Exam Answers - Commercial Law for Tax Agents PDF

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Commercial Law for Tax Agents...

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Monarch Institute Independently Supervised Written Exam

Commercial Law Instructions: 

This assignment contains multiple Assessment Activities

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You are required to attempt all questions.

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Please complete the Declaration of Authenticity and the Declaration of Independent Supervision (below)

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Save this assignment (e.g. on your desktop)

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To complete the assignment, read the instructions for each question carefully.

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You may be required to refer to your learning materials or other sources to complete this assessment.

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You are required to type all your responses in the spaces provided

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Once you have completed all parts of the assignment and saved it, login to the Monarch Institute LMS to submit your assignment for grading

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To submit your assignment click on the link “Submit Written Exam - Commercial Law” in the Exam section of your course and upload your assignment file.

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Please be sure to click “Continue” after clicking “Submit”. This ensures your Exam has been sent and that your assessor receives notification of your submission – very important!

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Declaration of Understanding, Compliance and Authenticity * “I have read and understood the assessment instructions provided to me in the Learning Management System and within this document. I certify that the attached material is my original work. No other person’s work has been used without due acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism.”

Independent Supervision of Assessment In accordance with the requirements of the Tax Practitioners Board (TPB), you are required to complete your assessment for this unit under some form of independent supervision.

Declaration of Independent Supervision *: "I declare that I have completed this entire assessment under independent supervision in accordance with the requirements of the Tax Practitioners Board."

Student Name*:

Date:

* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the above student declarations.

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Important assessment information Aims of this assessment This assessment focuses on assessing learners for their knowledge and performance in regard to Commercial Law for the purpose of meeting the education and independent assessment requirements of the Tax Practitioners Board (TPB). This particular assessment forms part of your overall assessment for the following unit(s) of competency: TPB Approved Course Units of Competency: 

MCL001 Contract and Consumer Law

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MCL002 Corporations and Trusts Law

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MCL003 Property Law

Being equivalent, respectively, to: 

FNSTPB503 Apply legal principles in contract and consumer law

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FNSTPB504 Apply legal principles in corporations and trusts law

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FNSTPB505 Apply legal principles in property law

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Expectations from your assessor when you are answering different types of assessment questions: Knowledge based questions A knowledge based question requires you to clearly identify and cover the key subject matter areas raised in the question in full as part of the response. Performance based questions A performance based question requires you to clearly demonstrate your ability to complete certain tasks, that is, to perform these tasks.

Marking and feedback This assignment contains multiple Assessment Activities each containing specific instructions. You are required to attempt all questions. Grading for this assessment will be deemed “Competent” or “Not Yet Competent” in line with specified educational standards under the Australian Qualifications Framework.

What does “Competent” mean? Answers assessed as ‘Competent’ contain relevant and accurate information in response to the question/s with limited serious errors in fact or application. If incorrect information is contained in an answer, it must be fundamentally outweighed by the accurate information provided. This will be assessed against a marking guide provided to assessors for their determination.

What does “Not Yet Competent” mean? Answers assess as ‘Not Yet Competent’ are those assessed as not meeting the marking guide standards provided to assessors. These answers either do not address the question specifically, or are wrong from a legislative perspective, or are incorrectly applied. Answers that omit to provide a response to any significant issue (where multiple issues must be addressed in a question) may also be deemed Not Yet Competent. Answers that have faulty reasoning, a poor standard of expression or include plagiarism may also be deemed Not Yet Competent. Please note, additional information regarding Monarch’s plagiarism policy is contained in the Student Information Guide which can be found here: http://www.monarch.edu.au/student-info/

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Assessment Activities - Short Answer and Worked Answer Questions Covering Units of Competency: (MCL001) FNSTPB503 Apply legal principles in contract and consumer law (MCL002) FNSTPB504 Apply legal principles in corporations and trusts law (MCL003) FNSTPB505 Apply legal principles in property law The following questions are based on the material in all of these textbooks:   

'Contract and Consumer Law' by Penelope McCann, 1st Edition (January, 2016) 'Corporations and Trusts Law' by Penelope McCann, 3rd Edition (January, 2016) 'Property Law' by Penelope McCann, 1st Edition (January, 2016)

Activity instructions to candidates        

This is an open book assessment activity. You may be required to refer to your learning materials or other sources to complete this assessment. You may use a financial calculator or computer application to help calculate values You are required to read this assessment and answer all questions that follow. Please type your answers in the spaces provided. Please ensure you have read the “Instructions’ and “Important assessment information” at the front of this assessment Time allowed for pre-reading only (not for attempting of assessment activities) of the assessment instructions: 15 minutes Time allowed for completion of this assessment activity: 2 hours (excludes the pre-reading time).

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The following questions are based on the material in the textbook 'Contract and Consumer Law': Question 1 (Contracts and Consumer Law) What is the difference between a mutual mistake and a unilateral mistake? Give an example of each. A mutual mistake is a mistake of fact made by both parties where both parties make different mistakes. This mistake can make a contract voidable when the mistake or confusion goes to the essence of the contract and it can be determined that there is no true meeting of mind. For example, let’s assume Zaki buys and restores old or abandoned motorcycles and he has agreed to sell one of those restored motorcycles to Mike for $5000. Due to some confusion, Jordan thinks he is selling a 2000 Yamaha R1 while Mike thinks he is getting a 1998 Kawasaki ZX-10R for the price. Here, both parties have made a mistake of fact and it’s different. Also, there is no true meeting of the mind here because either party thinks they are buying/selling some other thing. So, the contract between them is not binding and it maybe voidable.

