Business Law: Contract and Torts Case Studies and Research Topics

Intention to Create Legal Relations and Breach of Contract

1: Reseach

A business agreement was drawn up between the parties, containing a clause which specifically stated there was no intention to create a legally binding agreement and that it was merely a record of the express thoughts of the parties concerned. In summary, the written understanding between them was not entered into as a legal agreement but was merely an honourable pledge based on mutual loyalty and friendly co-operation. One of the parties then used the agreement as the basis for a breach of contract action.

Explain whether an intention to create legal relations existed.

2: Research

Identify the main branches of law which are of most concern and relevance to people engaged in business. explain reason for your selections.

3: Case study

James sold his 1965 e-type jaguar car to Shirley for $18,500. During the negotiations James claimed that the car was actually a 1963 model, which were rarer, and therefore more valuable.

Shirley, who was 17 at the time of purchase, bought the car on the understanding it was the 1963 model.

Are all the elements of a valid contract present? Explain your answer.

4: Case study

Harris chose and paid for a 4-man tent from Smith’s Camping Equipment Co. Harris asked Smith, whose store closed at 6pm, to leave the tent outside the store front door, so he could pick it up about 6.15pm. Smith asked a café owner opposite the front door to watch over the tent. However, it was stolen at about 6.10 pm which the café owner was talking to one of his customers.

Harris wants to claim the purchase price from Smith.

Explain who, if anyone, is liable for the loss and why.

5: Case study

Arthur owns a property with a large back yard that is usually lit at night by bright floodlights. For months he has been asking local teenagers to stop using his yard as a ‘short-cut’ to the bus stop, but they continue to ignore him.

Arthur decides to install an in-ground swimming pool. Last Saturday night, after the pool contractor has spent the day excavating a large hole, Arthur decided not to switch on the floodlights. At 11 pm, one of the teenagers, Gerry, fell into the hole and suffered serious injuries.

Explain whether Arthur is likely to be liable in negligence.

6: Case study

Harriet went to Maurice’s computer shop for the first time and left her expensive laptop computer to be cleaned and upgraded. The shop was burgled, despite Maurice’s extensive security measures.

Maurice is a sole trader and does not have any insurance to cover the theft. He draws Harriet’s attention to a small sign in a dimly lit corner of the shop which says ‘No liability accepted’ and to an exclusion clause printed in small letters on the back of the receipt for the laptop. It states (in legal terms copied from the internet) that he will not be liable for loss or damage to goods left for service or repair under any circumstances.

Discuss, giving your reasons, if Harriet will succeed in gaining compensation from Maurice for the lost laptop.

7: Research

The sales manager at Harry’s Used Cars Pty. Ltd. advertised a 2013 Holden Calais ‘in excellent condition’ for $10,500. The advertisement also stated that a number of ‘good quality’ cars were being sold for prices ranging from $8,000 - $16,000.

In fact, the Calais advertised at $10,500 required considerable body repairs and a complete paint job, and the next cheapest car was priced at $14,000.

Briefly explain which provisions of the Competition and Consumer Act 2010 have been breached.

8: Case study

Thomas, a salesman, enters Jimmy’s yard even though there is a sign outside that says “No salespeople allowed’. Jimmy, who is much smaller than Thomas, threatens him with a broom handle. Thomas wrestles with Jimmy and in the process damages a valuable antique chair on the front porch.

Advise each party of their legal rights.

9: Research

Explain the term ‘strict liability tort’, providing an illustrative example.

10: Research

Explain the main functions and powers of the Australian Competition and Consumer Commission (ACCC).