Presentation Case Study

1. GROUP 1 – ACCEPTANCE AND OFFER

On 10 January Martha wrote a letter to Jimmy offering to sell him her laptop computer for
$1000. Jimmy received the letter on 11 January and he replied by letter accepting the offer.
Jimmy posted the letter of acceptance first thing on 12 January. On the afternoon of 12 January,
Jimmy changed his mind and decided that he didn't want to buy the laptop. He then sent a fax to
Martha saying: “Changed my mind, ignore letter of 12 January”. Martha received the fax and
then sold the computer to Robert. On 14 January, Jimmy’s letter of acceptance arrived. On 15
January Jimmy phoned Martha to say that he had changed his mind again and that now he wants
to buy the laptop. Has a binding contract been formed between Martha and Jimmy?

Issues Whether there is a valid contract in the binding formed between Martha and
Jimmy?

Rules Rules of acceptance

● Acceptance must be communicated to the offer
● Can only be accepted by the offeree or authorized agent
● Acceptance must be absolute and unconditional
● Acceptance must follow method set out in offer (if not specified
-> assumption: acceptance will be the same form as the offer)
Postal rule: an offer in contract is expected to be accepted by post, the time and
place at which the acceptance is posted is the time and place at which the
contract will be taken to have been formed

Revocation of acceptance: an offeree can revoke an acceptance provided that

the revocation is communicated to the offeror before the acceptance is received.
Since the postal rule does not apply to the revocation of an acceptance, it is not
effective unless actually communicated to the offeror before the moment of
acceptance.

Application ● 12 January: Jimmy posted a letter of acceptance -> contract was formed
when the letter was posted
● Afternoon 12 January: Jimmy revoked acceptance -> effective as
communicated to Martha before the letter of acceptance arrive (14
January)

Conclusion There is no more binding contract between Jimmy and Martha anymore
VN Rules:
● Differing from Australian rules, the contract is expected to be accepted
by the time the offeror receives the letter of acceptance
● Rules relating to the making of an offer: an offer can be addressed to any
number of people
Application:
● Jimmy posted his letter of acceptance on 12/1 but until 14/1 Martha
received it
● During this time, Martha already sold the laptop to Robert
=> there is no binding contract between Martha and Jimm
2. GROUP 2 - MINORS
Applying Australian law to answer the following questions. Would your answer be
different if Vietnamese law apply? David is 16 years old. In May, David started a lawn
care business, and purchased two lawn mowers, one each from two different stores.
David used both of the lawn mowers for several months without any problems. Then he
began having trouble with the mower he bought from store A. The store made repairs and
the mower seems to be working properly, although he was without that mower for two
weeks. Although he has had no trouble with the mower from store B, he recently learned
that the price of $800 that he paid was $200 more than the mower was worth. It is now
October and David has decided that he wants to disaffirm both of the contracts for the
mowers. Can he do so?
Issues Whether David is bound by both contracts of purchasing mowers from
store A and B? Is he allowed to disaffirm both the contracts in this case?
Rules ❖ Contracts entered into by minor is voidable at the option of the
minor only, except for contracts for necessity or contract for
beneficial services
▪ Contracts for necessity: "not confined to articles necessary
for the maintenance of life but includes goods and services fit
to maintain the person in question at the standard of living
and in the position in life which he or she enjoys" (e.g. food,
drink, shelter, etc)
▪ Contract for beneficial services: " agreements relating to
services to provide the minor with a means of livelihood,
apprenticeship contracts or contracts relating to education"

❖ Contracts such as bill of exchange, security contract (in all States) or

contract for repayment for money lent or to be lent; or payment for
goods supplied or to be supplied (in Victoria) which are void
Applicatio The contract of purchasing the mowers between David and Store A/B is
n neither a contract for necessity (food, drink, shelter, anything to
maintain the basic needs) nor contract for beneficial services (i.e. a
means of livelihood, apprenticeship contracts or contracts related to
education). Thus, the contract of purchasing between David and Store
A/B is voidable, meaning that David is at the option
(i) avoid, disaffirm the contracts, and return the mowers to store
A and B
(ii) keep the contracts and continue to use the mower.

Conclusion The contract of purchasing between David and Store A is voidable at the
option of David
 (iii) avoid, disaffirm the contracts, and return the mowers to store
A and B
(iv) keep the contracts and continue to use the mower.

VN Laws

3. GROUP 3 - CONSIDERATION
Applying Australian law to answer the following questions. Would your answer be
different if Vietnamese laws apply?
Fabio collects 1960s furniture and has a lime green 1963 outdoor swing seat on his front
verandah. One morning, he discovers that the seat has been stolen. He puts up reward
posters around the neighborhood stating that he will pay “...a reward of $500 to anyone
who finds and returns the outdoor swing seat”. Chris sees the poster and whilst jogging,
he spots Fabio’s chair in the bush behind their street. Since he has to go to work, Chris
contracts a courier to retrieve the chair and deliver it to Fabio. The courier sees the poster
on the way to Fabio’s house and claims that the reward is his. Fabio refuses to pay
anyone the reward and states that the poster is not an offer anyway. Is Fabio correct? Is
Chris or the courier entitled to the reward?
Issues Is Fabio’s activity of refusing to pay anyone the reward and stating that
the poster is not an offer anyway correct?

Whether Chris is entitled to the reward?

Or whether the courier entitled to the reward?
Rules Rules of Offer:
- May be made to one or more people
- May be revoked or lapse
- Must be communicated to the offeree
- May specify conditions to be followed
- All major terms must be included Must be distinguished from
mere puff, invitations to treat, and statements supplying
information
Rules of Acceptance:
- Must be communicated unless waived or unless postal rule
applies
- May be by conduct but cannot be imposed by silence
- Special rules: postal acceptance and electronic communication
 - Can only be accepted by a person to whom offer directed
- Must follow any method set out in offer
- Must be unconditional
- Must be in response to the offer
Rules of Promissory Estoppel: Promissory estoppel is a promise that
cannot be lapsed regarding its objective is to relieve the detriment of
specific performance. To prove this is promissory estoppel, the claimant
needs to prove 6 requirements:
- The promisee assumed a legal relationship existed or not
- The promisor induced that assumption
- The promisee acted in reliance on that assumption
- The promisor know that the promisee intended to act in that way
- The promisee will suffer a detriment if the assumption is not fulfilled
- The promisor acted unconscionably in failing to prevent the damage to
the promisee
Rules on CONSIDERATION
A valid consideration occurs when the promisee does something in
exchange for promisor.

Applicatio The reward poster is an offer to the world that the offeror must pay the
n reward if someone acts upon requirements but no one is obligated to
perform. Thus, Fabio is obligated to pay the reward for whom finds and
returns the swing seat. Chris accepted the offer by conduct in response to
the offer: seeing the poster and contracting a courier to retrieve the chair
and deliver it to Fabio. Therefore, the contract is formed between Chris
and Fabio, meaning that the offer of Fabio and acceptance of Chris are
both valid.

