HA2022 Business Law: Duty of Care, Contract Law, and ACL Analysis

This assignment provides solutions to several business law questions. It covers the concept of duty of care, including when it arises and examples of its existence. It explains how courts determine agreement in the absence of traditional offer and acceptance, referencing relevant Australian cases. The application of the parol evidence rule in Van Den Esschert v Chappell is analyzed. Furthermore, the assignment discusses indemnity in insurance contracts, exceptions to this principle, and the requirement of utmost good faith. Finally, it utilizes the IRAC method to address scenarios involving exemption clauses and potential claims under the Australian Consumer Law (ACL), specifically concerning a defective protein powder.

HA2022
BUSINESS LAW
FINAL ASSESSMENT
TRIMESTER2, 2021
Assessment Weight: 50 total marks
Instructions:
 All questionsmust be answered by using the answer boxes provided in this paper.
 Completed answers must be submitted to Blackboard by the published due date
and time.
Submission instructions are at the end of this paper.
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of
knowledge of the key topics covered in this unit
HA2022Final Assessment T2 2021

Question 1 (7marks)
Part A) When will a duty of care arise and what test is used to determine the existence of duty of
care? (4 marks)
Part B) Provide 3 examples of when a duty of care exists. (3 marks)
(Word limit: Maximum 250 words)
ANSWER: ** Answer box will enlarge as you type
(A) A duty of care arises where one individual or group of people commence any movement
which could rationally harm another person in any manner i.e. physically, mentally as
well as economically. This involves common actions for instance driving in which chances
of physical injury may occur or specialised commotions which includes actions that may
cause economic losses to the individual (Cash, Moyle and O'Dwyer, 2017). According
to the English law, Duty of care to another person is to make sure that no other
individual will suffer any unreasonable harm or loss. If this particular duty is found to be
breached, then the person is accountable and legal liability is forced upon the tortfeasor
to compensate the casualty for the losses that has been incurred. In order to determine
the duty of care, principle test has been used according to which the rule that one has to
love their neighbour becomes in the law that no one has the right to injure their
neighbour.
(B) Three examples are:
(i) Dignified and respectful treatment
(ii) Abuse and neglect free living
(iii) Safe and high quality care as well as services
Question 2 (7 marks)
In cases where the traditional approach of offer and acceptance cannot be applied, how does the
court determine whether an agreement has been reached between the parties? Cite relevant
legal cases from Australian courts.
(Word limit: Maximum 250 words)
ANSWER:
HA2022Final Assessment T2 2021

Consideration is the ultimate price that is being asked by the promisor in exchange of their
assurance to another person which is the amount of a promise. In many authority, consideration
is not an important element of a contract. It is adequate that the parties have reached a
obligatory agreement. Accoding to the common law, the requirement for an agreement is to be
binding among both the parties and promise must provide their consideration for the promise
they have received. The court will determine whether the agreement has been prepared among
both the parties are with mutual obligation which is enforceable by law. The foremost element
that has been required for any agreement is to be enforced by valid offer and acceptance along
with adequate consideration, capacity and legality. The absence of any of these elements will
signify either that there is no agreement or that the agreement is not enforceable by law as a
contract. In most of the jurisdictions, contracts do not necessarily required to be in written
format. Although there are numerous exceptions have been created by statute followed by the
Statute of frauds and designed in order to reduce fraud activities.
For example a case of Nemeth v Bayswater road Pty Ltd [1988] 2 Qd R 406, the parties
contracted which is hire of an aircraft and recorded the details in written document. But later the
plantiff sued for additional charges and was due over an oral agreement and entered into
agreement before the written contract which was executed (Carter, 2018). But the plantiff fails
as the contract was partly written and somewhat oral and the agreement states that all the
terms and conditions are contained in written agreement. This case was inadmissible because
the Plantiff already signed the contract before the oral agreement.
Question 3 (7marks)
How was the parol evidence rule applied in the case of Van Den Esschert v Chappell [1960] WAR
114?
(Word limit: Maximum 250 words)
ANSWER:
The case of Van Den Esschert v Chappell [1960] WAR 114 shows the ways in which one party
aims to unfairly disadvantage the another party. According to this case, the purchaser asked the
seller whether the house was affected by white ants before even signing the contract of
ourchasing the house. The purchaser signed with the seller guarantee and afterwards discovered
white ants and had to pay 60 dollars to destroy ants. She sued the seller for cost of repair. The
sellers verball assurance was a term of contract although there were no issues rekated to white
ants were mentioned in the contract (Golding, 2017). It seems to deny the whole effect of the
payroll evidence rule as the agreement is partially written and partly oral and the court will only
HA2022Final Assessment T2 2021

