Assignment on Management Law - Doc

Running head: MANAGEMENT LAW
Management Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Question 1........................................................................................................................................3
Issue.............................................................................................................................................3
Rules............................................................................................................................................3
Application..................................................................................................................................4
Conclusion...................................................................................................................................4
Question 2........................................................................................................................................4
Issue.............................................................................................................................................4
Rule..............................................................................................................................................5
Application..................................................................................................................................6
Conclusion...................................................................................................................................7
Question 3........................................................................................................................................7
Issue.............................................................................................................................................7
Rules............................................................................................................................................7
Application..................................................................................................................................9
Conclusion...................................................................................................................................9
Question 4........................................................................................................................................9
Issue.............................................................................................................................................9
Rule............................................................................................................................................10
Application................................................................................................................................10

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Conclusion.................................................................................................................................10
Reference list.................................................................................................................................11

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Question 1
Issue
Whether the agreement between Tom and Susan was valid
Rules
A contract becomes valid if both the parties satisfy the essential elements of the contract.
The fundamental elements that render a contract valid are offer, acceptance, intention,
consideration, free consent and legal capacity1. A party to a contract cannot be compelled to
enter into a contract and neither a contract can be formed without the consent of the parties. The
consent given by a party is not said to have been exercised freely, if such party was subjected to
undue influence, fraud, duress or misrepresentation while entering into the contract. It is
imperative for a contract to become enforceable that the parties have entered into the contract
with his/her consent.
In the event, any party to a contract establishes that he has been subjected to duress while
entering into the contract, the party becomes entitled to avoid his/her contractual liabilities that
arise out of the contract. Under any given circumstances, duress arises if either party to the
contract compels the other party to enter into the contract by intimidating such party, his body or
property or economy. In Barton v Armstrong [1973]2, the court observed that any person who is
forced to enter into a contract under physical duress, such party is entitled to evade the contract
irrespective of the fact that the duress caused was not the main reason why the parties have
entered into the contract.
1 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
2 [1973] UKPC 27, [1976] AC 104.

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Application
On the facts here, Tom was successful businessperson who was a millionaire and was in
his late 50s. He falls for Susan who was 20 over a dating website. He proposed Susan and
wanted to marry her. Susan resided in Europe and was promised by Tom that if she marries him,
she would bring her to Australia. She was also promised to be provided with a car, house and
safety. However, prior to the wedding, Tom asked Susan to sign a contract that would limit her
claims up to $100000 in case of any divorce proceeding. Tom had threatened her to enter into the
contract otherwise he would not marry her and she would be forced to leave Australia. Susan,
eventually, entered into that contract.
In the given circumstances, the principles relating to Duress would become applicable
according to which, Susan has not entered into the contract with a free consent and was subjected
to duress while entering into the contract. This is clear from the fact that had Tom not
intimidated her prior to the marriage, she would not have entered into such contract. However,
Susan is entitled to evade her contractual liabilities that arise from such contract as was ruled in
the Barton’s case.
Conclusion
As per the legal rules regarding the application of the duress while entering into the
contract, it can be established that the agreement between Tom and Susan is not valid and Susan
is entitled to avoid her contractual liabilities.
Question 2
Issue
Whether Steve is legally bound to buy the Truck from Jason

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Rule
A contract becomes valid and enforceable in the court of law if there is a valid offer and a
valid acceptance of such an offer. A valid contract becomes legally binding upon the parties to
the contract. The other essential element that renders a contract valid is the certainty of the offer
made to form a contract3.
There is a clear distinction between an invitation to offer or treat and an offer as was
established in the case Pharmaceutical Society of Great Britain v Boots Cash Chemists
(Southern) Ltd [1953]4. An invitation to treat is a mere invitation and it cannot be considered as
an offer to enter into a contract. In the context of the given scenario, the promissory estoppels
doctrine would become applicable.
In order to make a claim of promissory estoppel, the aggrieved party is required to establish
its essential elements, which are as follows:
 There must be an existence of legal relationship or an anticipation of the existence of
such legal relationship between the parties to the contract;
 One of the parties to the contract must make a promise or representation to another party
to the contract;
 The party to whom such promise or representation is made must rely on such
representation or promise made as was established Waltons Stores (Interstate) Ltd v
Maher [1988]5;
 The party relying on such promise or representation had suffered detrimental
consequences;
3 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
4 [1953] EWCA Civ 6.
5 [1988] 164 CLR 387.

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 The circumstances must be such that it signifies how unfair and inequitable it would be, if
a party is permitted to exempt from his or her liability or break the promise;
Under such circumstances, the court may exercise its discretionary powers to allow
compensation to the aggrieved party as it deems fit. Such compensation should be made in terms
of the losses suffered by the aggrieved party for breaking the promise6.
Application
In the given scenario, Steve was interested in purchasing cars and he came across an
advertisement published by Jason online. Steve showed much interest in the car and went to see
the car personally. Steve went to see the car personally three tomes and almost spent four hours
while inspecting the car. However, after spending hours in inspecting the car and after acquiring
all relevant information about it, he stated to Jason that only if the car had a turbo engine or
leather seats and tinted window, he would have purchased the car. If the car was not short of
such qualities, he was looking for the exact car model.
Here, there was no formal offer made by Steve, as there were no essential elements such
as delivery and price, which must be present in order to render a contract as valid. However,
relying on the statements made by Steve, Jason invested $50000 for the purpose of installing
leather seats, tinted Windows and a turbo engine in the car. In the case scenario, there is
anticipation that there is an existence of legal relationship between Steve and Jason. This can be
established from the fact that the amount of hours spent by Steve on inspecting the car, it is
obvious that any prudent person would have construed that Steve was interested and serious in
purchasing the car.
6 Lee, Rosa. "Promissory Estoppel and Proprietary Estoppel: A Response to the Myth of a Unifying Approach."
King's Student L. Rev. 6 (2015): iii.