In this case, Fabio is the promisor with the promise of paying $500 for a
person finding and delivering his stuff. Whereas, Chris is the promisee
that sees the poster Spot the chair and contracts to deliver to Fabio's
houses, meaning that Fabio is under contractual obligation to pay $500
for Chris who doing all thin
gs needed as described in the poster.
 It is unfair for Chris if Fabio is walked away from the promise.
According to promissory estoppel:
- Chris assumed a legal relationship existed, as shown by a poster;
in this case, Fabio is the promisor and Chris is the promisee.
- Fabio induced the assumption that he willing to pay the reward
$500 for anyone finding and returning his chair
- Chris spotted Fabio’s chair and contracted the courier to deliver
Fabio’s chair to Fabio’s house; Chris relies on the assumption
that if he finds Fabio’s chair and delivers to Fabio’s house as
information in the poster, Chris would receive the reward of
$500.
- Fabio knows that anyone who sees this poster intends to find and
return his chair regarding receiving $500.
- Chris will suffer a detriment for Chris’s specific performance
(i.e. time, money) if Fabio denies the reward.
- Fabio refused to pay the reward of $500, although Chris
performed everything that Fabio required in the poster. As such,
although the offer might lapse, in this case, Fabio is under a
contractual obligation to pay Chris $500 as promised.
In this case, the courier is the third party who is outside the contract
between Fabio and Chris (i.e. the courier only exists in the contract of
himself and Chris), so the courier is not entiled to the reward of Fabio.
Conclusion Because the poster is an offer made to the public, Fabio's claim that it is
not an offer was incorrect.
Because the consideration between Fabio and Chris is valid, Fabio is
under the contractual obligation to pay the reward of $500 to Chris who
finds and returns the outdoor swing seat as Fabio’s requirements in the
poster.
Because a rule on consideration, Chris responded all 6 requirements of
promissory estoppel to receive the reward of $500; meanwhile the
courier – the third party of the contract between Fabio and Chris, is not
entiled to the reward of $500.
VN Law Same results as well as rules; however, in Vietnamese Civil Code 2015
has the detailed rules that “Where several persons perform an act for
which a reward is promised, concurrently but independently, the person
having first completed the act shall be given the reward.” (Article 572)
GROUP 4 - Consent of parties - Contract
Applying Australian law to resolve the problem below. Would your answers be different
if Vietnamese Laws apply? One evening, Jack met Susan and told her that Adam would
sue him for his failure to pay the money he owed Adam, amounting to USD 100,000.
After Jack revealed his problem to Susan, Susan persuaded Jack to sell his bungalow to
her at the price of USD 100,000 to enable Jack to pay his debt to Adam. Jack
immediately agreed with Susan’s proposal because Susan is the only one in his heart.
Jack had always listened to Susan and would fulfill Susan’s wishes. A contract to transfer
the bungalow to Susan was done and six months later, Susan left Jack to marry her friend,
Mark. Jack was frustrated and happened to know that his bungalow worth USD 200,000
at the time of the transfer. Now, Jack decided to set aside the contract. Advise Jack.
Issues Whether Jack can set aside the contract of selling his bungalow to
Susan?
Rules Rules of Undue Influence
Undue influence is the improper use of the ascendancy acquired by one
person over another for the benefit of the ascendant person themselves
or someone else, so that the acts of the person influenced are not, in the
fullest sense of the word, their free voluntary acts. Undue influence
usually arises in transfers of property for no or inadequate consideration.
Where the following special relationships exist, undue influence is
presumed (a) parent and child, until the child has withdrawn from the
influence of the parent; (b) guardian and ward; (c) trustee and
beneficiary; (d) solicitor and client; (e) religious adviser and devotee; or
(f) doctor and patient.
However, the list of relationships that may give rise to a presumption of
undue influence is not closed. Thus, it is open to a person to establish
that a special relationship of trust and confidence has arisen such as to
give rise to a presumption of undue influence against the person in the
dominant position.
 Undue influence renders a contract voidable at the option of the
“weaker” party. If an unreasonable length of time is allowed to elapse
after the entire cessation of the influence, the right of a person to have a
transaction set aside on the ground of undue influence may be lost. What
is “reasonable” is a question of fact that depends on the circumstances of
the case.
Rules of Unconscionable Conduct:
The general rule is that the court will not grant relief to a party merely
because the contract they have entered into contains harsh terms.
However, the courts are prepared to act where the consent of one of the
parties is affected by the unconscionable conduct of another party. There
is often a special disadvantage of one party against another party.
The weaker party, must prove:
- They were under a special disadvantage (age, illiteracy, illness,
economic circumstances, commercia inexperience) in relation to
the transaction so that they could not decide what was in their
best interests; and
- The other party knew, or should have known, of the
disadvantage; and
- Nevertheless, took advantage of their superior position.
Applicatio In the case of Jack and Susan, it appears that Susan may have exerted
n undue influence over Jack to enter into the contract to transfer the
bungalow. Susan was in a position of dominance over Jack, as he trusted
her and was willing to fulfill her wishes. Additionally, Susan persuaded
Jack to sell his bungalow to her at a low price, which may indicate that
the consideration for the contract was inadequate. Based on these
factors, it is possible that Jack could seek to set aside the contract on the
grounds of undue influence.
About Jack's position, Jack was in a vulnerable position as he was being
threatened by Adam to pay his debt of USD 100,000. Jack agreed to this
proposal immediately because he was emotionally attached to Susan and
to fulfill her wishes.
According to the Australian Consumer Law, Unconscionable conduct
refers to conduct that is so harsh and goes against good conscience.
Susan's conduct can be considered unconscionable as she took
advantage of Jack's vulnerability and convinced him to sell his
bungalow at an unreasonable low price
Further, Jack's frustration and realization of the actual value of the
bungalow after the transfer further supports the argument that Susan's
conduct was unconscionable. The fact that Susan left Jack shortly after
 the transfer to marry her friend, Mark, also raises questions about her
intentions.

Conclusion Jack will be able to cancel the contract.

VN Law Applying rule 117, the contract of Jack selling his bungalow to Susan
was valid.
Applying the set of rules from 123 to 129, there is no applicable rule to
help Jack set aside the contract.
-> Jack is: + Not able to cancel the contract. + Will not receive any
compensation.

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 4. GROUP 5

Applying Australian law to resolve the problem below. Would your answers be different if
Vietnamese Laws apply? Healing Ic. recently opened an anti-stress clinic on the edge of the
village of Springvale. Farmer Oswald’s arable farm is immediately adjacent to the clinic’s
premise, which includes a swimming pool. For three weeks during the summer, Grinders
Farming Contractors Ltd are employed by Oswald to bring in the harvest. The work involves
daily use of huge machines. The noise of the machinery upsets the clinic’s patients, many of
whom cancel expensive course of treatment. The dust and dirt from the harvesting process forms
a thick film on the swimming pool making it unusable, and clogs the filter causing it to break
down and require expensive repairs. Ned, one of the Grinders’ employees, drops a cigarette end
which starts a fire in the field. It spreads into the clinic’s grounds and destroys a summer house.
Advise Healing Inc about its possible rights in tort.

Issues Whether Grinders Farming Contractors Ltd should be responsible for the tort
that it caused for Healing Inc. because of the noise, dust and fire caused by
the harvesting process.

Rules Negligence (Duty of Care, Breach of Duty, Causation): occurs when a person
breaches a duty of care owed to another person, and that breach causes
damage or harm
Private Nuisance (Interference,Reasonableness,Damage): occurs when a
person's use of their property unreasonably interferes with another person's
use and enjoyment of their property
Trespass(Entry, Intention): occurs when a person enters or interferes with
another person's property without permission or lawful justification.

Application
Conclusion Can pursue a claim for negligence against Farmer Oswald, Grinders Farming
Contractors and Ned under Australian law
Can seek legal advice from a qualified Australian lawyer to determine the
best course of action and possible remedies available to it for the damage

VN
5. GROUP 6 - Negligence and Consumer Law

Applying Australian law to resolve the problem below. Would your answers be different
if Vietnamese Laws apply?

Alice bought a small bakery business. It was surveyed by George, for Happy Homes
Building Society, which provided Alice with the mortgage. Alice paid Happy Homes for
a summary report from George. This stated that there were no major structure problems
and that the premises were worth the asking price. It concluded: “This report is for
valuation purposes only and will not give rise to any legal liability.” Alice contracted
with Industrial Kitchen Fitters Ltd. (IKF) to refit the kitchen. They installed a new oven
manufactured by Cinders Inc. On moving in, Alice discovered severe and large-scale dry
rot when she fell through a storeroom floor and broke her leg. Her injuries and the
eradication of the dry rot delayed the opening of the premises for several months. A week
after the business eventually opened, the new oven malfunctioned. As a result, a wedding
cake was badly burnt, leading to a claim for damages for break of contract against Alice,
by the bride’s father. IKF have gone out of business.

Issues Whether Alice can claim George for her injury and economic loss under
Law of tort?

Whether Alice is entitled to a remedy from IKF for the malfunctioning

oven and compensation for the losses caused by it.

Whether Alice can claim Cinder.Inc for malfunction of the oven and the
damages resulting from it?

Can Alice be asked to fully compensate the bride's father for the cake
that burned in the oven?

