LEGAL

Question 1

Distinguish between verbal and written contracts?

Answer 1

Written contracts provide more certainty for both parties. Written contracts clearly state what is being agreed to and signed.

Question 2

What is a contract?

Answer 2

A written or spoken agreement, intended to be enforceable by law.

Question 3

Distinguish between offer, acceptance and consideration as elements of a contract.

Answer 3

Offer: one party has made a promise to do or refrain from doing a specified action in the future.
Consideration: something of value was promise in exchange for the action or inaction.
Acceptance: the offer was accepted unambiguously, acceptance can be expressed through words, deeds or performance as determined by the contract, generally the acceptance must mirror the terms of the contract.

Question 4

What does “intention to form legal relations” mean?

Answer 4

An intention to enter a legally binding contract or agreement.

Question 5

Explain how written contracts can provide greater certainty than verbal contracts.

Answer 5

The existence of the contract cannot be denied, the terms are clearly stated in writing on a legally binding document.

Question 6

Explain the term “formalities” in the context of contracting.

Answer 6

A contract must meet relevant standards set out in the applicable legislation to be legally binding.

Question 7

Failure to perform as agreed

Answer 7

At least one party fails to meet the requirements and promised obligations according to terms within their contract.

Question 8

A breach of the terms

Answer 8

Party/s failure to uphold agreements within a contract.

Question 9

Mutual agreement to end the contract

Answer 9

Both parties involved in the contract mutually agree to terminate the contract without completing obligations.

Question 10

Frustration

Answer 10

Occurs when an unforeseen event or circumstance renders performance of the contract impossible or radically different from that originally contemplated by the parties.

Question 11

Illegality

Answer 11

A contract which either involves the commission of an illegal act or which in some other way is contrary to public policy, hence unenforceable.

Question 12

Repudiation

Answer 12

Occurs when a party involved in the contract demonstrates that they are not willing or unable to fulfil their initial obligations within the contract.

Question 13

Mutual mistake

Answer 13

When parties go a contract are both mistaken about the same material fact within their contract.

Question 14

Duress

Answer 14

Duress might relate to the person involved (eg, threatening to kill them if they do not enter into the contract), to the property of the other person (eg, threatening to burn down their house if they do not enter the contract).

Question 15

Undue influence

Answer 15

Looks at the quality of consent of both parties and whether their consent was given freely and voluntarily.

Question 16

Unconscionable conduct

Answer 16

Unconscionable conduct typically applies when a party to a transaction was under a special disadvantage, and another party knew and took advantage of this special disadvantage (eg. intoxicated, minor etc.)

Question 17

Fraud

Answer 17

Occurs when one party to a contract uses information that is false, misleading, or deceitful.

Question 18

Misrepresentation

Answer 18

Giving of false information by one party to the other before the contract is made, which induces them to make the contract.

Question 19

Impossibility

Answer 19

The terms of the contract are never able to be met (they are impossible) due to an unforeseen event occurring.

Question 20

Modification

Answer 20

Any contract can be modified before or after signing the agreement, but all parties must agree to these changes.

Question 21

Rescission of contract

Answer 21

Rescission is when a contract is rendered null and void, and so is no longer recognized as legally binding.

Question 22

Specific performance

Answer 22

An order directing the breaching party to perform an obligation as directed by the court.

Question 23

Modification/rectification of contract

Answer 23

Parties had a particular intention, which was not correctly reflected in their contract document.

Question 24

Injunction

Answer 24

An injunction is an order by the court for a party to either do, or refrain from doing, a particular act or thing.

Question 25

Damages

Answer 25

If one party does not follow their part of the contract, then they may be liable to pay damages to the other.

Question 26

Innocence (misrepresentation)

Answer 26

When a false statement is made by one party to another by genuine mistake and without the intention to deceive or mislead.

Question 27

Fraudulent (misrepresentation)

Answer 27

A false statement knowingly made with the intent to induce a subject to enter into a contract.

Question 28

Negligent (misrepresentation)

Answer 28

A negligent misrepresentation merely requires that one fail to exercise reasonable care or competence to obtain or communicate information that is true or false.

Question 29

Discuss the difference between misrepresentation and sales puff using an example.

Answer 29

Sales puff: exaggeration, sometimes to extreme levels to promote a product or service.

Eg. trying to sell a new car to a customer.

Misrepresentation: false or misleading information.

Eg. Selling the car, but lying about features that aren’t actually present.

Question 30

Explain the burden of proof and the standard of proof which apply in civil cases

Answer 30

The burden of proof is on the claimant, the claimant must prove the case against the defendant “on the balance of probabilities.”

The standard of proof (balance of probabilities) describes the amount of evidence necessary to prove an allegation in a trial. In a civil case, the standard of proof is lower than in a criminal case.

Question 31

Explain doctrine of precedent, using case law examples

Answer 31

The custom of the courts to stand by previous decisions, ensures court ruling remain consistent among similar cases.

E.g. Donoghue v Stevenson, establishment of duty of care and neighbour principle.

Question 32

Describe the different methods of resolving civil disputes, through judicial determination and alternative methods in courts, tribunals and independent bodies.

Answer 32

Court: A person or body of persons having judicial authority to hear and resolve disputes.

Tribunal: A special court or group of people who are officially chosen to examine legal problems of a particular time.

Independent bodies: People in the dispute present their case to an independent third person (arbitrator etc.) and are bound by that person’s decision.

Question 33

Price gouging

Answer 33

Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair.

Question 34

Describe the different methods of resolving disputes in civil proceeding (remedies).

Question 35

Innocent, negligent, fraudulent, give examples of each of these (cases/ sections of ACL).

Question 36

Section 21 of the ACL?

Answer 36

Provides that parties, must not, in trade or commerce, in connection with the supply or acquisition of goods or services, engage in conduct that is, in all the circumstances unconscionable.

Question 37

Section 58 of the ACL?

Answer 37

The manufacturer of goods must take reasonable action to ensure the facilities for repair and parts of goods are reasonable available for a reasonable period.

Question 38

Section 36 of the ACL?

Answer 38

A business is prohibited from wrongly accepting payment for goods or services that it does not intend to supply or is unable to supply.

Question 39

Section 52 of the ACL?

Answer 39

Protect the public from misleading or deceptive conduct and unfair trade practices which may result in contravention of the Act.

Question 40

Section 18(1) of the ACL?

Answer 40

Provides that “a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

Question 41

Section 20 of the ACL?

Answer 41

Prohibits a person from engaging in unconscionable conduct in trade or commerce “within the meaning of the unwritten law.”

Question 42

Section 21of the ACL?

Answer 42

Provides that parties, must not, in trade or commerce, in connection with the supply or acquisition of goods or services, engage in conduct that is, in all the circumstances unconscionable.