Final Exam October 2020, questions and answers PDF

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LAWS1100 Business Law – Semester 2, Year 2020 S4507199 Ziyao Wang Word Count: Question 1: 1057 Question 2: 830 Question 3: 701

Final Examination Question 1 Issue 1 Was there negligence on the part of Sally? Was Terry operating within the requisite speed limit? Is Sally responsible for the loss of future earnings as Terry lost to opponent? Law

Element 1: Negligence -

A person commits the tort of negligence if they carelessly cause harm to another person.

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Most acts that cause harm to other people are the result of carelessness rather than intent.

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Negligence is by far the most common tort in society.

There are 3 different stages that must be considered in any Negligence case. A person commits the tort of negligence if: 1. They (the Defendant) owe the other person (the Plaintiff) a duty of care; 2. They (the Defendant) breach the duty of care – the standard expected is that of the ‘reasonable person’; 3. The breach of duty causes the other person (the Plaintiff) to suffer loss, damage or injury, and the injury was caused by the breach (known as causation). The first Common Law case to clearly establish the Tort of Negligence – Donoghue v Stevenson [1932] AC 562 Element 2: Duty of Care Examples of Established Common Law Categories: 1. Motorists owe a duty of care to other road users; 2. Doctors owe a duty of care to their patients; 3. Accountants owe a duty of care to clients; 4. Bankers owe a duty of care to their clients; 5. Manufacturers of products owe a duty of care to their customers; 6. Occupiers owe a duty of care to people who come onto their premises;

7. Employers owe a duty of care to their employees. Application

According to the facts in the case, Sally was driving 20 km above the speed limit in a road where there are other users whom she owes a duty of care. Sally was not careful enough while driving in a public road where she ought to have driven more carefully. Drivers have a duty of care to be on the lookout as in the case of Steed v McDougall [2019]). In this case, a driver breached his duty of care for failing to keep a proper lookout when he was reversing his car from the driveway and, as a result, collided with a post on a motorbike. For Terry to sue for the damages regarding the bill she has paid in the hospital together with the medication, she has to prove that there was negligence on the part of Sally based on three elements. The first is to prove that Sally owed her the duty of care on the road. Secondly, Sally breached the duty of care while using the road, and lastly, due to the breach of the duty of care, Terry suffered injuries. Regarding ownership of the duty of care, Sally drove above the speed limit imposed on all road users and could not keep a keen eye on the other road users, so that her vehicle got involved in an accident. She was a seasoned driver who ought to know how to navigate the roads even when there is pressure from a dying patient. Drawing from the ruling in Steed v McDougall [2019], the driver should have known that there are other users on the road, and they may be distracted, and driving above the speed limit could contribute to causing an accident. Additionally, Terry has to prove that Sally owed her a duty of care to be careful with other road users on the road. Sally must have breached the duty of care she owed to other road users, including Terry, when she increased the speed, thereby ramming into Terry's vehicle. As a result of Sally's breach of care, Terry suffered Injuries, loss, and damage. Duty of care can be argued from the Donoghue v Stevenson. In this case, Lord Atkin introduced the 'neighbor principle' where one is to love their neighbor, and one should not harm their neighbor. This case's remedies can be awarded on specific and general damages due to the injury suffered through the accident. The specific damages awarded will be based on the future income lost due to the injury if she can prove that she has been winning against her opponent except after the accident. In response to these claims, Sally can seek to reduce the amount she will pay damages by relying on the principle of contributory negligence since Terry was on earphones listening to music while she was driving. However, Sally has to prove that the earphones were attached to an external device with

music, and Terry could not hear her siren as she was approaching. In contributory negligence, the court will apportion the damages so that the remedies awarded will be reduced to the extent of the percentage that Terry contributed to the accident as she was wearing the earphones. Terry should be aware that even as she sues, her damages will be reduced to the extent she contributed to the acceded. On the remoteness of damages, Terry can argue that Sally could foresee that by over speeding, when could injure someone on the road and the damage caused may be fatal to lead to loss of future income. Terry suffered several fractures, and she was not as good at playing tennis as she was before the accident. Conclusion

