Contract & Consumer Law Assignment

This document is an assignment for Contract and Consumer Law. It covers topics such as contract formation and validity, contractual performance, E-Contracts, enforcing rights and obligations, and consumer protection law. It also includes assessment activities and instructions for completing them.

Contract and Consumer Law Assignment 1601
Contract & Consumer Law
Assignment
Submission Instructions:
Key steps that must be followed:
1. Please complete the Declaration of Authenticity at the bottom of this page.
2. Once you have completed all parts of the assessment and saved it (eg. to your desktop
computer), login to the Monarch Learning Management System (LMS) to submit your
assessment.
3. In the LMS, click on the file "Submit Contracts & Consumer Law assignment” in the
Contracts & Consumer Law section of your course and upload your assessment file/s
by following the prompts.
4. Please be sure to click “Continue” after clicking “submit”. This ensures your assessor
receives notification – very important!
Declaration of Understanding and Authenticity*
I have read and understood the assessment instructions provided to me in the Learning Management System.
I certify that the attached material is my original work. No other person’s work hasbeen used without due
acknowledgement. I understandthat the work submitted may be reproduced and/or communicated for the purpose
of detecting plagiarism.
Student Name*: Date:
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the
above student declaration.

Contract and Consumer Law Assignment 1601
Important assessment information
Aims of this assessment
This assessment covers the application of legal principles in contract and consumer law.
It requires the completion of a set of questions in relation to:-contract formation and validity;
contractual performance and the principles of E-Contracts.
Enforcing rights and obligations, along with consumer protection law is also covered.
We look at and assess restrictive trade practices and financial services consumer protection.
Business based scenarios present different types of contracts and the capacity to enter into a
contract. There is an assessment task which covers the working use of E-contracts; important in
today's progressive society.
Also, what is lawful and unlawful in the area of consumer protection is explored.
Preparing your responses
Please refer to the beginning of the text and familiarise yourself with the sections on 'Case
Studies, Scenarios and Problem Questions', and 'How to answer a question'. This will assist you to
formulate your response.
Marking and feedback
This assignment contains 9 assessment activities based upon nine chapters of the text book. Each
assessment activity contains specific instructions.
Chapter 1 is not assessed in this unit as it is assessed in FNSTPB505 Property Law.
Chapters 8 and 9 are not assessed in this unit as they are assessed in FNSTPB504 Corporations and
Trusts Law.
This particular assessment forms part of your overall assessment for the following unit of
competency:
 FNSTPB503 Apply legal principles in contract and consumer law
Grading for this assessment will be deemed “competent” or “not-yet-competent” in line with
specified educational standards under the Australian Qualifications Framework.
What does “competent” mean?
These answers contain relevant and accurate information in response to the question/s with
limited serious errors in fact or application. If incorrect information is contained in an answer, it
must be fundamentally outweighed by the accurate information provided. This will be assessed
against a marking guide provided to assessors for their determination.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
What does “not-yet-competent” mean?
This occurs when an assessment does not meet the marking guide standards provided to
assessors. These answers either do not address the question specifically, or are wrong from a
legislative perspective, or are incorrectly applied. Answers that omit to provide a response to any
significant issue (where multiple issues must be addressed in a question) may also be deemed
not-yet-competent. Answers that have faulty reasoning, a poor standard of expression or include
plagiarism may also be deemed not-yet-competent. Please note, additional information regarding
Monarch’s plagiarism policy is contained in the Student Information Guide which can be found
here: http://www.monarch.edu.au/student-info/
What happens if you are deemed not-yet-competent?
In the event you do not achieve competency by your assessor on this assessment, you will be
given one more opportunity to re-submit the assessment after consultation with your Trainer/
Assessor. You will know your assessment is deemed ‘not-yet-competent’ if your grade book in the
Monarch LMS says “NYC” after you have received an email from your assessor advising your
assessment has been graded.
Important: It is your responsibility to ensure your assessment resubmission addresses all areas
deemed unsatisfactory by your assessor. Please note, if you are still unsuccessful in meeting
competency after resubmitting your assessment, you will be required to repeat those units.
In the event that you have concerns about the assessment decision then you can refer to our
Complaints & Appeals process also contained within the Student Information Guide.
