Commercial Law 1 2014 Assignment Questions

Part A

A former High Court judge, Justice Lionel Murphy, once wrote that the doctrine of precedent

is eminently suitable for a nation overwhelmingly populated by sheep as the doctrine requires

a judge, whenever they are faced with a decision, to always follow what the last person who

was faced with the same decision did.

Required

What does the doctrine of precedent mean and do you agree with the comments made

by Justice Lionel Murphy?

4 marks

 

Part B

On 1 February 2014 Best Pty Ltd placed the following notice in the ‘National Advertiser’

newspaper:

Special Shoes Special Discounts.

Best Pty Ltd has now received the latest delivery of the latest summer collection of shoes and

sandals from Italy. Styles include the new sling back sandals and wedge heels. Prices start at

$2,000 per hundred pairs (certain styles only); big discounts may be negotiated for bulk

orders. All inquiries to Mr Brown, Sales Manager, on 1200 234 567 or by fax on 08 9100

1011.

 

On 4 February 2014, Lisa, the owner of shoe retailer, Lisa’s Shoes, which had several

regional stores throughout Australia, sent the following fax to Mr Brown at Best.

We refer to your notice in the ‘National Advertiser’ and would like to purchase 2,000 pairs of

the sling back sandals. Our best price is $30,000 including GST and delivery. Please advise.

 

On 6 February 2014 Mr Brown sent the following fax to Lisa:

Best will sell 2,000 pairs of sling back sandals for $30,000 excluding delivery. Payment can

be made by cash or bank cheque and is due on delivery. Please advise.

 

Lisa immediately wrote the following letter to Mr. Brown, which was mailed on 8 February

2014. 

We refer to your fax of 6 February 2014 and are prepared to meet on those terms. Please let

me know the earliest delivery date.

 

On 10 February 2014 Mr. Brown received Lisa’s letter of 8 February 2014 and then

telephoned Lisa. After a short discussion Lisa faxed Mr. Brown a copy of the letter of 8

February 2014. The parties agreed that Lisa’s Shoes would take delivery of the sandals from

Best’s Adelaide warehouse on 3 March 2014.

 

Required

Referring to relevant case law and giving reasons for your answers, does a contract exist

between Best Pty Ltd and Lisa’s Shoes and if so what are the terms of that contract?

5 marks

 

 

 

 

Part C

David had been negotiating with Ian about selling him a valuable antique. On 1 March 2014

David promised to give Ian some time to think about the terms of the agreement.

 

On 10 June 2014 Sam made David a very attractive offer for the antique. Sam was anxious

to close the deal quickly and he insisted on a memorandum of sale being prepared outlining

the terms of the agreement. David agreed.

 

However, David stated that before he signed any agreement for the sale of the antique this

sale was to be made subject to a condition that he first obtain legal advice concerning any

contractual obligations he might have to Ian. This clause was not included in the

memorandum which was signed by both parties. Sam now wishes to finalise the sale and

insists the antique is his.

 

Required

Discuss the likely outcome in this dispute giving reasons.

5 marks

 

 Part D

George and Bec (as a partnership) had a five year written signed lease of a shop in the Sefton

Gate Shopping Centre which is located less than 10 kilometres north of Adelaide. The lease

was entered into at the end of 2010 by way of a signed written agreement with the lessor,

Nogo Pty Ltd, and required a weekly rental payment of $1,500.

 

In 2012, George and Bec’s business was badly affected by a general economic downturn. As

a result, in December of 2012 George and Bec approached the lessor, Nogo Pty Ltd, to ask

for a reduced rental of $1,000 per week until the business improved.

 

George and Bec told Nogo Pty Ltd about the business problems and indicated that they might

have to terminate the lease early. To avoid an early termination of lease, Nogo Pty Ltd

agreed to allow George and Bec to pay the reduced rent until business improved, of the lease

and in January of 2013, George and Bec began to pay the new agreed rent of $1,000 per

week.

 

In December of 2013 Nogo Pty Ltd decided to sell the Sefton Gate Shopping Centre,

including all of the shops. They wanted the income from the shopping centre to look very

healthy and so No Go Pty Ltd asked George and Bec to pay the full amount of rent of $1,500

per week beginning in January 2014. Nogo Pty Ltd also demanded that George and Bec pay

the ‘shortfall’ of $500 per week for the 52 weeks of 2013.

 

Required

You are required to advise both George and Bec and Nogo Pty Ltd as to any possible

legal arguments they may have in connection with this dispute and by providing full

reasons supporting your answer who you think is likely to win the dispute and why.

6 marks

 

 Total marks = 20 marks