MCD2070 IN-TRIMESTER TEST ARRANGEMENT AND REVISION
References:
6th edition 7th edition
Chapter 2 pp 45-81 Chapter 2 pp 45-83
Chapter 3 pp 110-122 Chapter 3 pp 112-124
Chapter 4 pp 152 -183 Chapter 4 pp 163 -194
Chapter 5 pp 191- 220 Chapter 5 pp 201- 231
Chapter 6 pp 229-264 Chapter 6 pp 237-273
Arrangements:
• Test case studies and questions will be issued on the day of the test.
• Students must attempt the test. If you are unable to sit the test, you must submit an in-
trimester special consideration form.
• Students will attempt and complete the test using the Moodle platform.
• You can only attempt the test ONCE – make sure you have stable internet connection
before attempting the test!!
• The test is worth 20% of your total marks for this subject.
Allowed materials:
• The test is open book!!
Date and Time:
• Date: Friday, 11 August
• Time: 4:30PM – 6:15PM (Melbourne time)
Structure:
• PART A: Questions based on concepts and case laws regarding NEGLIGENCE and
CONTRACT FORMATION (Offer, Acceptance, Intention and Consideration) and
EXPRESS TERMS. Mode of questions are delivered as mix-and-match and multiple-
choice questions. Worth 5 marks.
• PART B: CONTRACT FORMATION (Offer, Acceptance, Intention and
Consideration) questions based on two case studies. Worth 7 marks.
• PART C: Problem solving question on EXPRESS TERMS based on a case study.
Worth 8 marks.
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Revision:
• Attempt the Moodle quizzes and tutorial exercises!!
• Attempt the practice test questions (which can be found in the briefing but also as an
exercise in Moodle)!!
• Ask questions to your teacher!!
• Read and examine the annotated sample HD and Fail answers.
• Familiarise yourself with the following cases:
Donoghue v Stevenson Todd v Nicol
Rasbora v JCL Maine Williams v Roffey Bros & Nicholls (Contractors) Ltd
Modbury Triangle v Anzil Waltons Stores Ltd v Maher
Club Italia v Ritchie Pinnels Case
March v Stramare Foakes v Beer
O’Dwyer v Leo Buring Stilk v Myrick
Romeo v Conservation Commission of the Northern Territory Olley v Marlborough Court Ltd
Woods v Multi-Sport Holdings Pty Ltd. L’Estrange v F Gracoub Ltd
Harris v Bulldogs Rugby League Club Toll v Alphapharm
Caltex Oil v The Dredge Willemstad DJ Hill v Wright
Perre v Appand Oceanic Sun Line Shipping v Fay
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd Interfoto Public Library v Stilleto
Chappel v Hart Oscar Chess v Williams
Caltex Oil v Willemstead, Van Den Esschert v Chappell
Hedley Byrne & Co Ltd v Heller and Partners Ltd Insight Vacations v Young
Esso Petroleum v Mardon Hardchrome Engineering Pty Ltd v Kambrook Pty Ltd
L Shaddock & Associates v Paramatta City Council Thornton v Shoe Lane Parking Ltd
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords State Rail Authority of New South Wales v Heath Outdoor Pty
Ltd
Tepko Pty Ltd v Water Board Sydney Corporatuon v West
R Lowe Lippman Figdor & Franck v AGC Ltd Photo Production v Securicor
Pharmaceutical Society of Great Britain v Boots Cash
Chemists Ltd
Thomas National v May & Baker
Harvey v Facey Equuscorp Pty Ltd v Glengallan Investments Pty Ltd
Hyde v Wrench Ross v Allis-Chalmers Australia Pty Ltd
Goldsborough Mort & Co Ltd v Quinn J J Savage and Sons Pty Ltd v Blakney
Masters v Cameron
Carlill v Carbolic Smoke Ball Company
Routledge v Grant
Turner, Kempson & Co Pty Ltd v Camm
Rose and Frank Co v J R Crompton & Bros Ltd
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Generative AI tools cannot be used in this assessment task:
In this assessment, you must not use generative artificial intelligence (AI) to generate
any materials or content in relation to the assessment task.
You can use generative artificial intelligence (AI) such ChatGPT or other AI tools
for study purposes and to learn about your topic, but you cannot include any AI-
generated materials in the final submission. This includes copying and pasting text
and then editing.
Conditions of Open Book Assessment:
While the test is open book, students are expected to exclusively refer to case
law/legislation/rules sourced from the Moodle site, textbook and other unit materials
(such as lecture slides and tutorial materials).
Students will be penalised and lose marks for referring to rules/case law/legislation
that are NOT covered in these materials.
USE UTMOST CAUTION IF YOU WILL BE RELYING ON GOOGLE OR
CHATGPT FOR YOUR REVISION!!!