Terry will be awarded damages as there is negligence on Sally, who was driving above the speed limit. Secondly, the damages awarded could be reduced based on the contributory negligence percentage due to Terry listening to music on earphones while driving. Sally can only defend herself on the contributory negligence principle to not pay the court's full amount. Remedies The court could order damages awarded be reduced based on the contributory negligence percentage due to Terry listening to music on earphones while driving. She would meet half the cost of medication as Terry pays the other. That is because while it is reasonably foreseeable that an accident can occur from reckless speeds, Sally could not foresee Terry getting addicted to prescription drugs and losing a tournament three years later. These are too remote and cannot be paid. Defenses Sally can only defend herself on the contributory negligence principle to not pay the court's full amount. That is because she was only half-liable to negligible. Had Terry been observant and bought side mirrors, this would not have occurred.

Question 2 Issue 1 Does angus have the capacity to enter into a legally binding agreement?

Is the non-compete agreement legally binding on the part of Angus? Can Jamie institute a promissory estoppel on Angus? Law

Element 1: Promissory Estoppel -

A promise must normally be contained in a legal agreement or contract and supported by consideration to be enforceable.

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However, the Courts have recognised that in certain situations, this requirement may lead to an unjust result.

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To address this concern, the Courts of Equity, developed the doctrine of promissory estoppel.

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The principle of estoppel may allow a promise to be enforced even though the formal requirements are not satisfied.

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The development of the concept of “promissory estoppel” in contract law has led to the proposition that

a court may decide that a “contract” has come into being even though the traditional rules for contract formation have not been satisfied.

Promissory estoppel will allow a promise to be enforced even though the promisee has not provided consideration for that promise – Equity prevails; -

See: Walton Stores v Maher and Another (1988)

Element 2: Capacity to Contract For a contract to exist, the parties must have contractual capacity. -

Certain persons or classes of persons, who lack the capacity to enter into a contract, are prohibited by law from entering into legal contracts.

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Main reason or rationale: to protect vulnerable people from the possibility of exploitation.

Element 3: Minors Any persons below the age of 18 years. There are two types of valid contracts with Minors: 1. Contracts for necessaries – Necessaries are defined as goods suitable to the condition in life of a minor and to the minor’s actual requirements at the time of sale and delivery. Ask yourself: “What is necessary for survival?” Necessities are determined by reference to a minor’s ‘existing life style’ and must be necessary for maintaining that lifestyle. See: Bojczuk v Gregorcewicz (1961) 2. Contracts for beneficial services – Contracts that are beneficial for a long term ability to earn income. See: Hamilton v Lethbridge (1912)

Application Angus is not yet eighteen years old to be considered to be having the capacity to contract. In common and statute, contracts entered with minors who are eighteen years old are voidable and nullified. However, there are exceptions as to when a contract with a minor is enforceable by law. Based on the Goods Act s7, a contract by minor for necessities is binding on both parties to the contract. The existing lifestyle of the minor is primarily used to determine the necessities that the minor needed to maintain the lifestyle identified. In the facts given in this case study, Angus had an interest in computers and Jamie offered him an opportunity to learn the computers. Jamie can go ahead and seek the intervention of the court in stopping Angus from working with Barry before the end of the three-year contract. The agreement reached upon with Jamie is valid as it was supplying Angus with the necessities, he needed to learn the computers. Based on Nash v Inman, while there was no capacity for the minor to contract, when the contract is for the supply of necessities, the minor will have the obligation to repay the supplier for the services rendered if they are for the necessities. For this suit to stand in court, it is upon Jamie to prove that the computer classes were a necessity in the lifestyle of Angus at the time of entering into the contract. Necessities are identified to be among them accommodation, food, clothing, medicine, education and instruction. Angus was given education on computers which is identified as a necessity I the law of Australia and queens land as in Nash v Inman (1908)2KB1 On the element of promissory estoppel, Jamie can rely on the non-compete agreements law which bars Angus from working around Alpha for a period of one year after quitting from Jamie. Angus committed that the was not going to go back on his contract as agreed with Jamie. Jamie can ask for remedies in this case where the court can ask Angus to perform the contract to the latter or pay Jamie for the period remaining and avoid working for Barry until the period of one year has expired. Conclusion Angus has been supplied with the necessities such as education and the contract is valid in law. Jamie can go ahead and ask Angus not to work for Barry as he is within Alpha and the period of one year has not expired as they had agreed in the contract prior. Jamie ca rely on the principal of promissory estoppel in compelling Angus from working for Barry Remedies The contract with Angus is valid on these grounds. The court can issue orders to rescind the contract and stop Jamie from hindering Angus’ contract with another firm. Defences Angus did not have any defense because it was implied that he accepted this is a beneficial contract.