Expectations from your assessor when answering different types of assessment questions
Knowledge based questions:
A knowledge based question requires you to clearly identify and cover the key subject matter
areas raised in the question in full as part of the response.
Good luck
Finally, good luck with your learning and assessments and remember your trainers are here to
assist you 
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 8 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2 - 3hours
Question 1.1
What is the fundamental difference between an agreement and a legally binding contract?
Question 1.2
Identify four contracts about which a client may seek advice from a financial services provider.
The term agreement and contract are often used interchangeably, but contract law does not consider
them to be synonymous. An agreement implies an offer made by a person showing his willingness to be
bound on certain terms followed by the acceptance of that offer by another. However, a contract
implies an agreement, which is enforceable by law. An agreement may or may not create legal rights to
the parties whereas a contract must result in the creation of legal rights of the parties. An agreement
generally requires to elements, namely offer and acceptance whereas a contract requires five elements,
namely offer, acceptance, consideration, capacity of the parties, intention to create legal relations.
Every contract is accompanied by an agreement, but an agreement may or may not be followed by a
contract.
Four contracts about which a client may seek advice from a financial services provider are contract for
loan, insurance contract, investment contracts and commercial contracts.
Unit: FNSTPB503
Assessment Activity 1:
Achieving Contract Formation ( Chapter 2)

Contract and Consumer Law Assignment 1601
Question 1.3
Lucy is a client whose tax and business matters you have dealt with for some time. She has been married for
10 years to Desi but they are currently separated whilst they consider divorce. Desi runs his own separate
business. They have entered into various private agreements during the life of the marriage concerning
money. Lucy wants to know under what type of circumstances would a private agreement between a husband
and wife be considered contractually binding?
Question 1.4
What is a 'letter of intent' and in what circumstances are such documents likely to be used?
The agreements made between husband and wife during their lifetime of the marriage, are called
domestic agreements. These agreements made during the ongoing relationships are, generally made
without any intention of creating legal relations. However, the agreements made after the breakdown
of the relationship may result into the creation of legal relationship. Therefore, agreements made
between Lucy and Desi during their lifetime of the marriage are not contractually binding, but the
agreements entered into after the breakdown of the marriage may create a legal relationship.
In literal sense, letter of intent implies to a document containing the statement of the intentions of the
person writing it. In legal sense, letter of intent is an instrument, which contains certain agreements
that are entered into parties prior to the finalisation of those agreements. Letter of intent are created
to mark the beginning of a business deal or a project that was being entered into by the parties and
contains the main business and contractual agreement that will establish the foundation of the final
contract.
Letter of intent is generally used to obtain an initial agreement on the terms of the contract before its
finalization, to address the confidentiality of the matters negotiated, to make an agreement regarding
the procedure to be followed in the negotiation.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 1.5
In what commercial situation may a client seek a letter of comfort? What three forms may it take? What is a
'letter of comfort'? Name a commercial situation where 'letters of comfort' are commonly used.
Question 1.6
What are some of the ways an offer and acceptance can be communicated between the parties to a contract?
Question 1.7
List some of the ways an offer may lapse.
A bank or a lending institution lending money to a subsidiary company will require a guarantee from
both the parent and the subsidiary company, which will contain the request for the loan. In this case,
the bank will require a letter of comfort from the parent company to secure the repayment of the loan.
At times, the parent company may decline to provide a letter of comfort for policy reasons or for
keeping the balance sheet healthy. In such a case, the provision of the letter of intent might get
compromised. Accordingly, a letter of comfort may take the following forms:
 An undertaking that the parent company will comply with the financial commitment it has
towards the subsidiary company,
 An agreement by the parent company ensuring the use of its influence to aid the subsidiary to
meet its obligations,
 An acknowledgement provided by the subsidiary company regarding the contract entered into
by the subsidiary company.
A letter of comfort is a document provided by the parent company to a bank providing loan to its
subsidiary company ensuring the repayment of the loan by the subsidiary company.
A letter of comfort is used when there is a presence of a parent-subsidiary relationship between
companies, the subsidiary company is availing a loan from a bank or a lending institution and the bank
requires the repayment of the loan to be secured by a guarantee provided by the parent company.