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The following questions should also be helpful for your revision.
Please ensure the law and rules are properly applied in your application and relevant case law or
statute are cited.
PLEASE NOTE THE QUESTIONS ARE NOT INDICATIVE OF THE ISSUES THAT
MAY BE PRESENT IN THE TEST.
CONTRACT FORMATION REVISION QUESTIONS
PRACTISE QUESTION 1
Majorie carried out certain improvements and repairs on a bungalow. The bungalow formed part
of the estate of her husband's father who had died leaving the property to his wife and children.
After the work had been carried out the brothers and sisters signed a document stating in
consideration of carrying out the repairs they agree that they will pay $1,000. However, the
payment was never made.
Can Majorie sue for breach of contract? Use case law to support your answer.
PRACTISE QUESTION 2
Graham telephoned Jane, his cousin, on 8 September offering to sell his grand piano for $15,000.
During the conversation, Graham stated that he’d keep his offer open until 5pm on 15 September
and that if Jane wishes to accept the offer, she should send a letter.
Jane decided to accept Graham’s offer and sent an email on 12 September. On 14 September, Jane
went on a three-day holiday to northern Australia, where internet connection is very limited.
Graham received and read Jane’s email on the 12 September but decided not to honour her message.
Instead, he changed his mind about selling the piano and sent an email to Jane’s computer on 13
September withdrawing the offer of the piano for sale. Jane returned from her holiday on 17
September, at which time she read Graham’s email.
Is there a legally binding contract between Graham and Jane in relation to the piano? Justify
you answer with relevant case law and legislation.
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PRACTISE QUESTION 3
20 August Ali calls Michael offering to sell his electric guitar for $2,000. He tells Michael that he will keep
the offer open until 25 August.
21 August Ali wishes to revoke the offer but lost Michael’s phone number. He does not bother to find out
Michael’s phone number and instead sells the guitar to Jessica, another interested buyer.
22 August Michael attempts to call Ali to accept the offer but Ali does not answer his phone. He texts Ali
instead.
23 August Ali reads Michael’s message but does not respond – hoping his silence is enough to indicate he
no longer wants to sell the guitar to Michael.
24 August Michael confronts Ali and asks why he is ignoring him. Ali tells him the offer is withdrawn and
the guitar is sold. Michael tells Ali he should not have sold the guitar as he accepted the offer,
and he broke his promise. Ali argues he already sold the guitar to Jessica and it’s too late.
Does a valid contract exist between Michael and Ali?
Using relevant statute and case law, discuss the consequences of:
• Ali calling Michael on 20 August
• Ali revoking the offer on 21 August
• Michael sending the text message on 22 August
• Ali receiving the text message on 23 August.
• Michael confronting Ali on 24 August
For each of the following, identify the relevant stage of contract formation and explain what statute
or case law applies. One of your answers must identify when the contract is created.
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PRACTISE QUESTION 4
Gary is the owner of a scallop boat. In 2011, Gary leased the vessel to his cousin, Sam, for 10
years at an annual rental of $10,000. In 2018, it became apparent that scallop numbers were
declining, and Sam soon realised that he would be unable to meet the annual rental charge unless
the catch improved. He approached Gary and advised him of his fishing and financial difficulties.
Gary said that he was prepared to halve the annual rental until the catch improved and, accordingly,
the rental charge was reduced to $5000. Gary signed a document to this effect.
In 2022, the catch improved to such an extent that Sam can resume paying $10,000 a year. Gary
was delighted and advised Sam that not only did he have to pay $10,000 this year, but also the
$15,000 forgone by Gary in the previous three years. Sam argued that he shouldn’t have to pay the
$15,000 because he relied on Gary’s promise. Gary refuted the promise cannot be enforceable,
because part-payment of the debt as final discharge cannot be good consideration.
Advise Sam whether he must pay the $15,000 claimed by Gary.
PRACTICE QUESTION 5
Kim Ltd (Kim) is an importer and distributor of laptop computers. Having received numerous
complaints in relation to faulty software provided with its laptop computers, Kim engages a
software engineering firm named SoftWiz Ltd (SoftWiz) to design a new operating system for
their computers.
SoftWiz agrees to design the software for $140,000 and to commence work immediately.
Representatives from SoftWiz commit to delivering the finished project by 30 November.
At the end of October, however, it is clear that the software will not be completed by the end of
the year, let alone by the deadline. The Chief Executive Officer (CEO) of Kim contacts SoftWiz
and demands an explanation.
The software engineers at SoftWiz inform the CEO of Kim that labour costs have risen and that
the only way the software will be finished is if Kim agrees to increase the contract price to
$180,000. This will enable SoftWiz to employ additional software engineers to write the
software and to meet the deadline.