Rules The defendant in an action based on negligence will only be liable if the
plaintiff can prove:
- The defendant owed the plaintiff a duty of care;
- The defendant was in breach of this duty of care;
- The defendant’s breach of duty was the cause of the plaintiff’s
loss (“causation”)
- The damage suffered by the plaintiff was not too remote
(“remoteness of damage”).

The High Court of Australia confirmed that a person could owe a duty
of care for negligent statements provided:
 - The advice was given in respect of a serious or business matter;
- The adviser should have realised he or she was being relied upon
to give correct advice;
- It was reasonable for the other person to have relied on the
advice.

Section 48(1) of the Wrongs Act 1958 (Vic) states:

A person is not negligent in failing to take precautions against a risk of
harm unless:
- The risk was foreseeable
- The risk was not insignificant; and
- In the circumstances, a reasonable person in the person’s position
would have taken those precautions.

Section 48(2) of the Wrongs Act 1958 (Vic) adopts the common law
approach of considering various factors in deciding how a reasonable
person would have responded to the risk:
- The probability of the risk of injury;
- The gravity of the harm;
- The burden of eliminating the risk; and
- The utility of the defendant’s conduct.

In Victoria, s 51(1)(a) of the Wrongs Act 1958 provides that the decision
whether a breach of duty caused the particular harm involves a test or
element of “factual causation”, which referred to the “but for” test.

S.2(1) “Supply” is defined to include not only contracts of sale

but also contracts for the “exchange, lease, hire or hire-purchase”
of goods.

S.3
(1): “Consumer” limited to
Amount payable does not exceed $100,000
● Goods of a kind ordinarily acquired for personal,
domestic or household use on consumption;
● Goods consist of a vehicle/trailer for transport of goods
on public roads.

(2): However, subsection (1) does not apply if the person

acquired the goods, or held himself or herself out as acquiring
the goods:
(b)for the purpose of re-supply; or for the purpose of using them
up or transforming them, in trade or commerce:
(i) in the course of a process of production or
manufacture; or
 (ii) in the course of repairing or treating other goods or
fixtures on land.

S.54(1).
Where a person supplies goods to a consumer in trade or
commerce, there is a guarantee that the goods are of acceptable
quality:
Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind
are commonly supplied;
(b) acceptable in appearance and finish;
(c) free from defects;
(d) safe; and
(e) durable;

S.259 (1)
A consumer may take action against suppliers of goods under
this section if:
(a) a person (the supplier) supplies, in trade or commerce,
goods to the consumer; and
(b) a guarantee that applies to the supply is not complied with.

S.259 (4)
The consumer may, by action against the supplier, recover
damages for any loss or damage suffered by the consumer
because of the failure to comply with the guarantee if it was
reasonably foreseeable that the consumer would suffer such loss
or damage as a result of such a failure.

s 54:

s 271 (1): If:

a) The guarantee under section 54 applies to supply of

goods to a consumer; and

b) The guarantee is not complied with.

An affected person in relation to the goods may, by action against the

manufacturer of the goods, recover damages from the manufacturer.

s 272: (1) In an action for damages under this Division, an affected

person in relation to goods is entitled to recover damages for:
 (a) any reduction in the value of the goods, resulting from the
failure to comply with the guarantee to which the action relates,
below whichever of the following prices is lower:

(i) the price paid or payable by the consumer for the goods.

(ii) the average retail price of the goods at the time of supply;
and

(b) any loss or damage suffered by the affected person because

of the failure to comply with the guarantee to which the action
relates if it was reasonably foreseeable that the affected person
would suffer such loss or damage as a result of such a failure.

(2) Without limiting subsection (1)(b), the cost of inspecting and

returning the goods to the manufacturer is taken to be a reasonably
foreseeable loss suffered by the affected person as a result of the failure
to comply with the guarantee.

S. 54 Guarantee as to acceptable quality

(1) If:
(a) a person supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction; there is a
guarantee that the goods are of acceptable quality.
(2) Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind are commonly
supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and (d) safe; and (e) durable;

S. 259 Action against suppliers of goods

(1) A consumer may take action under this section if:
(a) a person (the supplier) supplies, in trade or commerce, goods to the
consumer; and
(b) a guarantee that applies to the supply is not complied with
(2) If the failure to comply with the guarantee can be remedied
and is not a major failure: (a) the consumer may require the
supplier to remedy the failure within a reasonable time;

S. 261 How suppliers may remedy a failure to comply with a guarantee

(c) by replacing the goods with goods of an identical type; or
 (d) by refunding:
(i) any money paid by the consumer for the goods; and
(ii) an amount that is equal to the value of any other consideration
provided by the consumer for the goods.

Applicatio Since Alice paid for the report from George to make preparation for her
n new business, the advice was given in respect of a serious matter.
Secondly, because George had a financial interest in the advice, and
worked as a real estate appraiser, which means he was in the profession
of advising, he should have realised he was being relied on to give
correct advice. Lastly, Alice spent money having the premises surveyed
by an expert, so it is reasonable for her to rely on what George stated in
the document. As a result, George owed a duty of care to Alice
according to the High Court of Australia.

When Alice moved in, the dry rot appeared on a severe and massive
scale, so there was a possibility that the dry rot already existed since
George surveyed the bakery. But he neglected to inform her about the
dry rot, which violates the decision of the court in Shaddock &
Associates v Parramatta City Council (1981).
Also, the act was reasonably foreseeable to result in the client’s loss to
fix the damage and even injury if the situation went bad. Next, the risk
of being injured was not insignificant since large-scale dry rot can cause
Alice to suffer from physical harm, not to mention the economic loss
when stopping business to eradicate it. A reasonable person would have
told their client about the dry rot for further solutions because the burden
of taking precaution was low , while there was a high possibility that the
negligence in informing about the dry rot led to damage. Thus, regarding
s 48(1) and(2) of the Wrongs Act 1958 (Vic) , George broke his duty of
care owed to Alice.

Finally, there was factual causation in this case because but for not
having been told about dry rot by George , Alice wouldn’t have had her
legs broken and suffered from economic loss. Therefore, George’s
breach of duty was the cause of Alice's damage according to s 51(1)(a)
of the Wrongs Act 1958.
As there was sufficient evidence to prove that George was in breach of
the duty of care he owed to Alice, which was also the factual causation
of her loss, Alice can claim compensation from George although he
stated in the report “This report was for valuation purposes only and will
not give rise to any legal liability”.

Firstly, IKF is considered as a supplier who supplies both goods

(the oven) and service (refitting kitchen service) to Alice S.2(1).
 Alice is also considered as a consumer under S.3(1) and S.3(2)
since according to S.3(2) the oven was not used up as part of a
process of production.

Secondly, according to S.54(1) when IKF installed the oven to

Alice, there is a guarantee that the oven is of acceptable quality.
However, that oven broke down just after one week, which
means it is not durable and not free from defects. Therefore,
Alice can claim remedy from IKF under S.259(1) since IKF
breached the consumer guarantee of goods with acceptable
quality.

Moreover, since the malfunction of the oven caused the wedding

cake to be badly burnt is foreseeable and leads to the claims for
breach of contract against Alice. Hence, according to S.259 (4),
Alice has the right to claim IKF for recovering her loss.

However, IKF has gone out of business which means IKF no

longer exists as a legal entity. Therefore, Alice can not claim
remedy from IKF in this situation as there is no legal entity to
hold the responsibility.

Extracts from the Australian Consumer Law: s 271 (1): the guarantee
under section 54 applies to the oven; and the guarantee is not complied
with. Alice, in relation to the oven may, claim against Cinder.Inc, to
recover damages from malfunction of the oven.

Because Cinder.Inc violated S 54. Base on s 272: (1): Alice is entitled to

recover damages from Cinder.Inc for any reduction in the value of the
oven, resulting from the failure to comply with the guarantee to
acceptable quality, below lower than the price paid by Alice for the oven
and the average retail price of the oven at the time of supply.
Furthermore, the cost of inspecting and returning the oven to Cinder.Inc
is taken to be a foreseeable loss suffered by Alice as a result of the
failure to comply with the guarantee.

As per the contract between Alice and Bride’s father, the burned cake
does not meet the standard because of the appearance ( due to the
section 54(b) guarantee as to acceptable quality).

