Tuesday, 20 May 2014

Answers for Exam paper : paper BUS 015 Feb 2014 Business Law

Feb 2014


1 (C)
3 (B)
4 (C)
5 (D)
6 (A)
7 (B)
8 (C)
9 (A)
10 (B)

Q 2.

Applicable Law:

a) This is a simple one ...we expect the student to analyse 

Formation = O + A + I + C 

Application of Facts to Law:

When Glenn approached TT to hire a lorry, this was an invitation to TT to make an offer. When TT proposed terms to Glenn, this was an offer. When both signed on the agreement, there was acceptance by Glenn.

There is clearly an intention to do business with each other.

The consideration was the payment of $2,000 a moth for a period of one year.


All elements of the formation of the Contract were fulfilled and hence a contract is formed.

Question 2 b) 

Applicable Law:

After the formation of a contract the next question to be determined would be the terms of the Contract.

There are three categories of terms, namely, Conditions , warranties and inominate terms.

Conditions are terms which are critical and go to the root of the contract. When conditions are breached , the injured party is entitled to treat the contract as discharged and sue for additional damages. 

Warranties are on the other less important, when breach, the injured party cannot terminate the contract but is allowed to sue for damages (Bettini vs Gye).

Inominate terms are terms which are unclear and is capable to be read either as a condition or warranty.

However when a breach occurs, it will be clear whether that term should have the remedies like a condition or warranty.

(Hongkong Fir vs Kawasaki Shipping) In this case the court held that 20% downtime was a warranty and not a condition , the hirer of the ship could not terminate the 1 year rental of the ship.

Application of Facts to Law:

The two terms in para 1) and 2 ) are unclear. 

In para 1) and 2) If during the year, the vehicle breaks down for 5 days it would have the effect of a warranty and it has the effect of a condition of it breaks down 30-50% of the time in 1 year. 

In this case, the signed a one year contract, and the vehicle had only a 3 week down time, which is 3/52 X 100% = 0.057% downtime.

This is less than the 20% downtime in HongKong Fir's case whcih held 20% downtime was a breach of inominate term with the effects of a warranty.


Glenn cannot terminate the contract as the effects of a warranty would apply in this breach of an inominate term.


a)There are two types of remedies available under Cobtract Law:

i) Common Law remedies refers to payment of monetary damages as compensation
ii) Equitable remedies refer to Court Orders of Specific Performance or Injunctions  

The three major aspects to consider are:

i) Causation of the damage
ii) remoteness of the damage 
and iii) Mitigation of damages.

b) Applicable Law:

Under the law of damages, the court will not award any damages if the loss is too remote or unforseeable. Hadley vs Baxendale, Victoria Laundry, and the Heron II.

Application of facts to Law:

Since the sales numbers of both Range A and B is know to the supplier, the loss is not remote and is forseeable.


The damage is not remote and Joyce can claim for both losses and therefore the total amount of $10,000 is claimable.


Applicable Law:

Mitigation as referred to in the above part a)  (teachers comment: see how I saved time by referring to the above part a? ), is one of the aspects to consider in the award of damages. The injured is required to help reduce the losses suffered by her by taking reasonable action ( Bruce vs Calder).

Application of Facts to Law

There is a two week shopping season before Christmas, if Joyce accepts the goods and is able to make some sales in the last 5 days before Christmas, she would have reduced her losses. Under the law Joyce as an injured party has the legal duty to help reduce her losses.


Joyce can only claim for losses from loss of sales from the 14th to the 6th day before Christmas.

Question 4 


}An agent is a person who has the authority of the principal to establish legal relations on the principal’s behalf with a third party
}rThe resulting contract binds Principal  and Third Party and does not bind the Agent .

There are 4 ways an Agency can be created:

Express Authority
Implied Authority: By position, by necessity and by cohabitation
Ostensible or Apparent Authority
By Ratification.

b) Teacher's comments: Reminder : use the triangle to analyse

Applicable Law:

In order for apparent authority to be applied successfully, 4 conditions must be met:
¨i)There was a representation that the agent had authority
¨ii)The representation must be made by the principal or by persons who had actual authority
¨iii)The third party must have been induced to enter into the contract by showing reliance based on the representation
¨iv) The principal himself must have the ‘capacity’ to enter into the contract
Summers vs Solomon

Application of facts to Law:

¨i)When Philip does not take action to inform his suppliers about the termination ,there was a representation made by Philip  that the Audrey had authority

¨ii)The representation was made by Philip who had actual authority

¨iii)The supplier was induced to enter into the contract by showing reliance based on Philip's  representation
¨iv) Philip has the ‘capacity’ to enter into the contract.

