Contract & Consumer Law Assignment

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