Rosemary owns a florist in Dubbo, NSW. Recently, she telephoned her supplier in Sydney and askedthat she be forwarded 1,000 yellow ‘Sunshine’ roses on the following day’s six o’clock aeroplane. The supplier sends the flowers to Rosemary the following morning on the 6 am aeroplane, an air service that has recently commenced. Rosemary did not know of the new service and was thinking of the 6 pm plane. At 5 pmshe travels to the airport to collect the flowers from the 6 pm plane but finds that they have perished at the airport in the day’s heatwave.
Rosemary does not believe that she should have to pay for the flowers and asks your advice. Advise Rosemary whether or not she has to pay for the flowers and explain your reasons.
(Please do not discuss the question of whether or not the airline or airport may be responsible and/or liable for the cost of the roses)
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QUESTION 2 (10 Marks)
Melissa is the owner of an electronics store in Miranda, Sydney. Barry has been employed by Melissa as the store’s salesperson for the past two (2) years. One day, Samuel comes into the store shopping for a new plasma television. He appears to be interested in the NEC 60 inch model. Barry has been instructed by Melissa not to sell the 60 inch model NEC for anything less than $2,000.00. Nonetheless, after 40 minutes of discussion between Barry and Samuel, Samuel convinces Barry to sell him the 60 inch NEC television for $1,900.00. The next day, after discovering that Barry had disobeyed her instructions and sold the 60 inch NEC television for $1,900.00, Melissa called Samuel and insisted that he return the television for a refund of his money.
Is Melissa able to insist Samuel return the Television? Why/Why not?
QUESTION 3 (10 Marks)
Chen owns a Chinese restaurant in Sydney. He has recently decided to add a new range of rice based dishes to his menu. He has placed a large sign in the front window of his restaurant that reads:
‘Come on in for the best Chinese food in town – you will not be disappointed – all dishes now made with only fresh ingredients!’
Wen also owns a Chinese restaurant in a nearby street. Wen is annoyed about Chen’s sign because she suspects that it is enticing customers away from her restaurant. In addition, she has recently accused Chen of misleading customers as she knows that Chen uses some canned products in his dishes. Chen argues that while some of his ingredients are taken from tins, they are fresh from the tin.
Advise Wen of her prospects (if any) of successfully bringing an action against Chen under the Australian Consumer Law. Assuming that she has reasonable prospects of success, what remedy should she seek and why?
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QUESTION 4 (10 Marks)
Kate has decided that she would like to purchase a café. While holidaying with her family for two weeks in a unit on the beach at the coastal town of Port Macquarie, Kate notices that the ‘two beans’ café located in Port Macquarie’s main street is for sale. That evening, while at a social function with some friends, Kate is introduced to Malcolm. Approximately ten minutes into their conversation, Malcolm reveals that he is an accountant. Kate immediately mentions that she is in need of a good accountant to check over the financial position of the two beans café that she was interested in purchasing. Malcolm then said:
“I buy my coffee there every morning on the way to work. Their beverages and the quality of their food are excellent. The place is always busy so they must be making loads of money. I do not think you will have any problems purchasing that business.”
Kate continued to talk to Malcolm for a while longer and the pair shared a couple of more drinks before Kate left to return to her unit for the evening. One week later, Kate engaged the services of a solicitor and purchased the two beans café. Six months have now passed and the café is not making a profit. In fact, Kate has discovered that the business has been running at a loss for the past 12 months.
Kate has come to see you. She wants to know whether she can sue Malcolm for negligence. Advise Kate.
QUESTION 5 (10 Marks)
Best Price Turf Supplies agreed to deliver 100 square metres of ‘Buffalo Magic’ turf to Green Thumb Nursery. When their driver arrived at the nursery he found a person who he thought was an employee waiting in the loading bay. The person was wearing a Green Thumb Nursery uniform and appeared to know what he was doing. He signed a delivery receipt for the turf with the driver. The person was in fact a thief and after the driver had left, he loaded the turf into a truck and disappeared.
Does the loss fall on the seller or the buyer? Explain your reasoning.
[Adapted from Gibson & Fraser, Business Law, 2012 (6th Edition), Pearson Australia, p.576]
QUESTION 6 (10 Marks)
Barry is a builder who runs a successful home renovation business as sole trader. He comes to you for advice on the following matter:
Barry wants to form a new renovations business with an electrician and a plumber. The three tradesmen want to form a company but are unsure of the type of company suitable for their new business. Whilst they expect to have about ten employees working for them, they have not yet estimated the expected annual gross operating revenue or the anticipated gross assets for the end of the first financial year.
In your advice to Barry, outline the various types of company that can be registered and the reasons why each type would or would not be suitable. Include the requirements concerning the application for registration and company name.