The facts here are similiar to the case of Summers vs Solomon.

Conclusion:  Philip has effectively entered into a contract with the Supplier. And Philip has to honour the payment to supplier. 


Dispelling Apparent Authority:

To prevent third parties from raising the argument of apparent authority applying in different situations, pragmatic approaches adopted include:

qi) Disclosing to third parties the limits of authority granted to agents (this is happening in company directors/officers situations).
qii)Placing public notices in newspapers advertising an agent’s termination/ceasing of employment.
qiii)Notifying third parties individually of the ceasing of agency power.


Applicable LAw:

An agent is entitled to be paid for her commission. However she is not entitled to act illegally to recover her commission through Fraud.

Application of facts to Law:

Audrey is entitled to sue for her $1,000 compensation. However she is not entitled to use fraud and breach of warranty of authority  to recover her commission.


Philip is liable to pay her $1,000 while Philip has the right to counter-claim her for $4,000.

Q 5 

a) The Contract with PM: (Teachers comments : If students use my diagram and structure for company law, you will analyse Part a) very quickly)

Applicable Law:

A Director of a Pte Ltd company must not act in conflict of interest. Aberdeen Railways vs Blaikie Brothers.

Such conflict of Interests could be approved and  waived by the Boards of Directors of both companies.

Application of Facts to Law:

Joh is a Director of HC and he is also a shareholder of PM. It is possible that he may use his powers of Directorship to negotiate a price that would be to the disadvantageous to HC and advantageous to PM since he would stand to benefit more as a shareholder.

There is a clear conflict of interest here. Since there is no disclosure of this conflict and it is not waived, John is in conflict of interest.


The contract can be declared void by either party that suffered a disadvantage.

Payment of $2,000

Applicable Law:

A Director of a Pte Ltd company must obtain a secret profit unless approved by the Board of Directors.

Application of Facts to Law:

The collection of sum of money given from the opposing side is clearly a secret profit and such money belongs to Hong Contractors. It will be up to the Directors of HC to decided whether the Company should keep the money or approve the release of this money to John.


John can be sued to recover the $2,000.

Applicable Law:

Under the Companies Act a person is disqualified by:
qUndischarged bankruptcy, Section 148. 
qUnfitness due to past conduct as a director, Section 149. 
qPersistent default in filing documents, Section 155. 
qConviction of certain criminal offences, Section 154.

Application of Facts to Law:

Peter has been convicted of an offence under S155 persistent default and this would automatically disqualify him from taking position a Director.


Peter is disqualified from acting as a Director under the Companies Act.


Saturday, 23 November 2013

Intriguing tricky Multiple choice question

B Law exam Q8 multiple choice :

You can expect 2-3 tricky questions in the Multiple choice section, this one is one of the trickiest I have seen, the correct answer is C.

A,B and D are similiar in which the 14(2) DOES NOT apply since it clearly DOES NOT apply.

that leaves the best answer as C.  If you did know that there are two kinds of buyers , consumer and business ie B to B and B to C.

The answer does not address the Business buyer in Harlington vs Hull, but at least it does address the consumer buyer. Therefore C is correct on the best answer basis.

Monday, 4 November 2013

Model Answer CA1 May 2014

Overall Issue
In this case, the major issue is Marcus’s concern for if there is a formation of a contract and the validity of the Exclusion Notice. A contract is a consensus d idem and a meeting of minds between both contracting parties. Agreement to rights and obligations are recognised and enforceable by law. The 4 elements of a contract are offer, acceptance, consideration and intention to create a legal relation. Exclusive Notice is also known as Exemption Clauses, where terms which exclude or limit the liability of the party in breach who relies on the clause for protection. Subsequently, Marcus will be advised about this issue.

Part A

Applicable Law 1

This issue concerns an invitation to treat. An invitation to treat is to invite others to make an offer or invitation to commence negotiation.