Since Alice cannot keep the acceptable quality of the cake, and the burnt
cake is not a major failure, the bride’s father can return the cake and
request compensation from Alice within the reasonable time according
to section 259 (1) and (2)
 For Alice, she can help herself by supplying the alternative product, or
refunding an amount that is equal to the value of the previous goods by
the ACL section 261(c) (d) when she fails to comply with the
guarantee.

Conclusion Under the law of tort, George committed the tort of negligence in
relation to the provision of information, causing economic loss and
physical harm to Alice. Thus, he had to hold responsibility for
recovering any arisen damages.

Alice has the right but can not claim any remedies against IKF for the
malfunctioned oven and for compensation for her loss as IKF has gone
out of business, which means there is no legal entity to hold the
responsibility.

Alice has absolutely sufficient grounds (s 54; s 271; s 272) to demand

that Cinder.Inc make a refund for the oven and pay any additional costs
such as inspection fees and shipping fees for the oven back to Cinder. In
this case, it is impossible to require Cinder.Inc to perform the warranty
and repair of the oven because as soon as IKF installed the oven and
even before and after, they did not mention any warranty is given or
made for the oven.

In the end, It’s sure that Alice has to take full responsibility for the
bride’s father even in the worst situation because of the laws for
consumers and suppliers with unable excuses from the third party such
as the oven due to those section 54, 259, and 261.

VN
6. GROUP 7
 7. GROUP 8 PARTNERSHIP

Applying Australian law to resolve the problem below. Would your answers be different if
Vietnamese Laws apply? Judy, Maree, Louise and Bob operate an accounting firm as partners.
They have a written partnership agreement. Judy’s job title at the firm is Managing Partner,
however since Judy wants to retire soon, the partners share the management duties equally.
Without consulting the other partners, Judy decides to engage the services of Bob, a building
contractor to conduct renovations to the office, costing $10,000. Judy also hires a personal
assistant, Lyn. When the other partners find out, they inform Bob and Lyn that their services are
not required. Bob has already spent $5,000 on materials for the renovation and demands to be
reimbursed. Lyn argues that she has a valid agreement with the Managing Partner of the firm.
Discuss the authority of partners with reference to statute and case law.

Issues 1. Whether Judy is proficient enough to assign services of Bob and hire a personal assistant
2. Whether the remaining partners are tied to contracts with Bob and Lyn (Contracts of Bob
Lyn to the company is valid)
3. Whether Bob is reimbursed

Rules There are two sources of law that are relevant when considering how partners bind their partners
dealing with third parties: the common law of agency and the Partnership Act. The common la
complements the provisions of the Partnership Act in relation to the authority that an agent has. S
issue 1, we will apply the rules on the common law of agency to figure out the authority of Judy.
● Issue 1: Rules on the common law of agency (authority of agents)

Actual authority Apparent authority

An “actual” authority is a legal relationship If a principal allows an agent to occupy a

between principal and agent created by a particular position without having been
consensual agreement to which they alone are formally appointed, the agent will have
parties. If the agent does enter into a contract apparent authority to deal with third parties
pursuant to the “actual” authority, it does create in a manner consistent with the functions
 contractual rights and liabilities between the normally falling within the usual authority
principal and the contractor. of the holder of that position.
● Issues 2: Rules on the Partnership Acts
In problem 1, we used common law of agency, and in issue 2, we will apply the remaining source
law Partnership Act to decide if other parties will be bound to the contracts with Bob and Lyn.

Partners may be bound by the actions of a partner:

▶ when the partners have authorized a partner to enter into a transaction on their behalf with the
outsider. Here the normal rules of agency apply so that if the agent has acted within his or her act
or apparent authority, the partners will be bound to the transaction;
▶ when one of the partners has acted, without express authorisation, in circumstances where the
requirements of the Partnership Act have been met:
▷ the act or transaction was entered into by a partner; ▷ the act or transaction entered into
be within the scope of the kind of business carried on by the firm;
▷ the act or transaction must be carried out in the usual way;
▷ provided that the partners will not be bound where the other party to the transaction kno
(or believes) the person lacks authority or does not believe they are a partner
Actually, the issue 2 depends upon the first issue because the normal rules of agency apply so tha
the agent has acted within his or her actual or apparent authority, the partners will be bound to the
transaction
● Issue 3: Rules on the Right to indemnity and reimbursement
In the third issue, in order to indicate whether Bob was entitled to a refund, the Right to
Reimbursement Act in the agency law was applied.

[15.370] Every agent is entitled to be indemnified against all losses and liabilities sustained, and
reimbursed for all expenses lawfully incurred in the carrying out of the principal’s instructions.
Attention is drawn to the word “lawfully”, for where the agent has acted outside the scope of thei
authority, or has engaged in an unlawful act, or suffered loss through their own negligence or def
the agent has no claim to be reimbursed or indemnified.

Applicatio In this case, Judy, as the Managing Partner, has had both actual and apparent authority to engage
n to conduct renovations to the office and hire personal assistant Lyn. Since Judy wants to retire so
the partners have agreed to share management duties equally; however, she still holds a Managin
Partner position in the firm.Therefore, Judy has enough authority to make any decisions without
consulting the other partners. Or we can say that Judy does not exceed her authority when she
engages in Bob’s services and hires Lyn.
Based on the Partnership Acts, normal rules of agency apply so that if the agent has acted within
or her actual or apparent authority, the partners will be bound to the transaction. Moreover, Judy
clearly done within her power based on the first issue. It proves that other partners, Louise and M
will be bound to the contracts with Bob and Lyn
Applying to Bob's case, the following facts apply:
Other partners are bound into contracts with Bob and Lyn. Therefore, if they continue assuming t
Bob and Lyn's contract is invalid, they must reimburse Bob for materials bought in accordance w
Rules on the Right to indemnity and reimbursement
Conclusion By applying the common law of agency, Judy is not exceeding the authority that one agent has un
Australian law. According to the Partnerships Act, the other partners, Loiuse and Maree, will be
bound to Bob and Lyn's contracts with the firm. Lastly, based on the right to indemnity and
reimbursements of one agent, Bob has the right to seek reimbursement.
VN LUẬT DOANH NGHIỆP
Số. 59/2020/QH14
Chương III: CÔNG TY TRÁCH NHIỆM HỮU HẠN
Mục I: CÔNG TY TRÁCH NHIỆM HỮU HẠN HAI THÀNH VIÊN TRỞ LÊN
Điều 50. Nghĩa vụ của thành viên Hội đồng thành viên

5. Chịu trách nhiệm cá nhân khi nhân danh công ty để thực hiện các hành vi sau đây:

b) Tiến hành kinh doanh hoặc giao dịch khác không nhằm phục vụ lợi ích của công ty và gâ
thiệt hại cho người khác;

Điều 67. Hợp đồng, giao dịch phải được Hội đồng thành viên chấp thuận

1. Hợp đồng, giao dịch giữa công ty với đối tượng sau đây phải được Hội đồng thành viên chấp t

a) Thành viên, người đại diện theo ủy quyền của thành viên, Giám đốc hoặc Tổng giám đốc, ngư
diện theo pháp luật của công ty;

b) Người có liên quan của người quy định tại điểm a khoản này;

c) Người quản lý công ty mẹ, người có thẩm quyền bổ nhiệm người quản lý công ty mẹ;

d) Người có liên quan của người quy định tại điểm c khoản này.

2. Người nhân danh công ty ký kết hợp đồng, giao dịch phải thông báo cho các thành viên Hội đồ
thành viên, Kiểm soát viên về các đối tượng có liên quan và lợi ích có liên quan đối với hợp đồng
giao dịch đó; kèm theo dự thảo hợp đồng hoặc nội dung chủ yếu của giao dịch dự định tiến hành.
Trường hợp Điều lệ công ty không quy định khác thì Hội đồng thành viên phải quyết định chấp t
hoặc không chấp thuận hợp đồng, giao dịch trong thời hạn 15 ngày kể từ ngày nhận được thông b
và thực hiện theo quy định tại khoản 3 Điều 59 của Luật này. Thành viên Hội đồng thành viên có
quan đến các bên trong hợp đồng, giao dịch không được tính vào việc biểu quyết.