The CEO agrees that Kim will pay the extra amount of $40,000 on top of the original contract
price. SoftWiz engages extra computer programmers and manages to complete the software by
the 30 November deadline. The CEO, however, refuses to have Kim pay the extra $40,000
promised.
Advise SoftWiz whether Kim is legally bound under the contract to pay the full $180,000.
Give reasons for your answer and cite relevant case law.
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EXPRESS TERMS REVISION QUESTIONS
PRACTISE QUESTION 1
Bill was a schoolteacher who had a large vegetable patch in a field behind his home. He loved
gardening in the field, but as he was aging, he decided to buy a tractor to till the soil. He went to a
local dealer called Hot Rods where he found the AD43 model. Bill entered negotiations with the
sales manager of Hot Rods, Jacko. Their negotiations went like this:
Jacko: This is one of the most reliable tractors in Germany and Australia according to
customer testimonials!
Bill: That does sound good. What is your opinion?
Jacko: I’ve used tractors for decades Bill and let me tell you this. The AD43 is the Ferrari
of tractors my friend!
Bill: Look I trust you but what I need is specific. I need the tractor to be able to climb very
steep slopes – ideally up to 40 degrees.
Jacko: No worries! This tractor can easily climb a mountain!
Bill: You sure? What about when it rains?
Jacko: It’s all fine mate! Would I tell a lie?
Feeling confident about this tractor, Bill agreed to purchase the AD43. The tractor was delivered
later in the week.
After using the tractor for a few days, Bill is very unhappy for three reasons:
1. It can climb slopes in good weather but not when it rains,
2. According to two experts, a defect in the fuel line makes an explosion during very hot weather
a real possibility, and
3. Customer testimonials (in Australia and Germany) about the AD43 were actually very negative.
Advise Bill (the plaintiff) whether any express terms (under common law) that were
breached by Jacko (the defendant). In your answer, determine whether the oral
representations made by Jacko are express terms
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PRACTICE QUESTION 2
Patrick takes his mobile phone to MobTach’s mobile phone shop for repair. While the phone is in
the shop awaiting repair, an employee of the shop deliberately destroyed all the mobile phones in
the shop in order to take revenge on MobTach for not giving him a pay rise. Patrick’s mobile phone
is destroyed.
When Patrick returned to collect his mobile phone, he discovered that it was destroyed by the
disgruntled employee. When Patrick demanded for a refund, the shop owner told him that they
will not be responsible because of the exclusion clause written on the back of the receipt which
reads:
MobTach will not be responsible for any damage or defect to its customer’s mobile phones
caused by the negligence of its staff.
Patrick does not recall the employee telling him about this exclusion clause.
Address if the exclusion clause will be an express term and is it effective?
PRACTICE QUESTION 3
Mrs Rude took a white satin wedding dress to the defendant's shop for cleaning. She was handed
a 'receipt' and left the garment for cleaning. Mrs Rude did not read the receipt which contained the
following conditions:
1. Articles are accepted on condition that the company is not liable for any damage however
arising, or delay.
2. Any garment not collected on the day the customer is notified will be sold and the profits
retained by Chemical Cleaning without any notice to the original owner of the garment(s) as we
do not have room to store uncollected garments.
No other dry cleaner had such a harsh clause in their contracts. Mrs Rude was notified by text that
her dress was ready on Tuesday, but she was unable to collect it on that day as she had to work
late. She went to Chemical Cleaning to collect her dress on Wednesday, but was told that her dress
had been sold as she did not collect it on Tuesday when she was notified. Mrs Rude is livid and
had to be stopped from attacking the customer service person. The customer service person showed
Rude the clause on the receipt and said ‘it’s in the contract. You should have read the exemption
clause on the receipt’.
Advise Mrs Rude if the salesperson was correct. Are the exemption clauses on the receipt
terms of the contract?
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PRACTICE QUESTION 4
Farmco Ltd is a large farming business. They purchased a tractor from SCO Ltd for $37,000. The
tractor is to be used on Farmco properties to tow a trailer. The signed contract for the sale of the
tractor contains the following clauses;
A. The buyer agrees that SCO will not provide any refund on any of its vehicles returned-with
faults after 7 days from purchase.
B. This written contract is the entire agreement between the parties.
Two weeks prior to signing the contract, Farmco were promised by a SCO salesperson that the
tractor would operate with Farmco's XP200 trailers.
Farmco states that the only reason they are buying the tractor is to tow the XP200. After the tractor
is delivered, Farmco discovers that the tractor is not compatible with the XP200 trailers.
Advise the parties under common law (express terms) whether:
1. The representations in the signed contract are express terms
2. The oral representation made by SCO Ltd is an express term of the contract