Question 3 Issue 2 Do Black Dot Pty Ltd (BD) and Premium Ink Pty Ltd (PI) engage in cartel conduct? Do Black Dot Pty Ltd (BD) and Premium Ink Pty Ltd (PI) participate in price fixing? Whether BD and Stationery Works Pty Ltd (SW) misused their market power? Law

Element 1: s45AD, part IV of the Competition and Consumer Act 2010 (Cth) (CCA) regards a contractual agreement between two or more firms. The parties involved have the power to control prices and output, rig tenders and bids, and finally assign market regions, customers, as well as suppliers. Element 2: BD and PI decided to increase prices by 3% for ten years. The strategy was designed to discourage or eliminate competition between the two firms. To illustrate, similar prices gave room for customer preferences to define sales. In line with the ACCC v Alice (1997), firms payed a total of $1.5 million price fixing. Additionally, TPC v Email (1980) argues that price leadership strategy cannot be viewed as involvement among firms. However, BD and PI case is different because the two firms fixed prices to eliminate competition. Element 3: The objective of s46 of the CCA is to oversee organization with immense power in the market and involves in anticompetitive behavior. The law compels firms to be in a high competition state even if means hurting the handicapped firm. Application

Element 1: The case facts indicate that Black Dot Pty Ltd (BD) and Premium Ink Pty Ltd (PI) made a consensus agreement to raise the prices by 3% per year for 10 years. On top of that, the two firms agree to merge their efforts in controlling the market and avoid competition all cost. The agreement compelled to avoid selling from large corporations. The

case evidently brings about the happenings involving the ACCC v Visy (2007), whereby it was ruled that any engagement concerning the formation of cartels, discourages competition in a free market economy. Hence, the two firms stand chance of gaining more from the market without little interference by ACCC. If the cartel is realized by ACCC, the firms can face law which will interfere without their profit margins or operation. Because, formation of cartels only benefits the parties involved disregarding other firms within and without the market. For that reason, lack of competition between BD and PI attracts the attention of ACCC because the Australian Common law does not permit formation of cartels. Element 2: BD and PI decided to increase prices by 3% for ten years. The strategy was designed to discourage or eliminate competition between the two firms. To illustrate, similar prices gave room for customer preferences to define sales. In line with the ACCC v Alice (1997), firms payed a total of $1.5 million price fixing. Additionally, TPC v Email (1980) argues that price leadership strategy cannot be viewed as involvement among firms. However, BD and PI case is different because the two firms fixed prices to eliminate competition. Element 3: BD approaches the most lucrative purchaser of ink in Australia to discourage it from buying ink from Experion Pty Ltd (EPL). BD does so to avoid competition from EPL which is a new oversee company targeting the Australian market. BD commits a total of $250,000 annually to eliminate EPL from the Australian market. Based on the court ruling of ACCC v Ticketek Pty Ltd (2011), violation of the s46 of the CCA exposes the involved parties to consequences, such as $2.5 million fine imposed. Therefore, the fact that BD collaborated with SW to hurt EPL, it is clear the intentions were completely negative. Conclusion

1. BD and PI should face the consequences as stipulated under s45AD of the CCA. 2. BD and PI should face punitive measures for price fixing. 3. BD and SW abused their existing strengths in the market. Remedies

Possible remedies for the court include; compensation orders, probation orders, specific performance, and damages. The court should determine the value gained the cartel-conduct to inflict a fine in excess of $10 million. Otherwise, the court should fine the firm 10% of the revenue in accordance with s76 of CCA. Defences The two companies can request the merger as a defense of their actions....