Applicable Law
An invitation of treat is not an offer. It invites someone to make an offer to them. It is made under special circumstances to the world at large. Advertisements are usually regarded as invitation to treat. The offer is made by potential customers by responding to advertisement . (Partridge v Crittenden)

Apply Facts to Law
An advertisement is made in newspapers which offered promotion packages for pond fishing, is inviting someone to make an offer to them.
 (Partridge v Crittenden)Next, when Marcus contacted FF, he was to arrange a visit to the pond. He was not making an offer. Therefore, it is not an offer but an invitation to treat.

 Freddie Foo is not liable as an advertisement is only an invitation to treat. No contract can be formed if an invitation to treat is accepted.

Applicable Law 2

This issue is about offer and counter offer  in  contract law.

Applicable Law
An offer is when an offeror indicates willingness to enter into a contract on specific terms          to an offeree. This offer must be communicated by verbally, by conduct or in writing to the          offeree.

Apply Facts to Law
Freddie made an offer by showing Marcus the Brochure with the prices.

Marcus selected Package C which cost $6000 but has a credit limit of $5000 could not             accept this offer. He has rejected Freddie’s offer and counter-offered $5000 for               package C.
Freddie, by verbally quoting another fresh offer of  $5000 to Marcus for package C and gave him a free pass. Hence, he has made another  valid fresh offer. The offer is now made to Marcus, a specific person.

Freddie has made  a fresh offer. The offers are accepted by Marcus and a potential contract is formed.

Applicable Law 3
This issue concerns whether there was valid acceptance in this case..

Applicable Law
Acceptance is the expression of assent or concurrence to terms of the offer. It must be an unqualified and unconditional agreement to the offer, or else it amounts to a counter-offer. Acceptance must be occurred orally, in writing or by conduct. It is communicated when received by offeror.

Apply Facts to Law
Freddie signed a standard contract with  Marcus. This is acceptance by Freddie’s conduct. “Marcus signed it together with a payment slip”, this is an act/conduct that showed Marcus has unconditionally agreed to the offers and it is not counter-offer. It satisfies the general rule of acceptance.

There is a valid acceptance from Marcus to the offeror, Freddie. Freddie is liable towards Marcus.

Applicable Law 4

This issue is about consideration in the contract law. This element of a tit-for-tat distinguishes a bargain (basis of business transactions).

Applicable Law 
Consideration is something given, promised or done by one party in exchange for a promise by another. It is the “price” paid for a promise. It need not be adequate but it must be sufficient.

Apply Facts to Law 
Marcus by paying with his credit card of $5000 has given sufficient  consideration and it need not be adequate (at market value). Therefore the discounted value is sufficient consideration.

The consideration is valid.

Applicable Law 5
This issue concerns intention to create legal relations in a contract law.

Applicable Law
The agreement would not be binding if such an intention is absent.   To objectively assess the existence of such intention, it is helpful to categorize agreements into commercial agreements and social and domestic agreements. Where there is a close relationship of love, it becomes a social and domestic agreement.

Apply Facts to Law
There is a distant friendship between Marcus and Freddie and is therefore not as close.  Both must therefore have intended agreement to be legally binding.

Therefore, there is an intention to create legal relations. A  contract is exists.

Overall Conclusion
A valid contract is formed whereby the applicable law above fulfilled the offer, acceptance, consideration and intention to create a legal relationship. There is a valid binding contract exist between Freddie and Marcus.

Part b

The issue is regarding the exemption clause. To determine the validity of the exemption, we generally assess four important factors: incorporation, construction, presence of unusual factors and neutralization by UCTA. Furthermore, the exemption clause can be incorporated by two ways: signature and notice. And the UCTA is aimed at protecting victims of negligence in commercial transactions.

Applicable Law
Where an exemption clause is given in a notice, which notice must be brought to the attention of the other party either before or at the time the contract is made. In Olley v Marlborough Court case, the exclusion notice was void, because the clause was brought to customer’s attention after the contract was formed. Nevertheless, in the case of a written contract that needs a signature, any exemption clause becomes automatically incorporated when the contract is signed. In L’Estrange v. Graucob case, the court held that it no matter whether L read it or not, the exemption clause was incorporated when she signed the contract.
According to section 2(1) of UCTA, an exemption clause that excludes liability for death or personal injury due to negligence is void. In Thompson v T Lohan (Plant Hire) Ltd case, the court held that there is no exclusion of liability at all, because the accident caused the death of the victim.