An offer or acceptance may be communicated by a letter, emails, verbal communication, telephonic
communication, text messages, or performing a condition which marks the offer or acceptance of the
contract.
The ways in which an offer may lapse are revocation of an offer, rejection of the offer, if not accepted
within stipulated time or within reasonable time, on death of the offeror before acceptance of the offer
or if any condition is stipulated for the acceptance and the condition is not satisfied.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 1.8
Valentine spotted a lovely blackwood bookcase in an antique shop owned by Tristan, which had a price tag of
$5,000. Valentine approaches Tristan and tells him she will take the bookcase for $3,000. Tristan says that isn't
possible but how about $4,000? Valentine says no, how about $3,500? Tristan says no to which Valentine
replies that she will accept Tristan's offer of $4,000. Tristan does not reply but turns to serve another customer
Isolde, as Valentine steps away from the counter to take a call on her mobile phone.
Valentine then turns to pay for the bookcase, but Tristan says he has already sold it to Isolde for $5,000.
Valentine is furious and says that she and Tristan had a contract and the bookcase was hers. Is Valentine
correct? Give reasons for your answer.
No, Valentine is not correct. There was no contract between Tristan and Valentine. In this case, the
subsequent bargaining regarding the price amounts to counter offers. Tristan’s offer for $4,000 was
rendered rejected by Valentine’s counter offer of $3500, which was again rejected by Tristan. As
Tristan’s offer for $4,000 was already rejected, therefore further agreeing of Valentine for $4,000 was a
counter offer, which again was not accepted by Tristan. Thus, there was no contract between Tristan
and Valentine regarding the bookshelf.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 7 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 2.1
A minor does not have the capacity to enter into a contract which will be enforceable against them, except in
exceptional circumstances. Why? What are those exceptional circumstances?
There are certain contracts, which are binding on both the parties where one of the parties is a minor.
One of the contract, which is binding on a minor is the contract for necessities. The contract for
necessities is made binding on the minor because in absence of such an exception the other party
would not agree to provide necessities to the minor. The contract for employment of a minor is binding
against the minor, which can be repudiated on the minor’s attaining adulthood. However, the contract
of employment must not contain unfair or oppressive terms to be imposed on the minor.
Unit: FNSTPB503
Assessment Activity 2:
Achieving Contract Validity (Chapter 3)

Contract and Consumer Law Assignment 1601
Question 2.2
If a person who is intoxicated enters into a contract with another person will that contract always be voidable
by the intoxicated person when they return to sobriety? Give reasons for your answer.
Question 2.3
Tom, a client who is a commercial builder, entered into a contract with Roger to undertake construction of an
office building. Two months ago, Tom paid Roger $15,000 under a clause in their contract which required Tom
to pay this sum if Tom's work breached the National Construction Code. Tom has just been informed that the
clause of the Code he allegedly breached is invalid because of an inconsistency with environmental protection
legislation. Can Tom recover his $15,000? Give reasons for your answer.
A person entering into a contract under the effect of intoxication generally may repudiate the contract
on being sober. The contract becomes voidable by the person under intoxication. However, the onus of
proving the consent to the contract to given under the effect of intoxication lies with the person who
was intoxicated. Moreover, the person then intoxicated must also establish the impairment of his
understanding of the terms of the contract for the intoxication.
In this case, the breach of clause of National Construction Code has occurred while that clause was still
in force and the compensation was paid accordingly, which was also paid prior to the invalidation of the
same. However, the clause was declared invalid afterwards. Therefore, before the declaration the
clause was applicable and has the force of law. Thus, tom cannot recover his $15,000 as at the time of
the payment the clause was in force and the invalidation was declared afterwards.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 2.4
In what relationship does the presumption of undue influence arise?
Question 2.5
What is the definition of a guarantor? What is the legal responsibility of a person who agrees to be a guarantor
on a loan for someone else?
Question 2.6
A young couple wishes to take out a sizeable home loan and, at the insistence of the bank, your client, asks the
husband's elderly Chinese parents to guarantee the loan. The parents have very limited spoken and written
English. Under what circumstances would you advise your client, the bank, that they could successfully rely on
this guarantee should the young couple default on their loan?