4. Hợp đồng, giao dịch bị vô hiệu theo quyết định của Tòa án và xử lý theo quy định của ph
luật khi được ký kết không đúng quy định tại khoản 1 và khoản 2 Điều này. Người ký kết
đồng, giao dịch, thành viên có liên quan và người có liên quan của thành viên đó tham gia
đồng, giao dịch phải bồi thường thiệt hại phát sinh, hoàn trả cho công ty các khoản lợi thu
được từ việc thực hiện hợp đồng, giao dịch đó.

Eng:
Law on enterprises
No. 59/2020/QH14
Chapter III: Limited Liability Companies
Section I: Multi-member limited liability companies
Article 50. Obligations of members of the Board of Members
5. Take personal responsibility when performing the following actions in the name of the compan
b) Business operations or transactions that do not serve the company’s interests and cause damag
others;
Article 67. Contracts and transactions subject to approval by the Board of Members
1. Contracts and transactions between the company and the following entities are subject to appro
by the Board of Members:
a) Members and their authorized representatives, the Director/General Director, the company’s le
representative;
b) Related persons of the persons mentioned in Point a of this Clause;
c) Executives of the parent company and the person having the power to designate them;
d) Related persons of the persons mentioned in Point c of this Clause.
2. The person who concludes a contract or carries on a transaction on behalf of the company shal
send a notification to members of the Board of Members and the Controllers of the related entitie
interests of such contract or transaction together with the draft contract or description of the
transaction. Unless otherwise prescribed by company's charter, the Board of Members shall decid
whether to approve or disapprove the contract or transaction within 15 days from the day on whic
notification is received and follow the instructions in Clause 3 Article 59 of this Law. Members o
Board of Members who are related to the parties to the contract or transaction must not vote.
3. A contract or transaction shall be invalidated under a court decision and handled as prescribed
law when it is concluded or carried out against regulations of Clause 1 and Clause 2 of this Articl
The person who concludes the contract or carries out the transaction, related members and their
related persons shall pay compensation for any damage caused and return the benefits generated
such contract or transaction to the company.

Civil Code
No. 91/2015/QH13
Chapter XVI: Common Contracts
Section VIII: Corporation Contract
Article 507. Rights and obligations of cooperative members
2. Participate in decisions involving issues of performance of cooperation contracts and
co-operation monitoring.

Applications:
Issue 1: (Clauses 1 and 2, Article 67 of the Law on Enterprises 2020) Judy is a partner in a busin
and as such, she shares all decision-making authority and legal standing with the other partners. A
member shall not, without the prior notice and permission of the other members, unilaterally auth
or execute any contract. Judy therefore lacked the authority to give Bob the go-ahead to renovate
business and hire Lyn as his personal secretary.
In this issue, there are no differences between Australian law and Vietnamese law.
Issue 2: The remaining members: Maree, Louise were completely uninformed about the contract
problems that Judy had made with Lyn and Bob so these members need not be responsible or
involved. Moreover, the contract between Judy and Bob and Lyn will also be invalidated because
does not comply with the provisions of Clauses 1, 2, and 3 Article 67 of the Law on Enterprises 2
.
In this issue, there are no differences between Australian law and Vietnamese law.
Issue 3: (Clause 3 - Article 67 of the Law on Enterprises 2020 and Clause 5 Article 50 of the Law
Enterprises 2020) Applying to Bob's case, Bob is also a member of a partnership, so the fact that
knows Judy is not proficient enough to authorize his services without notifying other partners but
still participates and buy materials, meaning that Bob has gone beyond his powers of a partner. A
result, Bob has to be personally responsible, that means, Bob has no right to ask the company to
reimburse for his negligence.
In this issue, there are no differences between Australian law and Vietnamese law.
8. GROUP 9

Issues
Rules
Applicatio
n
Conclusion
VN
 9. GROUP 10 CORPORATION

Issues Whether Peter, Paul, and James, appointed to the board of directors, breach the
duty and take responsibility under the Corporations Act 2001?
 Whether the CFO breaches the duty and take responsibility under the
Corporations Act 2001?
Whether Simon, appointed as a company secretary and also employed by the
company as their senior in-house lawyer, breaches the duty and takes
responsibility under the Corporations Act 2001?

Rules Section 180 (1): Sets an objective standard of care and diligence that all
directors and other officers of corporations must meet when exercising a power
or discharging a duty.
Section 184 (criminal offences): Good faith – directors and other officers (1) A
director or other officers of a corporation commits an offence if they: (a) are
reckless; or ...
Section 189: A director may rely on information/ professional/ expert advice if
they have no reason to suspect the information is incorrect or misleading.
Provided that: The reliance was made in good faith and after making an
independent assessment of the information/ advice, having regard to the
director’s knowledge of the company and the complexity of the structure and
operations of the company. The reasonableness of the director’s reliance on the
information or advice arises in proceedings brought to determine whether a
director has performed a duty under the relevant part of the Corporations Act or
an equivalent general law duty.

Applicatio Under the Corporations Act 2001, directors and officers owe a range of duties
n to the company
- Directors only gave the financial statements a cursory glance before
using them to meet the company's reporting requirements to ASIC.
Therefore, a breach of directors’ duties under section 180(1) of the
Corporations Act 2001.
- Directors argue in their defense that they heavily relied on the advice of
the CFO. Section 189 of the Corporations Act 2001: a director may rely
on information provided by others if they have no reason to suspect that
the information is incorrect or misleading. However, in this context, the
obligation of the directors was not just to read and understand the
financial accounts but also to bring an independent and enquiring mind,
questioning whether the statements matched their own knowledge of the
company’s finances. Directors' reliance on the advice of the CFO is not
a complete defense against a breach of their duties and they would have
to pay a civil penalty in compensation.
- CFO must be responsible for many financial statements, but he poorly
managed the figures on the financial report.These statements grossly
 overstate the company's financial stability and lead to serious
consequences. A breach of the CFO’s duties under section 184 of the
Corporations Act 2001.
- Simon argue in their defense that he made decision under duties of an
in-house lawyer not company secretary. Section 180 (1): all directors
and other officers, including in-house lawyer, have the duty of care and
diligence to act in the best interests of the company, in the same way as
company secretaries. In-house lawyer is liable for breach of duties such
as the duty of care and diligence and the duty to act in the best interests
of the company. Furthermore, an in-house lawyer has to ensure that the
company complies with all relevant laws and regulations.
-

Conclusion Under the Corporations Act 2001: Peter, Paul and James breached their duties
of being directors relevant to Section 180(1) & Section 189 Simon breached his
duties of being an officer regardless of being an in-house lawyer or a secretary
relevant to Section 180(1) CFO breached his duties of being directors relevant
to Section 184

⇨ liabilities to pay civil penalty & 5-year imprisonment and/or fines

VN Law
 OTHERS
1. PARTNERSHIP
2. CONSENT – FRAUDULENT MISREPRESENTATION
Issue:
Whether Alan can avoid the contract and claim damages under fraudulent misrepresentation?

Rule:
Fraudulent misrepresentation - a lie used to trick someone into an agreement that harms them
Prove the existence of six elements:
1. Statement of fact
2. Statement is false
3. Known to be false or without belief in its truth or recklessly careless whether true or false
4. Intended to be acted upon
5. In fact acted upon
6. Resulting in damage

Remedies:
The injured party may:
1. Refuse to be bound & bring an action for rescission where necessary
2. Affirm the contract, retaining any benefits they have received. And sue for fraud,
claiming damages or loss they have sustained.

Application:
The advertisement vs facts are different wrongful information
● 3-year-old Magenta Wow The car is at least 5 years old
● Accident-free The car had previously met with a bad accident. The repair marks
were clear on the under-carriage
 ● Only 60,000 km The car must have done about 150,000 km
Conclusion:
Alan has 2 choices:
● Keep the contract and sue Bahari for damage to receive indemnification (tiền bồi thường)
● Revoke contract and claim back money (US$8,000)

3. CONSENT – UNILATERAL MISTAKES

Issue: Who receive the title of the car, Jean or Emma?
Rule:
Unilateral mistake
● One party is aware/should have been aware that the other party is mistaken.
● One party is mistaken as to:
● identify of other party;
● Terms of the contract; or
● Nature of the document signed
● Refer to the case Phillips v Brooks Ltd [1919] 2 KB 243, when the Court decided that the
contract was voidable for fraudulent misrepresentation but not void for mistake. The
result was that the dependent derived a good title to the good because the sale to him
occurred before the plaintiff rescinded the contract.

