Business Law BUS702 Revision Questions and Answers

This document provides comprehensive solutions to a series of Business Law revision questions, covering key concepts such as negligence, contract law, and consumer protection. The answers address scenarios involving negligent construction, the application of the 'postal rule' in contract formation, the enforcement of agreements, and the responsibilities of guarantors. Furthermore, the solutions analyze cases related to misleading or deceptive conduct under the Australian Consumer Law (ACL), the liability of companies for disclaimers, and the duties of sales assistants. The document also explores the powers of ministers regarding consumer goods and product-related services under the ACL, offering a detailed understanding of the legal principles and their practical application in various business contexts. References to relevant legal sources such as the ACL and legal dictionaries are also included.

Business Law

Table of Contents
Answer 1....................................................................................................................................3
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................3
Answer 4....................................................................................................................................4
Answer 5....................................................................................................................................4
Answer 6....................................................................................................................................4
Answer 7....................................................................................................................................5
Answer 8....................................................................................................................................5
Answer 9....................................................................................................................................5
References..................................................................................................................................6

Answer 1.
The defendant cannot deny their negligent actions and they will have to pay damages to
Primrose because the negligent construction evidently harmed various other attendees as
well. They cannot deny their negligence based on reasonable foreseeability because it was
their duty of care and due diligence to make proper arrangements for the attendees (Taggart
& Squire, 2016).
Answer 2.
The ‘Postal Rule’ is a rule of contract law and is considered as an exception to the general
rule because acceptance is only created when communicated to the offeror directly. The
contract is said to be created when the acceptor reply to the mail of offer to the offeror even if
never reaches the offeror and that is why, it is also known as ‘mailbox rule’ (Duhaime.org,
2018). It means that the offer is said to have been accepted when it is posted by the acceptor.
I would advise the client if he or she is an offeror to post or mail their acceptance to the
offeror in order to avoid the operation of the ‘postal rule’ in the process of contract formation.
Being an offeror, he or she should not sell to another without being liable in damages for the
breach of contract.
Answer 3.
As Edward immediately posted the letter of acceptance along with the money order, the
offeror Bella should have wait for the response from him because as the contract formation
existed between them. Edward is correct and postal rule applies in this contract. He should be
entitled to the coin. As Bellahad no right to sell the coin before receiving acceptance from
Edward because she offered both Edward and Jacob but sold the coin to Jacob. Moreover,
postal rule applies in this contract because Edward posted the letter of acceptance even if it

did not reach Bella, the contract was still on. No, the letter of acceptance can either be mailed
or posted by the acceptor of offer (Farlex, Inc, 2018). So, Bella would have in fault whether
letter of acceptance was communicated through mail or post.
Answer 4.
Alice cannot enforce the agreement against Bella because there is no written proof that such
an agreement was made between them. Furthermore, Alice does not have any evidence that
Bella would give her shares in the collection. She cannot claim her share in the collection.
Answer 5.
The client and the bank should only rely on this guarantee if the age of the parents is above
65 years but they are self-funded retirees. Most of the banks in Australia do not consider
guarantors as elderly people. They must have property in Australia if they are residing in
China. They must be financially sound to pay the installments (Dargan Financial
Discretionary Trust , 2017). After considering all these requirements to be fulfilled,
successful reliance on this guarantee would be better.
Answer 6.
Michele cannot take any legal action against the company because she herself did not read
the notice at the bottom of the e-order which was in large capital letters. There was an
important information in the notice that the company would not be liable for any damages
and if the applicant do not agree with the terms and conditions of the e-order, they should not
submit the order and exit the website. The notice was visible enough and it was pure
negligence of Michele that she submitted the order without reading the information. So, her
legal action will not be successful.

Answer 7.
Alan is a sales assistant at the hardware store and it is his duty to sale the hardware to the
customers by informing them about their quality and characteristics, that is what he was
doing with Cara, to whom he considered as a customer. He has not breached the ACL in any
manner because he was selling expensive liquid nails but it was totally the decision of Cara to
purchase whatever she likes. He had not caused any damage to her but just kept his opinion
being a sales person of the store.
Answer 8.
Yes, of course AngolaPlex has breached section 18 of the ACL because they have been found
engaged in misleading or deceptive conduct (ACL, 2018). They misinformed the customers
about the acidic chemical that could react aggressively with sensitive skin. In addition, they
provided false information on the detergent bottle that would misguide the customers and
harm them after they purchase the product. So, it is highly unlawful on the part of
AngolaPlex.
Answer 9.
Under the ACL, the ministers of state and territory have the right to regulate consumer goods
and product related services. They can issue safety warning notices, ban products on
temporary or permanent basis, impose mandatory safety standards or can issue compulsory
recall notice to the suppliers. Section 122 of the ACL provides the right to the responsible
minister to recall the consumer goods compulsorily (AustLII, 2018).

References
ACL. (2018). Misleading or Deceptive Conduct. Retrieved from australiancontractlaw.com:
https://www.australiancontractlaw.com/law/misleading.html
AustLII. (2018). COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2. Retrieved
from austlii.edu.au: http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/
sch2.html
Dargan Financial Discretionary Trust . (2017). Who Can Be A Guarantor? Retrieved from
homeloanexperts.com.au: https://www.homeloanexperts.com.au/guarantor-home-
loans/who-can-be-a-guarantor/
Duhaime.org. (2018). Duhaime's Law Dictionary. Retrieved from duhaime.org:
http://www.duhaime.org/LegalDictionary/P/PostalRule.aspx
Farlex, Inc. (2018). postal acceptance rule. Retrieved from thefreedictionary.com:
https://legal-dictionary.thefreedictionary.com/postal+acceptance+rule
Taggart, J., & Squire, . M. (2016). Contemporary business law workbook. N.S.W Tekniks
Publications Pty Ltd.