The relation in which one person is in a position to control the will of another then the former is said to
have a presumption of undue influence over the latter. For example, an employer, generally has an
undue influence over his employee.
A person, who guarantees the payment of the debt of another person on that person’s default to pay
the same, can be termed as a guarantor.
The guarantor is under a legal obligation to make the payment of the loan of some other person, whose
repayment he had guaranteed, on that person’s failure to repay the same.
Generally, a person needs to be in an immediate relationship with the debtor to sign as a guarantor. In
this present case, the elderly parents of the husband qualifies in the immediate relationship
requirement. However, the parents of the debtor are Chinese by nationality which prohibits them to be
a guarantor, as Australian Law only allows citizens of Australia and New Zealand to be a guarantor.
Moreover, having a poor understanding of English and the terms of the contract being communicated
to them in English, their understanding of the contract of guarantee cannot be said to be proper.
Hence, bank should not rely on the on the guarantee of the old parents.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 2.7
Inspired by the myriad of cooking shows on television, Dawn is interested in investing a sum of money she has
recently inherited in a restaurant and therefore seeks the advice of Global Domination Advisors Pty Ltd.
Angel is appointed as her advisor and after some discussion, Angel recommends she invest in 'The Witches
Cauldron', assuring Dawn that the restaurant has been very successful and that its future is even brighter -
investment monies are now being sought so it can franchise and that an excellent profit within the next year is
assured. Dawn takes Angel's advice, but she wants extra funds to invest so she will receive a higher return.
Dawn approaches her neighbour, Tara, whom she has befriended. Tara suffers from a mild mental disability
and depression and does not cope well in the wider community, particularly since the death of her mother.
Tara relies on Dawn for advice and support. Dawn asks Tara to lend her $20,000 so she can make it into
$40,000 for her. Tara asks if this will make Dawn happy, when Dawn says yes, she gives her the money, and
Dawn asks her to sign a document to the effect that Tara has loaned the money to Dawn interest free, to be
repaid if and when the restaurant venture succeeds to Dawn's satisfaction.
Sadly, after 6 months, The Witches Cauldron is losing money and Dawn has lost most of her investment
monies. Dawn discovers that Angel gave his advice relying on financial information which was out of date and
incorrect. He also ignored the fact that the restaurant was about to be prosecuted for breach of their license
conditions. Dawn is furious. Tara's niece has now also discovered Dawn's behaviour and insists that she repay
Tara, claiming that the loan agreement is not valid.
Advise Dawn and Tara if there is any action and against whom they may take it, giving reasons for your
answers.
Dawn may bring an action against Angel as being a financial advisor Angel must have ensured the
advice to be honest, efficient and fair and must have maintained the competence in providing the
financial advice.
Tara was suffering from a mental disability while signing the contract with Dawn regarding the
repayment condition of the loan. Hence, the contract is voidable at the option of Tara and Tara has the
option of repudiating the contract claiming the repayment of the loan from Dawn.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Assessment Activity 3:
Identifying and Enforcing Rights and Obligations (Chapter 4)
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 6 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 3-4 hours
Question 3.1
Why is it important to identify the ‘terms’ of a contract?
Question 3.2
Using examples, describe how you would explain to a client the differences between conditions and
warranties, and why the differences matter?
Terms of a contract implies the provisions that forms the contract. The parties to the contract must
understand the terms of the contracts in the same sense while entering into a contract. If the parties to
a contract agree to enter into the contract having two different understanding of the terms of the
contract, then the contract will have the option of repudiation. Therefore, it is evident that to
understand the contract before entering into it in the same sense, the parties must first identify the
terms of the contract.
A condition is a term of the contract, which forms the main part of the contract the breach of which
would imply the breach of the contract. However, a warranty implies a term collateral to a contract the
breach of which might create a claim for damages but does not amount to breach of the contract. In
case of contract of sale of a product, the delivery of a defective product would be regarded as a breach
of condition as that will result in the breach of the contract. However, the purchase of extended
warranty would amount to warranties whose breach will lead to a refund of the extra payment but
would not amount to breach of the contract.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 3.3
How would you explain to a client the effect of a signature on a contractual document? Would your
explanation be different if one of the parties had not bothered to read the terms of the contract?
Give reasons for your answer.