Application:

- In this case, there was a unilateral mistake of Jean, as she intended only to deal with the woman
who looks like Kylie Monogue. However, the contract was voidable for fraudulent
misrepresentation but not void for mistake. This is because the sale of the car to Emma occurred
before Jean rescind the contract, thus, Emma derived a good title for the car.
- This is the same as the case Phillips v Brooks Ltd [1919] 2 KB 243, The contract was also
voidable for fraudulent misrepresentation, not void for mistake. Phillips rescind the contract after
the sale of the jewellery, thus, the defendant-the innocent third party receives the title of the
jewellery.
Conclusion:
Jean cannot recover her car from Emma.
4.
 5. CONTRACT
Scott is very proud of his fully restored 1969 Mustang Coupe and he thinks it would
be wise to make sure that he is fully protected in the case of an accident. On Monday
at lunchtime, while he is at work, he calls AAPI insurance company to take out a
comprehensive car insurance policy for his mustang. That same morning at 9am there
is a house fire at a neighbor’s property, which spreads to Scott’s garage and burns it to
the ground. When Scott arrives home that afternoon he discovers his mustang has
been completely destroyed. AAPI won’t reimburse Scott for the value of mustang
since the insurance policy commenced after the car was destroyed. Scott would like to
cancel his policy and obtain a refund since there is no longer a car to insure. Is Scott
able to avoid the contract?

Issue: Whether there is a legally binding contract between Scott and AAPI? If not, Is Scott able
to cancel his policy and obtain a refund?

Rules: apply the rule of common mistake (precedence set by Scott v Coulson [1903] 2 Ch 249)
● Where both parties make the same mistake regarding a fundamental matter of fact
● There are kinds of fact that may lead the contract to a contract being void or voidable:
● The existence of a the subject matter of a contract: If something exist, being true
then if it is not, the contract is void
● The quality of the subject matter of a contract: mistakes concern the quality or
attributes are rarely voidable, and
=> the party who is the owner at the time the truth is revealed bears the loss

Application: The insurance for the car insurance policy was made upon the basis of a belief
common to both parties which are Scott and AAPI. In fact, the car was destroyed before the
contract of assignment was made. Therefore, there was a common mistake about the existence of
the subject matter, and the contract is void. Scott is responsible for the loss of the car. Because
the contract was void, AAIP have to refund the money Scott paid for the insurance

Conclusion: Scott is able to avoid the contract and obtain the refund money he paid to AAIP for
the car insurance
 6. ACCEPTANCE AND OFFER

Issues Whether B will be entitled to buy the computer from A?

Or whether C will be entitled to buy the computer from A?

When the contract is formed?

Rules - According to rules of offer, offers will lapse/end if a counter-offer is
made
- According to rules of acceptance, general principle 2 said that
“Acceptance must be made in the manner specified/indicated by offeror
but where no special manner specified then the mode of acceptance
depends on the circumstances of the case is not acceptance”
Applicatio - In 2 March, B wants to change the conditions; therefore, it becomes the
n counteroffer, making the original acceptance invalidate
- In 7 March, B neither add some more conditions nor say the argreement.
Meanwhile, an acceptance must be sent by post as the offer requires.
Thus, the activity that B telephoned is not a valid acceptance.
Conclusion The contract is formed between A and C on the 9 March.
Vietnamese Law: Acceptance is accepted at the time it is received, meaning that the contract
is formed between A and C on the day A received the letter from C.
7. PROMISE
 8. CONSIDERATION

Issue: Whether there is a valid consideration in the agreement between Alice and the bus driver.
If not, whether there is any exception that would apply in order for the bus driver to claim the
$500. (2-3/25)

Rules: Rules on past consideration and promissory estoppel (5-6/25)

+ Past consideration means the exchange of something of value is made after one party/
both parties have done an act and past consideration is not a valid consideration

+ Promissory estoppel means……to prove promissory estoppel, the claimant needs to

prove the following elements: …….

Application: (13-15/25)

+ In this case, Alice promised to pay the bus driver after the bus driver made a trip to
University and handed over the folder to her. So that, it is a past consideration. Applying
the rules on past consideration as stated above, such an agreement doesn’t form a vid
contract because past consideration is not a valid consideration. As such, Alice is under
no contractual obligation to pay the bus driver $500 as promised.
 + However, it would be unfair for the bus driver if Alice is allowed to walk away from
her promise. Applying the rules on promissory estoppel, it can be seen that all elements
of promissory estoppel could be satisfied. In particular,
1. The first element is…..
2. The second element is….

Conclusion: (2-3/25)
+ Even though the consideration given by Alice is past, all elements for applying
promissory estoppel are presented. As such, Alice is required under promissory estoppel
rules, Alice is required to pay $500 as promised to the bus driver.

ANOTHER CASES OF CONSIDERATION IN SESSIONS

The father told the son: If do not not smoke until you turn 18, I will give you 100k$ (The law
prohibit people under 18 from smoking) -> invalid consideration
The father told the son: If you do not smoke until you turn21,I will give you 100k$ (The law
prohibit ppl under 18 from smoking) -> valid consideration

A man promise to give the police officer $500 if he could save his wife from a kid nap =>
invalid contract because existing duty is not a good consideration (the police has the duty to
protect people

Father said: “If I win this business deal, I will buy you a vespa” to his daughter. Later, he won
the business deal but then he did not buy the Vespa. Can the daughter claim that under the
contract law? Why? => it lacks consideration from the daughter so the daughter cannot do
that. If she want the contract to be enforceable, she should put it under seal/deeds by
making her father sign the contract (the contract should be in written form and witnessed
by a third party)
 9. MINORS
Henry is 15 years old and lives with his father in a rural area. One day Henry decides to buy a
horse to go horse-riding with his friends. Mary is a friend of Henry’s mother. Mary is selling her
horse, and she agrees to let Henry take the horse that day and pay her $500 the next day. Henry
takes the horse but refuses to pay Mary for the horse, arguing that she can’t sue him because he
is only a child. Mary seeks advice as to whether he has any recourse agaisnt Henry to recover her
horse or be paid $500 for the horse.

Issue: Whether Henry is bound by the contract of purchasing the horse from Mary under
contractual rule? Or Whether Mary can enforce the contract of purchasing the horse between her
and Henry under contractual capacity rule?
Rules: Contracts entered into by minor is voidable at the option of the minor only except for
- Contracts for neccesaries (which is binding on minor, i.e valid)
- Contracts for beneficial services (which is binding on minor, i.e valid)
- Contracts such as bill of exchange, security contract (in all States, i.e void)
- Contracts for repayment or payment for goods supplied (in Victoria, i.e payment on
credit) which are void.
Application:
In this case, Henry who is at the age of 14 is minor. The contract of purchasing the horse from
Mary is not a contract for neccesaries (i.e horse is not neccesaries, ‘neccesaries’ is something
like food, drink, shelter,…), beneficial services (i.e bring benefits to a child now or even future),
or not bill of exchange, security contract and not payment on credit. Therefore, the contract of
purchasing the horse from Mary of Henry is voidable.
Conclusion:
Because the contract is voidable at the option of the minor. Thus, Henry can choose either to
avoid (cancel) the contract and return the horseto Mary or keep the contract on foot and pay
Mary $500 for the horse.

Because the contract is voidable at the option of Mary, Mary can either (i) get the horse back if
Henry decides to cancel the contract or (ii) get the payment of $500 if Henry retifies the contract
(i.e, to retain the horse with him)
 10. ASSESSMENT OF DAMAGES
1 July: B bought coffee from A for $500
2 July: B had to sold coffee to C for $550 (they had contract)

⇨ Because A delivered the coffee to B late -> B had to buy coffee from D for $550
to deliver to C
⇨ B suffered the loss of profit $50
⇨ A break the contract (as if A delivered on time, B would not suffer profit of
$50) => compensate damages not only cover the loss but also pay for the
profit (là A phải compensate 550 hã???)
 11. DIFFERENCES BETWEEN PROPRIETARY AND PUBLIC
COMPANIES

Janine and Rebecca are in the process of incorporating their small business. Janie thinks it is best
to keep it all simple and set up a proprietary company, with 20 shareholders investing in their
company. Rebecca tells Janine to think big and suggests putting their company on the stock
exchange so they can get hundreds of shareholders, raise more money and continue to expand
their business. Janine is not sure and seeks your advice about the difference between proprietary
and public companies, and whether or not any limitations are placed on these companies in fund
raising, share issuing and number of members.

