.
The Store will not assume any responsibility for defect detected or any other liability
incurred in the course of customers’ using our goods after sale.” The water boiler
exploded when Mrs. Leung used it at home. Her eye was injured.

Advise Mrs. Leung

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