Question 3.4
List three contractual transactions which are required by Australian legislation to be recorded in a written
document.
When a person puts his signature on a contractual document, he is deemed to have entered into the
contract. All the terms of the contract becomes binding on that person as a result of the signature in
the contractual document.
A signature in the contractual document would amount to creation of legal relations irrespective of the
fact whether the person has read the terms of the contract or not. He will be bound by all the terms
even if he failed to read them before signing.s
The three contractual transactions which are required by Australian legislation to be recorded in a
written document are:
1. Contracts effecting sale land
2. Contract for credit and consumer leases
3. Contract for performing domestic building work of value $12 000 or more.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 3.5
Michele has undertaken an inventory of the electrical appliances throughout her business and discovers that
some require cleaning and repair. Michele takes the appliances to Rolando the repairer, with whom she has
not dealt before. Unfortunately, whilst the goods were waiting to be repaired, Rolando’s repair shop was
burgled and the appliances stolen. Rolando refuses to accept liability for the loss and draws Michele’s
attention to a small sign on the door leading into a back room of the shop which says “No liability for loss or
damage to goods accepted under any circumstances”. Rolando points to these same words printed on the
back of the receipt Michele was handed when she deposited the appliances for repair.
Is Rolando correct in his refusal? Give reasons for your answer.
Question 3.6
What is a standard form contract? What is the difference between a commercial standard form contract and a
consumer standard form contract? Use examples to explain your answer.
The terms of the contracts are binding on both the parties whether or not the parties have bother to
read them at the time of entering into the contract or not. In this case, Michele accepted the receipt
without bothering to read the no liability clause of the other party and entered into the contract.
Therefore, the terms are binding on both the parties. Hence, Ronaldo is correct in his refusal.s
A standard form contract is a contract in which the terms and conditions of the contract are set by one
of the parties to the contract and the other party has no other option except for either agreeing to the
same or reject the offer.
A consumer standard form contract is governed by the common law whereas a consumer standard
form contract is governed by the consumer laws.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity
instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 6 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 4.1
In what circumstances can a third party (‘stranger’) to a contract be held liable in the event of a breach?
'subsist' or cone into existence? How is copyright a valuable asset in business?
Question 4.2
In certain circumstances, rights can be assigned due to operation of law. List three circumstances where such
assignment can occur.
A person, who is not a party to the contract cannot be held liable for inducing a party to the contract to
breach its term. However, in case the injured party can prove the breach to be deliberate or
intentionally encouraged, the third party so inducing the breach is liable for committing a tort.
Three circumstances where assignment can occur due to operation of law are:
1. The rights of a deceased person in a contract, existing at the time of his death, can be enforced
by the executor of his will, after that person’s death.
2. The Official Receiver in Bankruptcy or the appointed trustee is vested with the estate of the
Bankrupt.
3. Under the Consumer Law of Australia, a consumer in a consumer-supplier relationship may
bring an action against the third party manufacturer or importer.
Unit: FNSTPB503
Assessment Activity 4:
Contractual Performance, Managing Termination and Breach (Chapter 5)

Contract and Consumer Law Assignment 1601
Question 4.3
Sheila entered into a domestic building work contract with Bruce to build her first home for $200,000 in six
months. The contract set out that progress claims would be paid when the footings were poured, at
completion of walls, at completion of roof cover, second fix carpentry and practical completion. All obligations
are met until the progress claim for completion of the walls has been paid, after which Bruce becomes busy
with other work and stops working on Sheila’s house, despite her protests. When no further work has been
completed after a further six months, Sheila takes action for breach of contract against Bruce and hires
another builder to complete the work. Sheila wants Bruce to pay back the first two progress claims.
Will she be successful? Give reasons for your answer.
Question 4.4
What is the purpose of a force majeure clause? Under what circumstances will they apply?
No, Sheila will not be successful to claim the two progress claims from Bruce. The principle of quantum
meruit will be applicable here. Bruce will be entitled to the two progress claims as he has performed
the amount of work the cost of which are the progress claims.
Force Majeure clause is placed in a contract to address the consequences that might occur with the
occurrence of an event upon which the parties to the contract have no control.
