Quiz 1-4

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 Sources of law: sources of law in Australia do not include repealed statutes.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

2. 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.

3. 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.

4. 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.

5. 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.

6. Which of the following statements about consideration is correct? Consideration need

not be adequate.

7. 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.

8. 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.

9. Delegated legislation: Which of the following is not correct? Delegated legislation can
only be made by Government Ministers. Correct: 1. Delegated legislation is subordinate
legislation, 2. is made under the authority of an Act of Parliament, and 3. often contains
more detailed rules than those of the associated Act.

10. 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. True: Lapse,
revocation before acceptance, or lapse where no time was stipulated.

11. Section 51 powers: Which of the following is not an area that the Commonwealth
Parliament has the power to legislate on under s51 of the Commonwealth constitution?
Education. Has power over 1. bankruptcy and insolvency, 2. foreign corporations, and 3.
banking and insurance.

12. Interpretation-extrinsic materials: In interpretation, extrinsic materials are allowed to

be referred to by a court.

13. Ratio decidendi: The ratio decidendi of a case is the reason given for deciding the case.

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

15. Native title: Native title was first recognised in the case of Mabo v State of Queensland
(No 2)(1992) 175 CLR 1.
16. 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.

17. 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.

18. 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.

19. Reporting obligations: What is a binding precedent? A decision of a court that brings
judges in a lower court in the same court hierarchy.

20. 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.

21. 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.

22. Australian Constitution: Which Act established the federal legal and political system and
converted the separate colonies into states? Commonwealth of Australia Constitution
Act 1900.

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.
32. Federal system: Which of the following statements is correct? Australia is a federal
system, with two legal systems for each citizen.

33. 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.

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

35. Substantive and procedural law: Substantive law refers to actual rights under the law.

36. The Age of Majority Act 1977 (Vic) reduced the age for contractual capacity of a minor
to 18.

37. Delegated legislation: An example of delegated legislation is the Corporations

Regulations 2001 (Cth).

38. 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.

39. Court hierarchy: Local or Magistrates Courts are the lowest courts in the state
hierarchy.

40. Which of the following statements about bilateral and unilateral contracts is not
correct? 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.

41. Criminal proceedings: An indictable offense is a more serious criminal offense.

42. Law reports: Where are decisions of the High Court of Australia found only online? In
the Commonwealth Law Report.
43. 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

44. 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.

45. 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.

46. Sources of law: the two main types of law in Australia are statute law and judgment-
made law.

47. 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.

48. 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.

49. 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.
50. Court hierarchy: The highest court in Australia is the High Court of Australia.

51. 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.

52. 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.

53. 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.

54. 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.

55. Constitution: Section 51 Commonwealth Constitution grants what type of lawmaking

power to the Commonwealth Parliament? Concurrent powers.

56. Royal Assent: The Governor-General on the Queen’s behalf gives Royal Assent to an Act
of the Commonwealth Parliament.

57. 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.

58. A qualified acceptance may also be known as a/an counteroffer.

59. 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

60. The legislature: Exclusive powers are those that can be exercised only by the
Commonwealth.

61. Sources of law – statute: Which of the following is incorrect? Statutes may not overrule
existing common law.

62. 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.

63. 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.”

64. 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.

65. The Executive Power: The Executive power is administered by the Queen, the Prime
Minister, and the Cabinet.

66. 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.
67. The postal acceptance rule can be impliedly excluded by offeror specifying actual
receipt of acceptance.

68. 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)

69. 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.

70. 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.

71. 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.

72. 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.

73. 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.

74. 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.

75. 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.

76. Australian Constitution : Which Act established the federal legal and political system and
converted the separate colonies into states? Commonwealth of Australia Constitution
Act 1900.

77. Common law: Which one of the following statements about common law is correct?
Common law is judge made law.

78. Business law: which of the following no longer regulates business or commercial law?
Trade Practices Act 1974 (Cth).

79. 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.

