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Understanding Business Law, 8th edition by Stephen Graw, David Parker, Keturah Whitford, Elfriede Sangkuhl, Christina Do Tutorial Questions with Guided Responses for Lecturers Created and updated by Keturah Whitford © 2017 Reed International Books Australia Pty Limited trading as LexisNexis. Permission to download and make copies for classroom use is granted. Reproducing or distributing any material from this website for any other purpose requires written permission from the Publisher.

Chapter 5 Contracts: Interpretation 1. Hoasts Ltd entered into a 5 year lease of hotel premises to Zircon Ltd. Charlotte, on behalf of Hoasts, negotiated the lease terms with Ruby from Zircon. Ruby said to Charlotte that, because of the cost of refurbishment, Zircon would want a right to renew for a further 5 year term. Charlotte responded, “Understood. I will give our solicitors instructions today to draw up the lease.” The lease was drawn up and signed on behalf of both companies but no right of renewal for a further 5 year term was included in the lease agreement. Hoasts have indicated that they are not proposing to grant a renewal of the lease term to Zircon. Advise Zircon. 2. Moses leased a waterfront restaurant to Genevieve, a TV chef, who was proposing to operate an upmarket seafood restaurant. Both parties believed that the NSW government would grant a licence to Genevieve for the use of the jetty and pontoon at the front of the premises. The previous operators of the restaurant had a licence for the jetty and pontoon and received considerable trade from people arriving by water taxi from 5 star hotels located nearby. The lease was silent on the issue of the jetty and pontoon licence. The lease was not expressed to be conditional upon the granting of the jetty and pontoon licence to Genevieve. The state government rejected Genevieve’s application for a licence for the jetty and pontoon on environmental grounds due to the proposed number of visitors. Genevieve seeks your advice. She says surely it was implied that the lease was conditional upon the granting of the licence. Without boat access her patronage will be much reduced.

3. Rovere Pty Ltd agrees to make an unsecured loan of $10,000 to Fauntleroy Pty Ltd for a term of three years on terms applied by ABC Bank Ltd to its commercial customers on unsecured loans of three years. It turns out that ABC Bank does not have a standard set of loan terms for three year loans to commercial customers. Rovere wants to back out on the arrangement. Is there a binding contract?

Understanding Business Law, 8th ed, Tutorial Questions with Guided Responses, Chapter 5 © 2017 Reed International Books Australia Pty Limited trading as LexisNexis. Learning materials created and updated by Keturah Whitford.

4. While on holidays in Western Australia, Amy went online to Concertik to buy tickets to a concert for the visiting folk singer Willow. She checked the box confirming she had read the terms and conditions, which were available if she clicked on a hyperlink provided, when she hadn’t actually read them. The terms and conditions provided that in the event of cancellation for any reason whatsoever the purchaser will be entitled to a credit of the amount paid which can be used for any other show booked through Concertik. The credit is valid for 12 months. The following day Amy collects her tickets from a Concertik office. She doesn’t read the writing on the back which says that in the event of cancellation for any reason whatsoever the purchaser will be entitled, at the purchaser’s option to either a full refund or to a credit of the amount paid which can be used for any other show booked through Concertik. The credit is valid for 12 months. Willow cancels the concert on the night Amy has booked to see it, due to being distressed. She had been travelling in a taxi earlier in the day which had run over and killed a cat. When Amy takes her ticket to Concertik’s office she is told that she can obtain a credit which can be used any time in the next 12 months. Amy is about to head home to Sydney and Concertik only operates in Western Australia and so she will have no opportunity to use the credit. She seeks your advice as she has now read the back of the ticket which says she has the option of a full refund. Advise her. You do not need to consider the potential application of the Australian Consumer Law. 5. Tui went to the Royal Show. He paid for a ticket on the Tower of Terror ride. The attendant said to him, “You need to read the back of the ticket as we won’t be responsible if your phone or wallet falls out of your pocket on the ride.” Tui went on the ride and due to a faulty seat belt he fell from the ride and was injured. The operators of the ride point to an exclusion clause on the back of the ticket which, among other things, excludes liability to ride users for any negligence on the part of the operators. Advise Tui whether the clause is part of the contract and whether the ride operator would be able to rely on it to exclude their liability in negligence.

Understanding Business Law, 8th ed, Tutorial Questions with Guided Responses, Chapter 5 © 2017 Reed International Books Australia Pty Limited trading as LexisNexis. Learning materials created and updated by Keturah Whitford....