These clause generally apply under the following circumstances, namely:
 War
 Strike
 Terrorism
 Riot
 Crime
 Act of God.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 4.5
Paige is a financial consultant who has entered into a contract to work exclusively for Annie’s company for two
years. Three months into the contract, Annie informs Paige that her services are no longer required because
she wants to take the company in a different direction. Paige intends to sue Annie for damages for breach of
contract.
Explain the matters the court will take into account in assessing the measure of damages they will award
Paige.
In awarding damages to Paige, court will consider the terms of the contract. It will investigate the loss
that had happened, as a consequence of the breach of the contract. The court will award damages to
Paige in accordance with the loss occurred as a result of the breach.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 4.6
Now for some fun, complete the following crossword puzzle.
Across
1. An unforeseen event, the fault of neither party which makes it impossible for the contract to be performed.
2. A remedy to put the injured party in the position they would have been in if the contract had been properly
performed.
3. A court order preventing someone from performing a specific act.
4. Where one party leads the other party to reasonably believe that they will not be insisting on strict
performance of the agreed terms.
Down
1. The concept that provides only the parties to the contract can enforce it.
2. A three party agreement whereby the original parties agree to discharge their contract in consideration of a
new contract being entered into between one of the original parties and a third party.
3. When each party properly performs their contractual obligations and the contract is discharged.
4. Attempted performance.
5. A remedy that restores the parties to their pre-contractual position, nullifying the existing contract.
1P
4T E N D E R
I 2
N
5R
3P V O E 4T
E I V C E
1F R U S T R A T I O N
F Y T S D
3I N J U N C T I O N I S E
R O I R
M N O
A N
N
C
2
D
A M A G E S
Unit: FNSTPB503
Assessment Activity 5:
E-Contracts: Principles and Practice (Chapter 6)

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 6 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 5.1
Define the term ‘E-commerce’.
Question 5.2
Are there any exceptions to the type of contracts which can be made electronically?
Explain your answer using examples.
The term E-commerce, also known as Electronic Commerce, implies the buying and selling of goods and
services through the internet and the transfer of money or other consideration to effect such sale or
purchase.
Contracts made electronically are valid if all the elements required in a contract to be valid are present
in it. Section 8 of the ETA recognises all the contracts made electronically to be valid if it complies with
the five elements of a contract.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 5.3
Heidi has been a client for some years, operating a traditional retail business. She has now made the decision
to operate online as well and seeks your advice as to undertaking online transactions. Heidi has the following
questions:
a) When making an offer over a website, to whom is the offer being made?
b) With what legal requirements must Heidi comply?
Question 5.4
What are the requirements of electronic signatures under the ETA?
When an offer will be placed over the internet, it will be made to the world at large. However, the
person making the offer may limit the viewer of that offer to a particular section of the world. However,
once the offer is made to the world at large the person making the offer does not have any control over
the fact that whom he is making the contract with.
The legal requirements that are required to undertake online transactions are, the person making
online transaction must avail the Australian Business Number Digital Certificate from the
Commonwealth Government and to create an electronic signature.s
The requirements of electronic signatures as provided in the ETA are:
1. The signature must be enough to identify the person.
2. It must clearly show the intention of the person relating to the information communicated.
3. It must reliable.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 5.5
Explain the use and significance of Australian Business Number Digital Certificates.
Question 5.6
List three rules under which domain names are allocated.
The Australian Business Number Digital Certificates are assigned to entities undertaking online
transactions. It is made available to the entity by the Commonwealth Government, which remains
linked with the Business Number of the entity. It is a requirement that needs to be complied with to
undertake online transactions.
Rules under which domain names are allocated are:
 The domain name is not owned by a registrant, but the registrant owns a license to use the
domain name.
 There is no hierarchy of rights in the DNS.
 The license period for domain names are fixed at 2 years.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 6 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 6.1
Ginny works for the Poptop Makeup Shop. She signs a contract with Glamour Co. for a shipment of lipsticks to
be stocked at Poptop. Poptop never agreed for Ginny to be their agent, but are thrilled with the deal she
struck, and decide to stock the lipstick in accordance with the contract. Poptop has a change of heart after
closer examination of the stock . They wish to withdraw from the contract and argue the contract is not
enforceable by Glamour Co. because at the time of signing, Ginny was not Poptop’s agent.