80.

Quiz 5-13

1. A party in breach of contract is liable to pay damages for losses occurring in the usual
course of things from the breach.

2. Which of the following statements is correct? A contract may be illegal as performed

where only one party performs it in an illegal manner.
3. Which of the following is not accurate? Duress involves: Duress must be the only reason
for entering into a contract. Correct: 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.

4. 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). 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.

5. Which of the following is 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. True: 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.

6. Which of the following 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.

7. No fault on the part of either party is an element required for the doctrine of
frustration to operate.

8. 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.

9. The term “transparency” in unfair contracts means it is expressed in reasonably plain

language that is readily available to the affected party.
10. Where a contract restricts one party from exercising their trade, it may be valid
provided it was e reasonable as between the parties and the public.

11. 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. Which of the following is not true? The court will
always uphold restraint of trade provisions in contracts for sale of business. 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.

12. In determining whether a statement has become a term of the contract, the key test
applied by the courts is contractual intention.

13. In which case did the court recognise that damages for disappointment and distress
could be available subject to certain limitations? Baltic Shipping Co v Dillon (1993) 176
CLR 344.

14. 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.

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

16. 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.

17. Which of the following statements about the parol evidence rule is true? It does not
apply where it can be shown that the written contract was not intended to be a
complete record of the agreement.
18. 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.

19. With respect to substantial performance and partial performance, partial performance
is where a party voluntarily accepts less than full performance by the other party.

20. 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).

21. 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.

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

23. Which of the following is NOT a method of termination? Rectification.

24. Parol evidence may not be admitted in which of the following circumstances? To
contradict an unambiguous term.

25. 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.

26. 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

27. 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.

28. 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.

29. Compensatory damages are also known as actual/ordinary damages.

30. 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.

31. Which of the following is a circumstance where specific performance would be ordered?
Where the subject matter of the contract is an apartment in a complex of 20
apartments.

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

33. Which of the following are not usually compensated for with payment of damages?
Injured feelings/ disappointment.

34. Which of the following is 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.

35. 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.

36. 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.

37. 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

38. Criminal proceedings may be brought for unfair practices.

39. 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.
40. 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.

41. 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.

42. 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.

43. 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.

44. Which of the following is correct? Damages must not be too remote from a breach.

45. 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.

46. 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.

47. 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.

48. 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.

49. Which of the following statements is correct with respect to mistake? Rectification is a
remedy for certain types of mistakes in written contracts.

50. The definition of “consumer” is limited by what amount? Recently increased to

$100,000.

51. Which of the following are sources of illegality? Statute and common law.

52. When a contract is made orally, the question of what the express terms are is a
question of fact.

53. 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.

54. 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).

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

56. 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.

57. 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.

58. 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.

59. 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.

60. 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.
61. Non est factum means it is not [my] deed.

62. Which of the following is an element required for the doctrine of frustration to operate?
No fault on the part of either party.

63. 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.

64. 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.

65. Which of the following statements is correct? An exemption clause is a term that
excludes or limits the liability of one or more parties.

66. 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.

67. 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.

68. Where a contract is made in writing, the express terms of that contract are generally to
be found in the writing.

69. 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.

70. Which of the following is incorrect? Repudiation is the same as termination; the
contract is at an end.

71. 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.

72. Which of the following statements is not correct? With respect to legality of object,
illegal objectives will not affect a contract provided both parties have agreed to it.

73. 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.

74. 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.

75. A divisible contract is one that provides expressly or impliedly that performance is due
after the other party has performed stages of the contract.
76. 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.

77. 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.

78. 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.

79. 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.

80. 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.

81. 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.
82. Which of the following guarantees applies to a sale by auction? Guarantee as to title.

83. When are nominal damages awarded? A legal right has been infringed but there is no
actual loss.

84. 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.

85. 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.

86. Which of the following is a way that a contract may be terminated by operation of law?
Where a party to a delivery of goods contract becomes bankrupt.