Application of  Facts to Law
We can assume there are two different situations.
The first situation: the exclusion notice was not in the contract. In this case, Freddie did not mention any exemption clause before Marcus signed the standard contract. The exclusion notice which was written in a signboard was brought to Marcus’s attention after the accident happened.
The second situation: the exclusion notice was presented in the contract. Marcus did not read the contract precisely, and he signed it quickly. The exclusion notice was incorporated into the contract.   
However  the fishing pond which provides service to normal people should to be safe for its customers. For instance, some fences should be installed in some dangerous area, so as to prevent customers fall into the pond. However, the owner of fishing pond did not realize the risk. It is his negligence. Additionally, Marcus got injuries due to the negligence.

If Marcus was in the first situation, the exclusion notice cannot be incorporated into the contract. If he was in the second situation, the exclusion notice would be void. So Fishy Friend is liable for Marcus’s injuries.


Marcus can sue Fishy Friend and claim for damages.

Friday, 20 September 2013

What to do when you fail...

It dawned upon  me that I should create a section on the topic of failure after one student e-mailed me recently as follows:

Hello Mr. Fong ,
Good evening! 
My name is XXXXX and I am from ClassXXXX  I just got my exam result and I failed Business Law. Could you please give me some advice about how to learn Business Law better? I am really interest in learning Business Law and I really enjoy your classes in Sem4, after classes I would do my revision and prepared lessons before classes. 
Thank you so much for your reading and long for your advice.
Thank you.

Best wishes,

Hello Mr. Fong,
Good morning!
Thanks for replying my email last night,it is very useful!
I still have some question, so sorry to disturb your time. Could you please tell why I failed the exam and which part I should improve?
Thank you so much.
Best wishes,

Well, you guys know that Bizlaw is one tough course. And If you fall into the failure statistics and desire success next term, read on...:

You can also read this at the start of the course in case you are curious.


b) find out what went wrong : get to the diagnostics page and resolved not to repeat mistakes.  It's ok to make mistakes , but not ok to repeat mistakes.

Failure Diagnostics checklist: 

How to check whether you are going to fail this course

SS = Go watch Study skills videos  in businesslawvideos blogspot

M= Go watch Motivation Videos in businesslawvideos blogspot

Name of Student:
o                         A) Still in dreamland that the Law paper is easy when in fact is it the toughest

o                         B) Still in the holiday mood and your brain needs time to “warm-up”… until a couple of weeks before the exam

o                         C) Not coming for class or disappearing during class thinking that you can get by with the slides and textbook alone

o                         D) poor effort at preparing for  the tutorials, in time, and comprehensively
o                           Buddies: please check their tutorials

o                         E) Thinking the lecture was easy to understand and not doing your readings after each lesson and summarizing the lecture into a mind map

o                         F) Getting distracted in class, lack of active listening skills

o                         G) Thinking you can get by studying someone else’s Mind Map and ending up confused

o                         H) Not motivated to seeking help or easier ways of understanding the topic when you get stuck.

o                         I ) Multi-tasking with while studying or during class

o                         J) Thinking that failure will happen to the guy next to you and NEVER you.

o                         K) Expecting spoon feeding like a Secondary School Student  without additional reading of the textbooks

o                         Last minute cramming and studying

o                         StudyBuddy’s Name:
o                         ______________________
o                         Declaration: I hereby swear to tell my buddy the truth, the whole truth and nothing but the truth about where he is heading.


c) dont start any studying again during your holidays, when the term comes up you ll be sick and lose interest. instead, do the following:

a) go to my blog:

i) keep watching all videos/movies on motivation until you feel better about yourself. 
ii) keep watching study skills to attain expert status (many times)
iii) Law movies 
iv) improve your poor English by reading  ibooks and using audiobooks to accompany you. 

        For example: Audio books accompaniment http://www.youtube.com/results?search_query=brave+new+world+audiobook&oq=brave+new+world+au&gs_l=youtube.1.1.35i39j0l9.15024.15548.0.19422.

This helps with you speech and pronunciation
if you are a girl here is :

don't force yourself to read a boring book, google the review first , read the review, if its with your interest then start reading and if after 2 chapter it turns boring skip to the next.

In the ibooks function you can tap on the word and the dictionary pops out ... use that .

d) don't forget to exercise everyday.

When term starts , then you start studying with new skills this time.
          e) Watch this again : http://www.youtube.com/watch?v=BcXYB-4kOl4


and here is a list of advice from people who made mistakes when they were young.