Proprietary company Public company

Number of - No more than 50 - Unlimited number of shareholders

members non-employee “members” (members)

Fundraising and - Is not permitted to raise - May raise and sell shares directly to public
share issuing funds by offering or issuing (subject to rules)
shares to the general public
- Not allowed to borrow
funds directly from general
public

Others - Need only 1 director - Used for large business operations

- Need not lodge financial - need at least 3 directors (2 resident in
statements with ASIC unless Australia)
required - Can list shares on ASX
- Can be either small or large - Must hold an AGM and have financial
- Must have proprietary accounts audited. Significantly higher levels
limited or Pty Ltd in name to of accounting, reporting, and disclosure
signify type of company obligations
- Small proprietary company - Must have company secretary
not required to hold AGM or - Name must not have proprietary or Pty
appoint auditor
 12. CORPORATION LAW
David is excited by his appointment to the board of directors of a financial investment company.
He has worked as a financial planner for several decades and is excited to offer his financial
expertise to the company’s board. The board customarily relies heavily on the advice of the chief
financial officer and rarely scrutinies his financial reports prior to submitting to ASIC. David
however tries to make informed decisions when fulfilling his directorial duties, so he reads the
financial reports thoroughly and also sets monthly meetings with key managerial staff to stay
abreast of the company’s business activities. He becomes worried that he might be liable for
automatically breaching relevant Section of the Corporations Act 2001 providing some defence
against breaches of that relevant section. Explain to David which section of the Corporations Act
that he could likely breach and the circumstances in which this protection/defence may apply.

Issue: Which section of the Corporations Act he could likely breach and the circumstances in
which this protection/defence may apply?

Rules: Corporations Act 2001

● Section 180(1) sets an objective standard of care and diligence that all directors and other
officers of corporations must meet when exercising a power or discharging a duty. The
duty of care and diligence required is determined by looking at the corporation’s
circumstances and the responsibilities that the officer had within the company and asking
what a reasonable person would have done if they were a director with the same
responsibilities.
● Section 181- In effect, the rule provides a “safe harbour” for directors when they make
informed and honest decisions but ones which ultimately are proved to be wrong. The
duty to act in good faith is a fiduciary obligation and is established in both the general
law and under statute. Directors must exercise their powers and discharge their duties in
good faith in the best interests of the corporation and for a proper purpose: s 181. A
director will breach this duty if they fail to give proper consideration to the separate
interests of the company ahead of other interests.
● Refer to the case Australian Securities and Investments Commission v Adler (2009) 236
FLR 1. The Court decided that ASIC had failed to prove that the directors had breached
their duty of care and diligence. They met the requirements of the business judgment rule
because they held a rational belief that their actions were in the best interests of the
company.
Application:
As David tries to make informed decisions when fulfilling his directional duties, by reading the
financial reports thoroughly and also sets monthly meetings with key managerial staffs to stay
abreast of the company’s business activities. He tries his best in making business decisions and
this is similar to the judgement in Australian Securities and Investments Commission v Adler
(2009) 236 FLR 1. The action of David shows that he had worked very carefull with care and
diligence, which means that he did not breach the duty of care and diligence. Even if he might
make mistakes when giving business decisions and breach section 180 (1), he has section 181 to
protect him because had worked in good faith in the best interest of the company.
Conclusion:
Because David may make mistakes in giving business decisions and breach section 180(1), he
has section 181 serve as his defence as he did his work honestly and carefully.

13. LAW OF PARTNERSHIP

Over dinner one evening, Peter and Fred decide to each contribute $10,000 to
form a partnership to invest in a business venture. A written partnership
agreement is drafted, which includes a stipulation that all profits from the venture
are to be shared equally between partners. Fred invests an additional $5,000 to
secure office premises and furniture for their venture. After 6 months, the
business venture still has not commenced, and no profit has been made. Peter
asks Fred to refund his $10,000 contribution but Fred refuses since he has
incurred debts and liabilities. Peter argues that since there was no profit, their
partnership is invalid. Is Peter correct?

Keywords: dinner, Peter, Fred, business venture, furniture, profit, refund, debts,
liabilities, invalid

Issue:
Whether there is a valid partnership between Peter and Fred?

Rules: Partnership Act

1. Definition of a partnership
Essential factors to determine partnership:
● Carrying on a business: Implying a repetition of acts, and commonly excludes the case of
an association formed for doing one particular act which is never to be repeated.
However, a single enterprise engaged by a joint venture may be a partnership.
● In common: There must be a “mutually of rights and obligations”
● With a view to profit: Partnerships do not have to make profits but they must be created
with a view to profit.
2. Formation of partnership: Partnership is created by agreement which can be oral, written,
under seal or inferred from a course of dealing adopted or agreed upon by all the partners.

Application:
1.
- Whether the parties had been “carrying on the business” was not whether the business venture
had commenced, but whether the parties had embarked on the venture. By securing office
premises and furniture for their venture, Peter and Fred had, indeed, embarked on their venture.
- In common: there must be a mutuality or sharing of rights and obligations”.
→ Each person contributes $10,000 to form the partnership
The drafted agreement includes a stipulation that all profits from the venture are to be shared
equally between the partners
They incurred debts and liabilities
“Fred invests an additional $5,000 to secure office premises and furniture for their venture”
- With a view to profit: they gave the intention to make profits

2. Here, a written partnership agreement is drafted

Conclusion:
In fact, the requirement for a partnership to be formed is the “intention” to make a profit, not
necessarily to actually make a profit. Moreover, partnership can be formed verbally and not
necessarily to be in written form. In this case, both Fred and Peter did invest the money, which
showed that they did have the intention to make a profit. Thus, the partnership between Peter and
Fred is valid and Peter is incorrect.
 14. LAW OF AGENCY
Case 1: Michael is the managing director of Hunter Winery Pty Ltd. The board of directors pass
a resolution limiting Michael’s authority. He is not permitted to enter into a contract which
commits more than $25,000 of the company funds without express authority from the board.

Michael decides that a picnic area with a children’s playground will enhance business, so he
signs an agreement with a contractor for $35,000 on behalf of Hunter Winery, without consulting
the board. Is the board bound to pay $25,000 or $35,000?

Keywords: Michael, managing director, Hunter Winery Pty Ltd., resolution, funds, authority,
picnic area, playground, bound

● Issue: Is the board bound to pay $25,000 or $35,000?

● Rules:
● apparent authority is conceptually distinct from actual (express or implied) authority.
Apparent authority arises from the relationship between the principal and the third party.
The agent does not affect the extent of apparent authority. The extent of the authority
depends on what the principal represents to the third party (expressly or impliedly, by
words or conduct) about the authority of the agent. Once the principal relies on the
representations by the principal, the principal cannot subsequently claim the agent did not
in fact have that authority.
● It is, in fact, merely the appearance of authority:”the authority of an agent as it appears
to others “: Hely-Huchinson v Brayhead Ltd [1968] 1 QB 549
● If a principal allows an agent to occupy a particular position, the agent will have apparent
authority to deal with third parties in a manner consistent with the functions normally
falling within the usual authority of the holder of that position. The following case is the
leading authority on this point.
● Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480.
● See also Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd 1971]
2 QB 711

● Application:A managing director is vested not only with implied authority but also with
apparent authority to do all such things as fall within the usual scope of that office,
including binding the board. Thus, while Michael has actual authority to bind the board
up to $25,000, his apparent authority will bind the board by any acts which fall within his
presented his authority, unless the board has specifically notified the contractor of the
restrictions on his authority.