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Steve made a representation with respect to the purchase of the car if the car had the
features described by him. Jason relied on such representation made by Steve and consequently,
Jason installed the described representation. Hence, Jason made significant investments for
installing the described representations and would suffer significant losses, if the Steve does not
purchases the car. Therefore, under such circumstances, Steve shall be prevented from acting in
compliance with his promise as per the legal rules of promissory estoppels.
Conclusion
Steve is liable to purchase the car from Jason according to the doctrine of promissory
estoppels. The court may also award compensation to Jason for the losses suffered in case; Steve
does not purchase the car.
Question 3
Issue
Whether the conduct of Carl amounts to negligence
Whether he is entitled to any defense against the negligence claim
Rules
A conduct or omission amounts to negligence of such conduct or omission is in
contravention of the duty of care that the person owed to the aggrieved person. The legal
principles of negligence has been established through the case Donoghue v Stevenson [1932]7
where the court ruled that one owes a duty of care to his neighbor. A ‘neighbor’ is a person who
may be directly affected by the risk of harm that result from the conduct or omission of a person.
If the risk of harm is foreseeable, the person who can foresee the harm that is likely to result
7 [1932] AC 522.

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from the conduct or omission of such person, must take exercise reasonable care to avert such
risk of harm8.
The Civil Liability Act 2002 (NSW) stipulates statutory provisions with respect to the
negligence committed by an individual or corporation. In Vaughan v Menlove (1837)9, it was
ruled that an objective test should be applied to determine whether there has been a breach of
duty of care. According to the test, the breach of duty of care committed by the infringer is
compared with the duty of care, which would have been exercised by any reasonable person in
the similar circumstances. If it is established that the reasonable person would have taken
additional measures, the defendant shall be held liable for committing a breach of the duty of
care.
In the case Barnett v Chelsea & Kensington Hospital [1969]10, the court held that the
‘but for’ test should be applied for establishing that the injury sustained or loss suffered is the
direct result of the breach of duty of care. In other words, the plaintiff would not have suffered
injuries but for the negligent act by the defendant, the plaintiff sustained injuries.
The defendant may apply the defense of contributory negligence, which implies that the
plaintiff had voluntarily assumed the risk of harm caused to him. Such person who had
knowledge about the risk of harm that is likely to result from such conduct and had not taken
reasonable measures that would have been taken by any prudent person, cannot claim damages
for the negligence.
8 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
9 (1837) 3 Bing N.C. 467.
10 [1969] 1 QB 428.

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Application
On the facts here, Carl was a novel chef but he did not have skills to prepare a giant
Fugu. He was aware that he did not know how to cook sashimi and any person who eats it might
suffer injuries. Hence, as per the test of foreseeability, Carl owed a duty of care towards Harry.
Any reasonable person would not have prepared the sashimi if he were aware that the cook had
no knowledge about preparing such dish. Hence, Carl can be said to have committed a breach of
duty of care. If Carl had not cooked the dish, Harry would not have had the dish and fallen sick,
which implies that applying the ‘but for’, test Carl is proved negligent as his action directly
caused harm to Harry.
However, Carl may use contributory negligence as a defense because Harry ate the fish
dish with the knowledge that a professional chef should have prepared the dish. However,
despite such knowledge, Harry had the fish, which implies that his conduct amounted to
contributory negligence as Harry had voluntarily assumed such risk.
Conclusion
Carl is negligent but he may use contributory negligence as a defense against the negligence
claim.
Question 4
Issue
Whether Betty is entitled to any rights under the Australian Consumer Law

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Rule
The Australian Consumer Law (ACL) is stipulated under Schedule 2 of the
Competition and Consumer Act 2010 (Cth)11. According to section 56 of the ACL, the buyer has
a right to claim a replacement, refund or a claim for repair in respect of the goods or services if
the same does not match with the description made by the supplier regarding such goods or
services in terms of trade and commerce.
If such goods and services do not match with the description made by the supplier, it shall
amount to a breach of the consumer guarantees that is safeguarded by the Australian Consumer
Law. However, such supply of such goods or services must not take place in any auction
procedure.
Application
On the facts here, Betty had purchased iPhone 8 as per the description of the features that
was provided on the website. As per the description of the phone, it had 5x digital zoom but
when she purchased the phone, she realized the camera of the new phone was only capable of 3x
digital zoom and battery performance of the phone was poor as well.
Under such circumstances, it is a clear infringement of section 56 of the ACL according
to which, the phone did not have the quality of camera that was provided in the online
advertisement.
Conclusion
Betty is entitled to claim for a replacement, refund or repair of the phone from the Apple
Company.
11 Competition and Consumer Act 2010 (Cth).

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Reference list
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Barton v Armstrong [1973] UKPC 27, [1976] AC 104
Competition and Consumer Act 2010 (Cth)
Lee, Rosa. "Promissory Estoppel and Proprietary Estoppel: A Response to the Myth of a
Unifying Approach." King's Student L. Rev. 6 (2015): iii.
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] EWCA
Civ 6
Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
Vaughan v Menlove (1837) 3 Bing N.C. 467
Waltons Stores (Interstate) Ltd v Maher [1988] 164 CLR 387