On the other hand, a unilateral mistake is a mistake of fact made by only one of the parties but where the other party either knows or ought to have reasonably known of the mistake and does not inform the mistaken party. Here, the contract maybe voidable if the mistake has a huge effect on the mistaken party’s bargaining position. Sometimes the courts may just void them altogether. Let’s assume now that Mike is contracting with Adam regarding the motorcycle and he thinks that Adam is actually Zaki but he only wants to contract with Zaki because he is a reputed restorer which instils some confidence. If Adam is aware of this mistake that Mike has made and fails to inform Mike, when Mike does find out about this mistake, he could have the contract voided. In this instance, it’s a unilateral mistake as to the identity of one of the contracting parties.

Question 2 (Contracts and Consumer Law) How does a court determine which jurisdiction applies when interpreting and enforcing an econtract?

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E-contracts are governed by the Electronic Transactions Act 1999 (ETA) and the relevant parallel state legislations which provide a legal framework for businesses and consumers that engage in ecommerce. The courts can use the Australian Consumer Law (Competition and Consumer Act 2010) and this act to determine the jurisdiction of electronic contracts. The jurisdiction for contracts lies where the contract is formed and as a general rule, a contract is formed in the jurisdiction where acceptance is received thereby, the relevant state or country’s laws are applied to enforce the agreement. Similarly, for an electronic contract, the jurisdiction is the place where acceptance of the offer is received unless the parties decide otherwise. In order to determine where the acceptance of the offer occurs, we could use the ETA. ETA s14 (3) spells out that an electronic communication is received when it is capable of being retrieved at the designated address or when it comes to the attention of the contracting party when there is no designated address given as in ETA s 14(4). As it usually occurs, online contracts are formed over the internet via ‘click wrap’ methods where the offeror sends a webpage or a dialog box with links to or text describing the terms and conditions of the contract and clicks on an ‘I accept’ button or something similar. It is at this point where the electronic contract is formed and which ultimately determines the jurisdiction of the contract.

The following questions are based on the material in the textbook 'Corporations and Trusts Law': Question 3 (Corporations and Trusts) Why are limited liability companies required to have the word 'Limited' or 'Ltd' in the company name? The word Limited or Ltd. Forms part of the legal nomenclature to be included with the name of the company on its seal, displayed in its registered office and all its business dealings. This is a statutory requirement under the Corporations Act 2001 s148 (company’s name) and s149 (acceptable abbreviated forms) which governs all companies that operate under the Australian law and is enforced or administered by the Australian Securities and Investments Commission (ASIC). The name is also indicative of the company’s legal status to various parties whose vested interests lie with the company. A few examples include: Investors who wish to invest monies would be made aware as to the extent of liability they would face if the company were to be engaged in litigation. Creditors would be informed regarding their rights or involvement if the company defaults or were to go belly-up and liquidate. As a general rule, it indicates to the public the extent to which the people behind the veil of the company are liable for any of their grievances such as law suits for damage or negligence.

Question 4 (Corporations and Trusts) An essential characteristic of a trust is the 'dual ownership' of trust property. What does this mean?

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A trust is a structure enforceable under equity law where a person or legal entity, the trustee becomes the legal owner of some property. The trustee is also tasked with using that property for the benefit of specific people, the beneficiaries. So, the beneficiaries have equitable ownership of the property in a trust. Although the trustee has legal ownership and control of the property, it is bestowed on the condition i.e. equitable obligation that those powers be used to deal with the property in such a manner as to benefit the beneficiaries. The beneficiaries reserve the right or are entitled to enforce this equitable obligation of the trustee. These elements generally form the terms of the trust. So, the trust creates a fiduciary relationship between the trustee and the beneficiary. Although the trustee has legal ownership and control of the property, the equitable obligation transfers some control to the beneficiaries, thus making them equitable owners. This forms an essential characteristic of trusts which is the dual ownership of the trust property.

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The following questions are based on the material in the textbook 'Property Law': Question 5 (Property Law) What is the difference between mediation and arbitration? Both mediation and arbitration are forms of Alternative Dispute Resolution (ADR). ADRs are alternative and often preferable to expensive and time consuming litigation procedures. They are also preferred when the disputed parties have on-going business dealings. Mediation is where the parties in dispute, with the help of an impartial third party, will accept responsibility and attempt to resolve their issues in an informal setting. Arbitration, on the other hand, is where the parties in dispute, will submit their cases to an impartial third party to decide on it.

The difference between mediation and arbitration is in their processes. While a mediator cannot decide or directly settle the dispute, they may assist the parties in discussing the issues and reaching a possible resolution. That resolution can then be enforced as a contract between the parties. In Arbitration, the third party, the arbitrator is bound to follow guidelines made or accepted by the parties in dispute and decides on how to resolve the dispute. The parties are then bound by the decision of the arbitrator. This process is resemblant of court procedures but the conduct of all parties here maybe a bit more informal.

Question 6 (Property Law) What is the difference between 'factual causation' and 'scope of liability'? Once it has been established that the defendant owes a duty of care to the plaintiff, has breached the duty of care and the plaintiff has suffered some damage, there are two more crucial elements that plaintiffs are burdened with to prove and under the civil liability acts, these are factual causation and scope of liability. It is the burden of the plaintiff to establish that the negligent conduct of the defendant was key or a necessary condition for the occurrence of the damage or harm i.e. the negligence led to or caused damage, this is factual causation. The ‘but for’ test under common law best related to factual causation. Next, a plaintiff has to establish that a person’s negligent conduct makes him liable for the harm that has been caused. It is similar to the remoteness of damage which is determined under common law. The idea is to determine whether or not the negligent party is responsible, whether the resulting damages were foreseeable enough and if so, to what extent. It also implicitly limits the extent to which the plaintiff can claim damages from the negligent party ensuring that they do not claim more than what they are actually entitled to, just to pose an additional burden on the defendant (taking revenge).

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