87. 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.

88. 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.

89. 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.
90. Exemplary damages might be ordered as a penalty where there has been an
intentional breach.

91. 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.

92. 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.

93. 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).

94. Which of the following is correct? When the parties’ obligations under a contract have
been discharged then so has the contract.

95. 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.

96. Which of the following is not an equitable remedy? Exemplary damages. Equitable
remedy: 1. Injunction, 2. Specific performance, and 3. Restitution.
97. 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.

98. How is repudiation determined by the court? Objectively.

99. 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.

100. 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.

101. 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.

102. 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.

103. 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”.
104. 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.

105. 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.

106. Which of 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.

107. 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.

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

109. Which of 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.

110. 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.
111. 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”.

112. 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.

113. 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.

114. Why are late payment charges on credit cards not penalties? Banks penalties on cards
are legitimate to cover their costs.

115. 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.

116. 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.

117. 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.

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

119. 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

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

121. 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

122. 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.

123. 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.

124. 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.

125. Which of the following is not a valid assignment of a contract? A contract for personal
services.
126. Which of the following is correct? When the parties’ obligations under the contract
have been discharge, then so has the contract

127. 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.

128. 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.

129. 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

130. 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.

131. Which of the following sections of the Australian Consumer Law are relevant to
misrepresentation? Sections 18 and 29.

132. Terms may not be implied into a contract by representations

133. 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

134. 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.

135. 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.

136. Which of 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.

137. 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.

138. 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. Which of the following is true? If the contract is divisible,
Cathy is entitled to payment for the work she has done.
139. 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.

140. 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.

141. It is important to distinguish between representations and terms because damages can
only be awarded for fraudulent or negligent misrepresentation.

142. Which of 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.

143. Which of the following is not an exception to privity? Employment. Exception: 1.

Insurance, 2. Agency and trust, and 3. Property Law.

144. 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.

145. 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.

146. 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.

147. 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.

148. 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.

149. Which of the following is not a way to discharge a contract? Through breach.

150. Who/what are exempt from the provisions of s18 of the Australian Consumer Law?
Information providers such as media outlets.

151. 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.

152. Contingent conditions include conditions subsequent and conditions precedent.

153. 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.

154. 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.
155. The parol evidence rule performs much the same function as a merger clause.
156. A party repudiates contract when the party is able but unwilling to perform
their obligations under it.
157. 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.
158. 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.
159. 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.
160. 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.
161. 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.
162. Which of the following is not correct? A criminal penalty can be sought for a breach of s
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
163. 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
164. 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.
165. 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.
166. The Australian Consumer Law definition of “supply” does not include gift. Include: 1. Re-
supply, 2. Exchange, and 3. Lease.
167. 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.
168. 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.
169. 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.
170. 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.
Quiz 14-15

1. To claim damages a causal link must be established between what two things? The
defendants breach and the plaintiff’s injury.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. The “neighbour principle” is often viewed as a test of the foreseeability of harm.

8. 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.

9. 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.

10. 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.

Quiz 16-17

1. 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.

2. 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.
3. 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.

4. 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.

5. Which finding is correct?: In Popat v Schonchhatra (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.

6. 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.

7. 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.
8. 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.

9. Which legislation regulates partnerships in NSW? Partnership Act 1892 (NSW) [or
Partnership Act 1958 (Vic) if there is no (NSW) after Partnership Act 1892]

10. Legislation in Victoria: What Act regulates partnerships in Victoria? Partnership Act
1958 (Vic)

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.
18. 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.

19. 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”.

20. 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.

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

22. 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.

23. 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.

24. 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.

25. 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.
26. 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.

27. Cribb v Korn (1911) 12 CLR 205 established the sharing of joint returns does not in itself
create a partnership.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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.

38. Which legislation controls the actual registration of the firm name? Business Names
Registration Act 2011 (Cth).

39. 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.