● Conclusion: As it does not appear that the board has notified the contractor of the
restrictions of Michael’s authority, the board will have to pay the full sum: $35,000.
 15. LAW OF AGENCY

Case 2: Mario owns a computer shop and his senior salesperson, Marilyn, wants to quit her job
and find a position that is better paid. To keep Marilyn, Mario gives her a pay rise and a badge
with the title “Manager”. However, Marilyn’s actual responsibilities do not change and Mario
continues to act as Manager of the shop. While Mario is on leave for one week, Marilyn places
an order for expensive new computer components, which the store normally does not stock. Can
Marilyn do this?

Issue: Whether Marilyn is authorized to place an order?

Rules: Apparent authority

If a principle allows an agent to occupy a particular position (without having been formally
appointed), the agent will have apparent authority to deal with third parties in a manner
consistent with the functions normally falling within the usual authority of the holder of that
position.

Application:
● Marilyn can do everything with respect to the business.
● By giving her the badge, she has been authorized as manager. Marilyn: to a 3rd party she
is authorized, liable. 3rd party assumes that she is the manager

Conclusion:
Marilyn is liable to Mario under the principle and agent relationship
● She can conduct the activities
The relationship between principal and agent: authorization has been gone beyond but the
principal (Mario) still remained reliable.
 16. TORT LAW

Case 1: (giống case Hedley Byrne p.342 trong textbook)

Simpkins, an advertising agency, is to place television and newspaper advertisements on
behalf of a company called Com-media. As Simpkins is to personally guarantee the
payment of the advertising accounts, it seeks credit references from Com-media’s banker.
A written report supplied by the merchant banker states that Com-media is creditworthy,
but notes in the heading: “without responsibility on the part of this bank or its officials”.
Simpkins relies on the written report and places the advertisements when, in fact,
Com-media is not creditworthy. Can Simpkins recover the amount paid for the
advertisements?

Keywords: Simpkins, advertising, agency, television, newspaper, advertisements,

Com-media, banker, creditworthy

Issues: Does Com-media’s banker owe a duty of care for negligent misstatement it had given to
Simpkins?
Rules: negligent misstatement
● Negligence: an action for negligence is about careless behaviour and can,
therefore, be applied to any form of human activity.
● The breakthrough came in 1964 with the decision of the House of Lords in
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 where the Court
unanimously held that, in certain circumstances, the law will imply a duty of care
in the making of statements, and that a negligent, though honest, statement may
give rise to an action for damages.
● The High Court’s decision in Shaddock & Associates Pty Ltd v Parramatta City
Council (1981) 150 CLR 225 establishes that the duty extends to the supply of
information as well as the provision of advice. The case also demonstrates that
there is no necessity for the defendant to be in the business or profession of giving
advice. The High Court held that the Council committed the tort of negligence
causing pure economic loss and was liable to the plaintiff for its losses. The
Council was under a duty of care in relation to the provision of advice or
information (the Court held that no distinction should be drawn between “advice”
and “giving of information”) because it was of a kind that called for skill and
competence that the Council professed to possess. Further, the Council knew or
ought to have known that the plaintiff intended to act or rely on the information.

Applications:
● Com-media’s banker-the defedant had noted in the heading “without responsibility on the
part of this bank or its officials”, which means the bank had effectively disclaimed
responsibility for the reference it had given to Simpkins. However, in Hedley Byrne &
Co Ltd v Heller & Partners Ltd [1964] AC 465, the house of lords rejected earlier
suggestions that liability for the negligent misstatement, apart from contract, was limited
 to where there was a fiduciary relationship. A duty of care in making statements could
arise in circumstances where a “special relationship” existed between the parties. The
Court did not detail the precise nature of this relationship, although it is clear that it
would involve some element of reliance.
● In this case, Simpkins relied on the banker’s statement, which turned out to be false. Like
in Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225, the
banker knew or ought to have known that the recipient intended to act or rely on the
information(reasonably foreseeable).

Conclusion: Simpkins is likely to be awared damages for the nrgligent misstatement.

 17.TORT LAW
Case 2:
Gerard is a 19-year-old football player who suffers a fracture of his cervical spine as a
result of a football game. Gerard is of slight build, low weight and has a long thin neck.
He alleges that football league should have taken steps to ensure that players with his
physical characteristics are made aware of the risk of injury when playing in the front
row. The football league denies any duty of care and claims that Gerard was aware of the
risks in a known high-risk game and that Gerard’s team had carried out appropriate
exercises during training. Advise Gerard.

Keywords: Gerard, football player, low weight, neck, football league, risk, training

Issue: Can the football league argue voluntary assumption of risk as a defense?
Rules: a successful plea of voluntary assumption of risk is a complete defense; however, it is
rarely raised successfully. The defendant must prove that the plantiff knew of the risk that the
plaintiff fully appreciated the risk and accepted it freely and willingly.
In cases involving an obvious risk, legislation applies to introduce a presumption of
awareness of the risk on the part of the plaintiff. The onus is placed on the plaintiff to
show that he or she was not aware of the risk: Wrong Acts 1985 (Vic), s 54.

Application:
● In this case, Gerard knows about his own physical characteristics, and he was also awared
of the risks in this high-risk game, it can be assumed that he fully appreciated the risks
and accepted it freely and willingly. The action that Garard participated in the game
shows he was willing to accept the risks. Moreover, the football league also provide
appropriate exercises during traning, which shows they were carefull in traning the
players, too.
● Therefore, the football league would be able to argue voluntary assumption of risk as a
defence

Conclusion: The football league can use voluntary assumption of risk as a defence to protect
them from Garard’s allegations
 18.PRE-EXISTING DUTIES
Tracy runs a confectionary store specialising in expensive imported lollies from around the
world. Every evening, Tracy takes the money out of the cash register and transfers it to her safe.
On one evening, two armed men come in to the store as Tracy is transferring the money and steal
$5,000 in cash from the register. Tracy calls the police after the robbers have left her store.
Constable Harold comes to Tracy’s shop to get a statement from her about what happened. Tracy
tells Harold identifies and arrests the armed robbers but Tracy refuses to pay him the money.
Does she have to give Harold the money?
Keywords: Tracy, lollies, cash, register, robbers, Harold, money
● Issue: Whether there is a valid consideration in Tracy’s promise.
● Rules: Good consideration, performing an existing contractual or public duty.
Carrying out a duty which a party is already obliged by law to perform is not
consideration for a promise made in exchange for that performance. Therefore,
performance of a public duty will not amount to consideration unless it involves
doing something in addition to ott in excess of that legal duty
● Application: Harold is a police officer and obliged by law to seek and arrest
criminals as part of his public obligations as a meber of the police service. So his
promise is something that is related to his job and is not sufficient consideration.
Harold has therefore not offered anything ‘of value’ into the agreement and
cannot sue for the money.
If he can prove he did more that his job required. Eg: working outside hours, he
may have a better chance of claiming the money.
● Conclusion: Tracy is unlikely to be bound to pay Harold any reward money as the
police has a pre-existing duty to identify and arrest the thief.
 19. PRE-EXISTING DUTIES
Case 1:
Bill won a contract to carry out carpentry work on a large building renovation project for
Nicholson Ltd. Bill ran into financial difficulty, partly because his price was too low. He
told Nicholson he could not meet their deadline and, in fact, be unable to finish.
Nicholson Ltd. agreed to pay him an extra $50,000 to complete the work. Bil did the
work, but he has only received $5,000 of the agreed extra payment. Advise Bill of his
legal rights.
Keywords: Bill, carpentry work, renovation, Nicholson Ltd., extra payment, legal rights

● Issue: Can Bill sue Nich for not paying him the extra payment that Nich agreed?
● Rules:

+ Pre-existing duty: a promise to perform an existing contractual obligation (eg to crew a boat or
build a house or supply goods or services) or a promise to perform a public duty that a person is
already bound to perform (eg police, paramedics, fireys) is not valuable.

● Application:

- Because Bill and Nich have a contract, thus, Bill have to perform the work base on his
existing contractual obligation.

- The important thing is that every revision of the contract need additional considerations”

- Although Bill and Nich agreed on the revision of the contract, Bill did not perform any
additional exchange for Nich in return for the 50.000 do la. Thus, there are no consideration here,
and the contract cannot be revived.

● Conclusion: Bill cannot claim more money from Nich. The contract cannot be revived,
and the original contract still valid.