allow this as an exception because the matter is clear to both the parties. In this case the sellers
verbal assurance was a term of contract and the seller is liable or accountable for the promise
that has been made while selling the house. This case was permissible because of the timing of
the contract.
Question 4 (7 marks)
Part A) What is the aim of indemnity in insurance contracts and what are some exceptions to the
principle of indemnity in insurance? (4 marks)
Part B) Why are insurance contracts of the ‘utmost good faith’? (3 marks)
(Word limit: Maximum 250 words)
ANSWER:
(A) Indemnity insurance refers to the insurance policy that recompense an insured person
for unexpected losses up to acertain limit. Their major aim is to provide protection to the
professionals as well as business owners when they are found to be guilty for any
specific event for instance any kind of malpractice or misjudgement of anything (Timu
and et.al., 2018). However, there are certain exceptions as well regarding the principles
of indemnity in insurance such as life insurance, personal accident insurance,
replacement cost coverage and valued policies or first loss insurance.
(B) The insurance contracts are the doctrine of utmost good faith which requires the
complete and accurate revelation of applicable information. In context pof applying it
into insurance company, this illustrates providing premium information and reporting
boundaries.
Question 5 (11 marks)
Sandy borrowed out an electric scooter from Jim’s Scooters, a self-serviced operation, for the first
time. The scooters can be found at various stations around town and are locked in charging
stations whilst they are not in use. There was a sign on a pillar next to the scooters that listed the
various charges and conditions. It also stated that users needed to download their app to use a
scooter and included a QR code for quick reference. Once she found a scooter she wanted to use,
Sandy was issued with a ticket through the associated app.
Sandy was injured later when she returned the scooter into the locking mechanism. Sandy
HA2022Final Assessment T2 2021

claimed damages from Jim’s Scooters. The company attempted to rely on a condition exempting
it from liability. On each ticket, in small print, were the words ‘Issued subject to conditions . . .
displayed at the scooter station’. On the pillar next to the scooters were printed eight conditions,
the second of which exempted Jim’s Scooters from liability for any injury to a customer whilst
parking the scooter.
Required:
Could Jim’s Scooters successfully rely on the exemption clause to protect it from any action by
Sandy?
(Note: The IRAC method may be helpful in answering this question)
(Word limit: Maximum 500 words)
ANSWER:
Issue: In the above case, the issue is that the Sandy got injured while she returned the scooter
into the locking mechanism of Jim’s scooter. Before using the scoter, Sandy did not read all the
necessary instructions that were written on the pillar of the station next to the scooter and
claimed demages of injury to the Jim’s scooter.
Rule: As per the rule, the exemption clause states that it is a part of contractual document that
attempts to either limit or exclude a party’s liability towards other party (Robin, 2021). This
exists when one party attempts to cut down the scope of their contractual duties for a possible
breach of contract.
Application: According to the application of this rule into the above stated situation, the Jim’s
scooter were not liable to pay any amount to Sandy as they are not binded into any lkind of
contract. And it was the mistake of Sandy that she did not read full instructions that were written
over the piller.
Conclusion: The abovce situation concluded that, as per the application of exemption claues the
Jim’s scooter will not be found guilty for the demages of the Sandy and hence not liable to pay
any charges for the losses incurred.
Question 6 (11 marks)
Milton Imports Limited imports and markets a protein powder called ShredX. The protein powder
is wholly manufactured and packaged in China. In order to ‘bulk up’ the purported protein
content, the manufacturer included an ingredient that can cause serious medical problems if
ingested by humans.
HA2022Final Assessment T2 2021

Jane purchased some ShredX from her local gym, Fitness Fanatics. Soon after using it, she
became severely ill. Eventually, Jane’s doctor traced the problem to a form of poisoning by the
protein powder. They are monitoring her as permanent damage may have been caused by this
poisoning.
Required:
Advise Jane if she has any claims under the Australian Consumer Law (‘ACL’) against the
manufacturer Milton Imports?(Note: The IRAC method may be helpful in answering this
question. You must use the principles of Australian Consumer Law (ACL) to answer this question.
Do not answer this question using contract law or tort law as you will not receive any marks.)
(Word limit: Maximum 500 words)
ANSWER:
Issue: In the above mentioned case, it has been identified that the Milton imports Ltd is doing
false practices by mixing the dangerous ingredient in the ShredX protein powder that are liable
to cause serious illness or medical issues to the persons who consumes the powder. Jane is one
of the client who consumes the dangerous mixture protein powder and became ill. Fortunately,
her doctor recognised the poisonous ingredient that has been consumed by her.
Rule: According to the principles of the Australian Consumer Law, it has been stated that the
consumers has an appropriate right s that are called consumer guarantees which include rights
to repair, replacement or refund as well as getting compensation for damages and losses that are
being done by the item or also being able to cancel the faulty service (Scott, 2018).
Application: As per the situation, the law has been applied over the Milton Imports Ltd. As they
have to discontinue their product for the betterment of the consumers. Apart from this, the
company is liable to pay compensation to Jane for the losses that have been faced by her by
consumption of poisonous protein powder.
Conclusion: The whole situation concluded that the companies have to consider the Australian
Consumer Law while doing their business practices as according to this the government of
Australia introduce certain rules and regulations that needs to be considered by each and every
company. Their major purpose is only to ensure that businesses conduct fair sales practices.It
provides a set of guarantee for the goods the clients purchase and of acceptable quality.
END OF FINAL ASSESSMENT
HA2022Final Assessment T2 2021

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HA2022
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References
Cash, T., Moyle, W. and O'Dwyer, S., 2017. Relationships in consumer‐directed care: An
integrative literature review. Australasian journal on ageing. 36(3). pp.193-204.
Carter, J.W., 2018. Carter’s Breach of Contract:(2nd Hart Edition). Bloomsbury
Publishing.
Golding, G.E., 2017. Terms implied by law into employment contracts: rethinking their
rationale (Doctoral dissertation).
Timu, A.G., and et.al., 2018. Indemnity payouts, learning from others and index insurance
uptake.
Robin, G., 2021. The Senate, The Executive and Henry VIII. AQ: Australian
Quarterly. 92(4). pp.28-35.
Scott, C., 2018. Enforcing consumer protection laws. In Handbook of Research on
International Consumer Law, Second Edition. Edward Elgar Publishing.
HA2022Final Assessment T2 2021