(b)Would your answer be different if the exclusion clause was found on a document which Jack
had to sign?
END OF ASSIGNMENT
INSTRUCTIONS TO STUDENTS
• The task must be submitted electronically ONLY, through TURNITIN (link on
vUWS), by 11:59pm of Sunday 2 May 2021. Failure to do so will attract a
penalty of 10% per day.
• Students should refer to the vUWS website for the marking criteria applicable to
this task.
• The word limit is 2,000 words (excluding referencing).
• Answers should be formatted and presented with double line spacing to allow for
feedback comments
700254 Enterprise Law – 2021.1 Page 2 of 4 Assessment 2 – take-home assignment
QUESTION ONE (TOTAL: 24 MARKS)
John, Kay and Tom, recent business graduates from Eastern Sydney University set up an
accounting and financial services practice, Red Brick Road. They decided to formalise their
business arrangement preparing a document called “The Business Agreement”.
As per the business agreement, they each provide various accounting and financial services
advice to clients and co-own the assets of the business as well as share profits and losses.
After a few months, they took out a business loan from Tara, their close acquaintance. The loan
agreement provides Tara to receive a share of the profits as part of her loan agreement which is
in writing. John and Tom contributed $50,000 to the partnership, while Kay put in $20,000. Kay
has no assets outside of the partnership while John and Tom have substantial other assets outside
the partnership.
Kay, specialises in providing investment advice, while John and Tom do most of the accounting
work for the firm’s clients. Kay is approached for investment advice by Mr Black, a retiree. Kay
convinces Mr Black to invest in Fusion Ltd a newly formed investment company. Kay assures
Mr Black of Fusion ’s financial standing noting that her husband was the managing director of
the company. Mr Black invests $200,000 in Fusion Ltd. It subsequently transpired that Fusion
Ltd was a two dollar company with no assets and it went into liquidation shortly after Mr Black
invested his money.
In addition to the above, Kay who regards herself as knowing it all, orders in writing, using the
firm’s letterhead, 5 photocopy machines at $800 each as well as computer equipment worth $2000
from Tech Wizards Pty Ltd. Due to a recent experience with a previous deal she had struck with a
supplier, she has been forbidden by her partners under the terms of the Business Agreement from
making any further orders for the firm. However, this time Kay thinks it will be different and
believes her partners will approve her actions. When the machines and equipment are delivered,
John and Tom immediately send an email to Tech Wizards Pty Ltd advising them that as Kay had
no authority to enter into the contracts, the business refuses to accept them.
In the interim, John and Tom have since discovered that Kay has set up her own business (with a
similar business model as the current business) and that she had been using some of the
photocopy machines and computer equipment for her own business.
Kay has since left for a business trip to Bermuda and was never seen again.
Please answer the following questions in the IRAC format, using relevant sections
of the Partnership Act 1892 (NSW) and case-law:
(a) Advise whether there is a partnership in existence. Further, please advise if Tara is a
partner of the business.
(b) Advise Mr Black as to what rights he has against the business as well as John and Tom in
respect of the losses he has suffered.
700254 Enterprise Law – 2021.1 Page 3 of 4 Assessment 2 – take-home assignment
(c) Advise whether Tech Wizards Pty Ltd is able to successfully sue Red Brick Road and John
and Tom for the outstanding payment of $6,000 for the photocopy machines and computer
equipment.
(d) Advise whether Kay could be held liable for her actions in setting up her own business and
using the photocopy machines and computer equipment for her own business.
QUESTION TWO: (TOTAL: 26 MARKS)
Please use the IRAC format to answer the following questions to determine whether
a contract exists in each of these scenarios. Please refer to relevant legal principles
and case-law in answering each of the questions.
(a) Daniel places the following advertisement in the local newspaper:
“Lost puppy. Labrador. Black colour. Last seen Old Eastern Road. $100 reward if found.”
Gary, who has not read the advertisement, finds the puppy and returns it to Daniel.
Subsequently Gary’s sister sees the advertisement and shows it to Gary. Gary contacts
Daniel asking for the $100.00. Is he legally entitled to it?
(b) Vincent enters a supermarket looking for some dinner. He approaches the deli area and
picks up a hot chicken (from the Farmdale brand) resting in the warmer. He notices a price
sticker on it of $10. Vincent proceeds to the checkout and puts the chicken down on the
counter. At that moment, he hears a store announcement: “Lilydale chickens are going out
for $5.00 customers, that’s right $5.00! ” Vincent tells the checkout operator that he wants a
$5.00 Lilydale chicken and that he would put the Farmdale chicken he had back. The
checkout operator says: “No, you can’t do that. You’ve brought it this far, you have to have
this one.” At this point she has not swiped the bar code on the price tag. Advise Vincent as
to whether he is legally entitled to the $5 chicken.
c) Paul decided to renovate his garage. He engaged David to do the work at an agreed
price of $20,000.00 and completion date of 30 September. After the work had begun, Paul
discovered that his extended family would be visiting in July. He promised to pay David
another $3,000.00 if he could have the work completed by 10 July. David finished the work
by 10 July but Paul refuses to pay the extra $3,000.00. Advise David.
d) Trudy promised her daughter Veronica that she would pay for her tuition fees in a wellrenowned art school in France. Trudy now believes that Veronica is not responsible
enough to live overseas on her own and refuses to pay for the fees. Can Veronica
enforce her mother’s promise?
700254 Enterprise Law – 2021.1 Page 4 of 4 Assessment 2 – take-home assignment
QUESTION THREE: (TOTAL: 10 MARKS)
Jack is travelling overseas for an extended period and decides to garage his Tesla with Security
Whiz Pty Ltd.
Jack leaves his car with an employee of Security Whiz Pty Ltd and pays the storage fees after
which he is handed a document that has the word ‘receipt’ printed in bold type on its face. On
the back of the document are terms relating to storage of property, which includes the following
clause:
“Security Whiz Pty Ltd, its employees, agents and contractors hereby exclude any liability for
damage or loss to property held in storage.” The manager does not draw Jack’s attention to the
conditions.
As Jack was leaving the office premises, he observes a noticeboard at the back of the office
premises he was at, where he paid for the fees. The noticeboard has a number of terms on it
including the following term:
“Owners of cars park at their own risk.”
The manager later realises that the vehicle had been parked in an incorrect garage by one of
his employees. He asked another employee to move the car to the correct garage bay, in the
course of which, due to it being his first day on the job, the employee collides with a pillar and
causes considerable damage to the vehicle.
Please answer each of the following questions in IRAC format using relevant
legal principles and case-law:
(a)Advise Security Whiz Pty Ltd as to whether the exclusion clause on the receipt and
noticeboard can be easily relied on to escape liability for damage to Jack’s Tesla?