LAW 1510 Contract Law Primary 2020 exam PDF

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Download LAW 1510 Contract Law Primary 2020 exam PDF

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Course ID: 109187

Page 1 of 3

Primary Examination for the University of Adelaide Semester 2, 2020

109187 (course id)

Total Duration:

Contract Law LAW 1510

190mins

Instructions for Candidates: 

This is a non-invigilated open-book examination..

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Please ensure that you save your Word document regularly and that you clearly label which question you are answering.

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You must submit your Word document within the allocated time for this online examination using the ‘Submission’ link in the ‘Exam’ course on MyUni. You will not be able to submit after the allocated time.

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If you experience a problem and you're not sure what to do, please contact the Online Exams Call Centre on +61 8 8313 3311.

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Please answer both Question 1 and Question 2.

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The answers to Questions 1 and 2 are each worth 50% of the total mark for the exam.

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Please note that in answering these questions, you need not raise or address any of the issues studied in the parts of the course dealing with Formation, Preliminary Agreements, or Privity. Nor should you discuss any possible arguments in estoppel or for unconscionable conduct, nor any claims that might be made under the Australian Consumer Law or any other applicable legislation.

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Course ID: 109187

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QUESTION 1 Naomi owns a cafe in Adelaide. It is currently closed, as someone diagnosed with COVID-19 has dined there. For it to be reopened, the premises must be given a deep clean and pass an inspection by the local health authorities. After doing some internet searches, Naomi settles on Tycho Ltd to do the cleaning, because Tycho is based nearby and offers cheap rates for exactly this kind of work. Naomi fills out a form on Tycho’s website. She is contacted by one of their representatives, Fred, to whom she explains what is needed. Fred agrees to send two cleaners to clean the café and then sends Naomi an email to confirm the job. When the cleaners arrive, Naomi stresses how important it is that they do a thorough clean, because if the cafe is not given the clearance to reopen soon, Naomi is likely to run out of money and will have to close the business. Naomi leaves the cleaners to their work and heads off to attend to other matters. By the time she returns, they have left. She does a quick check and, satisfied they seem to have finished, arranges for a health inspection. But the inspection reveals that one of the toilets has not been cleaned and accordingly no clearance is given for the cafe to reopen. Advise Naomi in the following three alternative scenarios: (a) Naomi refuses to pay the invoice Fred has sent her. She engages another cleaner to do a full clean of the café for a fee 30% higher than Tycho’s, gets the health clearance, and is able to reopen. Tycho is demanding payment of the original fee. (b) Before Naomi can arrange another cleaner, her lack of income causes her bank to withdraw support and she has to close the business, which may or may not have been able to trade profitably. The stress of the situation causes Naomi to fall seriously ill. She demands compensation from Tycho, who she has already paid for the cleaning. But Fred points out that his email had contained a prominent link to a set of terms and conditions that had also been mentioned on the website form. Among the terms, which Naomi had not bothered to read, is the following: “Please be sure to inspect our cleaners’ work when they finish. If you are not happy, they will do their best to rectify any problems. But we cannot take responsibility for any failings not drawn to their attention while at your premises.” (c) Fred agrees to send someone to clean the toilet that had been missed, but only if Naomi pays the original fee, plus 20%. She agrees under protest, after which the cleaning is finished and the café is reopened. Naomi wants to know if she can get the extra amount back. Please note that these three questions should not necessarily be seen as demanding answers of equal length.

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Course ID: 109187

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QUESTION 2 Amos owns a security business. Most of his existing clients are in the hospitality industry and the pandemic has led to a reduced demand for security services. Accordingly, the business is struggling. Amos discusses his problems with his accountant and long time financial adviser, Cris, who surprises Amos by offering to buy the business from him. After some discussion, Cris persuades Amos to sign a written contract of sale which Cris has prepared. It provides for her to pay the purchase price according to the following schedule: 1. 15% at the time of signing the contract 2. 20% a month later, and 3. the balance of 65% after Amos transfers the assets of the business to Cris, which must happen three months after the contract is signed. Advise Amos in the following three alternative scenarios: (a) The sale is completed, with all payments made and the business assets transferred. Amos then tries to seek advice from Cris about how best to invest the purchase price. Unable to contact her, he finds another advisor, who shocks him by saying that the price Cris paid for the business was far less than its market value. Amos sends a series of emails to Cris to raise this concern. By the time he gets an answer from her, he discovers that Cris has sold the business to another of her clients, Jules, for a much higher price. Amos wants to know if he can get his old business back. (b) After the sale is completed, Cris becomes concerned that the business may not be worth what she agreed to pay. When discussing the possible purchase, she had asked Amos about how the business was going before the pandemic. “Oh, it was great”, Amos had answered, “I had heaps of clients. I’m sure you’ll have no problem getting them back once everything opens up again.” Cris has now discovered that while Amos had many clients, the two largest had decided to take their business elsewhere, just before the pandemic. Amos is concerned about what Cris might do now that she knows that. (c) Cris has paid the first two parts of the purchase price, but is struggling to find the money to complete the sale. She asks Amos for more time and is twice given an extension. But on a third occasion, when she is seeking an extra two days, Amos refuses and tells her that the sale is off. He wants to know what his rights and responsibilities might be in this situation. Please note that these three questions should not necessarily be seen as demanding answers of equal length.

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