Is the contract enforceable? If so, from what point in time?
Question 6.2
Stephen appointed Daniel from Daniel’s Real Estate to sell his property. Because Daniel is too busy, he
subcontracts the sale to Michael’s Real Estate, without Stephen’s permission. Has Daniel done anything
unlawful?
Question 6.3
At the time of the signing of the contract Ginny was not an agent for the Poptop but after the discovery
of the contract Poptop agreed to the contract. This amounts to the ratification of the contract made by
Ginny. Therefore, the contract is enforceable from the time of discovery of the contract by the Poptop
and the further ratification of the same.
A party to a contract might be replaced by a third party in case of novation, keeping the terms of the
contract intact. However, that arrangement needs the consent of all the three parties. But in the
present case, Daniel’s Real Estate was replaced with Michael’s Real Estate without the permission of
Stephen. Therefore, Daniel has committed a breach of contract.
Unit: FNSTPB503Assessment Activity 6:
Contractual Agency (Chapter 7)

Contract and Consumer Law Assignment 1601
Tilly engages Shona as an agent to sell her business to Selva. Is Shona a Party to the contract to sell the
business? Explain.
Question 6.4
Explain how an agency relationship differs from that of an independent contractor.
Shona is not a party to a contact, but he being an agent of Tilly has the power to act on behalf of Tilly
and is supposed to exercise all the rights on behalf of Tilly.
In case of agency, the principal is liable for the acts of the agents done in furthers or under the scope of
his employment. It also includes the tortious acts committed by the agent. However, an independent
contractor is not liable in a similar way.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Question 6.5
Which party (agent, principal or third party) would not be held liable for fraudulent misrepresentations where
the agent acted outside their authority?
Question 6.6
Joe, in his capacity as an agent for Silvio, is authorised to purchase cattle at a limit of $200 each.
Joe could not purchase the cattle at this price so he purchased in his own name, 400 cattle at $300 each.
Subsequently Silvio conferred with Joe and agreed to ratify his act. Neither Joe nor Silvio will pay for the cattle
when delivered. Who is liable?
Both the principal and the agent will be held liable for the acts committed by agents outside the
authority available to them under the contract of agency.
Joe has acted outside the scope of his authority as an agent by buying the cattle for a price beyond the
limit set by Silvio. However, Silvio agreed to the same and ratified Joe’s act. This amounted to
ratification of the contract and this would make Silvio liable to pay for the cattle.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 5 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 7.1
Can omitting to provide information ever count as misleading or deceptive conduct? How would you explain
this concept to a client?
Question 7 .2
A client contacts you having received several complaints about the manner in which they are advertising their
prices. The client operates a bike shop, and they have been advertising bikes for $300. In reality the full price a
consumer has to pay is $330 because of GST. Your client has presumed a customer will simply imply this and
add it to the price.
Are the complaints of the consumers justified? How would you explain this to your client and what advice
would you give them to ensure they operate in compliance with the ACL?
Question 7.3
Omitting to provide information is a misleading and deceptive conduct if the information so concealed
is of material nature.
The complaints of the customers are justified to some extent. The advertising for bikes to be priced at
$300 is not violative of the ACL as the incurrence of GST is an obvious fact. However, the client should
have provided an provision in the advertisement stating the price to be subject to GST.
Unit: FNSTPB503Assessment Activity 7:
Consumer Protection Law ( Chapter 10)

Contract and Consumer Law Assignment 1601
Anthea sold Bob some paper and pens for $65. Anthea did not give Bob a receipt. Has Anthea done anything
unlawful?
Question 7.4
Marc is considering entering into a mobile phone contract with GreedyGuts Phones. He is upset to find out
that within the contract, there is a term stating that if Marc defaults on payment of his monthly statement,
there is a default fee that increases by 10% every day of default. Marc considers this extreme but the
salesperson informs him that this contract is standard form and its terms are non-negotiable.
What argument could Marc make? Do you think he would be successful?
Question 7 .5
Sebastian is going camping in the snow and asks the sales assistant which sleeping bag would be the best for
his requirements. He is advised that the SleepDry bag is the best but in fact he gets wet and cold while
camping. Who would be responsible for his miserable camping trip: Sebastian, the manufacturer or the sales
assistant? Do you need further facts to answer this question fully?
Marc could argue that the terms of the contract is unfair and oppressive, but there is a thin possibility
of his succeeding with the same as standard form of contracts come with a take it or leave policy. So
Marc has an option of either agreeing with the contract or reject it.
Under the Australian Consumer Law, receipts are to be provided to a customer for purchases exceeding
$75. In this present case, Anthea has acted lawfully in providing no receipt to Bob, as the amount of
purchase made by Bob is below the specified limit for issuance of receipts.s
In this case, the sales assistance would be held liable for the misrepresentation committed by him.
However, the manufacture will also be held liable if he has manufactured sleeping bag to be used in the
snow camping.
Unit: FNSTPB503

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 5 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 8.1
Ting and Chrome are separate businesses that manufacture hats. Muhammad invites them both to make
offers to stock his shop. Ting and Chrome get in contact with each other and agree not to sell any of their hats
to Muhammad for less than $40 each.
Have Ting and Chrome done anything illegal? Explain your answer with reference to the CCA.
Question 8.2
Harmony Publishers provide Bookworm Bookshop with a variety of books. The bookshop begins selling
Harmony's books at a discounted price. Harmony contacts the Bookshop and asks them to sell the books at
their recommended retail price. Bookworm refuses. Harmony withholds the supply of books until the
discounting stops, placing the Bookshop in a difficult financial position.
Has the Bookworm Bookshop done anything unlawful? Has Harmony Publishers done anything unlawful?
Question 8.3
Ting and Chrome should charge the same price for hats as they would charge to any other person. They
should not agree to fix a single price.
A retailer can sell the goods at a discounted price and the supplier has no action against the same.
However, if the products are sold at a price below cost then the supplier has an option of withholding
the supply of goods. Here Bookworm Bookshop has sold his books at a discounted price and not below
cost. Therefore, it was unlawful for the Harmony Publishers to withhold the supply.
Unit: FNSTPB503Assessment Activity 8:
Restrictive Trade Practices ( Chapter 11)

Contract and Consumer Law Assignment 1601
Penny provides free-range eggs to Bob's Diner. Penny's husband, Ted, is an excellent plumber but has been
having a hard time finding work. To help her husband, Penny tells Bob she will only continue providing him
eggs if he hires Ted at a fair price for any plumbing needs the diner may have.
Has Penny acted lawfully? Explain your answer.
Question 8.4
Jia Pty Ltd and Katcan Pty Ltd are competitors in the poultry market. They agree to supply fewer organic
chickens to stores for a period of eighteen months to push up prices. Is this lawful? Why or why not?
Question 8.5
Explain what is meant by a cartel.
Penny have made an offer to the Bob’s Diner which they have an option to reject or accept. This is not
unlawful.
It is not lawful because the suppliers are not supposed to collude to escalate the prices ot the detriment
of the consumers.
Cartel is said to have done when the businesses agree on acting together instead of competing against
each other. cartel is illegal under ACCC.
Unit: FNSTPB503
Assessment Activity 9:
Financial Services Consumer Protection (Chapter 12)

Contract and Consumer Law Assignment 1601
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 2 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Question 9.1
Jacob is a stockbroker who, over the course of a year, sold 1.5million shares in a company, ChemTex to people
and other companies that he was affiliated with. He did this so that ChemTex looked like a success and
encouraged others to trade. Has Jacob done anything unlawful?
Question 9.2
Boris seeks personal investment advice from Rory, a financial adviser and AFS licence holder. Boris, a 60 year
old client with an income of $60,000 per year, is considering investing his life savings of $300,000 in a new
technology company. Rory uses accurate data to calculate that the company has a 50% chance of tripling his
money and a 50% of going broke. Rory advise Boris to make the $300,000 investment.
Has Rory fulfilled his obligations as an AFS licensee?
No, Jacob has done nothing unlawful as he has no personal interest in doing the same and he has done
it in good faith.
Rory has not fulfilled his obligations as an AFS licensee as the chances of going broke is 50%. Moreover,
the investor is a 60 year old and a financially vulnerable person.
Unit: FNSTPB503