LAWS20061 Management Law

Question 1

Tom was a successful businessman in his late 50s who has worked hard all his life to build a well-known financial planning company with over $50 million dollars’ worth of funds under management. However, Tom was still single as he had no time to form any meaningful relationship due to his extremely long working hours.

Longing for a companion to spend time with, Tom turned to online dating and met Susan, an attractive young model in her mid-20s from Eastern Europe. They quickly fell in love and Tom asked Susan to marry him and promised to bring her to Australia, give her a house to live in, a car to drive and keep her safe.

A week before the wedding as Susan’s family and friends started to arrive in Australia for their grand wedding, Tom asked her to sign an agreement which would leave her with just $100,000 in the event of a divorce, or else he was going to cancel the wedding and send her back overseas. Reluctantly, Susan signed the agreement and a happy wedding was able to go ahead which was enjoyed by everyone who attended.

Unfortunately the relationship between them broke down after five years and Tom refused to give any of his fortune to Susan other than the $100,000 they had agreed.

Advise if the agreement signed by Susan was valid.


  The chief legal issue, in this case, is that Tom and Susan are legally married and hence she has a legal right to be given a share of their property or income since they have divorced.  The validity or invalidity of their prenuptial following their divorce is another legal issue.


  The relevant principles to this case include: mutual assent, offer, and acceptance.  The case of Tom and Susan shows the principle of mutual assent in that both the parties agreed to the material terms of the contracts.  This principle implies that both the parties to a contract need to have a clear and comprehensive understanding of the necessary and the involved material terms of the contract (Archana & Fransesca, 2017).  Offer implies that one of the parties to a contract has made an offer which shows his or her manifest interest in creating a contract.


  The prenuptial signed by Susan was based on certain legal elements or principles (Henry, 2005).  She was consciously aware when she signed it before the wedding.  Susan knew very well that she was signing for a $100,000 share in the event they divorced, hence a mutual assent.  As such, she had a clear understanding of what that meant.  In this case, Tom made an offer of $100,000 to Susan, which he would give her in case they divorced.  She accepted it by signing the agreement (Susan, 2008).


 Based on the above discussion, the agreement that Susan signed was hence valid.  This is because she signed it voluntarily and was not created and signed with the intention of divorcing.

Question 2

Steve was in the market for a new car when he came across an advertisement placed on the internet by Jason for the sale of his 2016 two-door sports car.

Steve went to see the car in person on three separate occasions and spent a total of four hours inspecting the car in detail from top to bottom and told Jason that he would have bought the car if only it had a turbo engine, tinted window and leather seats as it was the exact model he had been searching for.

After hearing Steve’s comments, Jason then spent $50,000 installing a turbo engine, tinted window and two new leather seats in his car. However, when Jason called Steve two weeks later about what he had done, Steve told him that he was no longer interested in buying the car.

Advise if Steve was legally bound to buy the car from Jason.


Steve gave Jason the impression that he was going to buy the sports car if it was pimped or refurbished according to his preferences (Laura, 2015).  This was because he visited on three different occasions to see the car besides spending four hours comprehensively inspecting it.  As such, Jason expected Steve to purchase the car once he had completed designing it the way Steve preferred.   


  The applicable legal principles here include the assumption of risk and negligence (Janet & Jonathan, 2016).  The assumption of risk means that either the defendant or the plaintiff was fully aware of the imminent risk when doing that which he or she thought the other had given the impression of agreeing to it.  It implies that he or she assumes the risk knowingly, even though the other party has not given actual consent to it.  It is purely based on an impression.  Negligence is whereby the plaintiff is blamed for a loss or injury (Friedrich, 2007).  The defendant must prove that the plaintiff was at fault or negligent.


When Steve visited Jason to inspect the car, he did it in a detailed manner and said that he would have purchased it if only it was fitted with tinted windows, a turbo engine and leather seats since it was his preferred model.  As such, Jason got the impression that Steve would buy it if he fitted it with all that and incurred $50,000 installing it.  He did it based on the legal principle of assumption of risk.  He assumed the risk.  Additionally, Jason was negligent in that he did not actually consult Steve about whether he would indeed buy the car after he installed it with what he preferred.


 Steve was not legally bound to buy the car, which Jason had installed the tinted window, turbo engine and leather seats.

Question 3

Carl was a keen weekend fishing man and a novel sushi chef whose best friend Harry loved Japanese cuisine and would often get fresh catches from him.

The two of them went fishing together one weekend when Carl caught a giant fugu fish and made sashimi from it. Despite knowing the fish was poisonous and should only be prepared by a skilled chef (which Carl was not!), Harry nevertheless ate the sashimi straight away because he was extremely hungry.

Unfortunately Harry became sick and spent the next two weeks in the hospital after eating the poisonous fish that was not properly cleaned by Carl.

Advise if Carl was negligent and whether any defence was available to him.


  Harry is suffering from food poisoning resulting from eating a sashimi dish (prepared from a fugu fish), which was prepared by Carl (his best friend) despite he (Harry) being adequately aware that his best friend was not well skilled to prepare such a dish.


 The relevant legal law here is that of negligence/tort.  Negligence depicts the omission to carry out something that a reasonable individual guided by those regulations that ordinarily regulate the behavior of human issues would do or do something that a reasonable and prudent person would not have done (James, 2010).  As such, the most paramount elements of this law that are applicable in the case are causation and damages.  Causation implies that the defendant`s inactions or actions caused injuries to the plaintiff, while damages mean that the defendant`s actions caused the plaintiff injuries or harm.


 Harry was negligent in that he took the poorly prepared sashimi, fully aware that Carl was not skilled enough to prepare such a delicacy.  Carl was negligent, too, for going ahead to prepare the delicacy without having the necessary skills.  There are several defences for Carl, namely contributory negligence and voluntary assumption of risk.  In contributory negligence, the plaintiff (Harry) is also at fault for the harm.  This is because he exposed himself to danger and was negligent of the fact that Carl was not qualified to prepare the dish.  In voluntary assumption, the plaintiff (Harry) voluntarily agreed to take the risk with full knowledge of it in that he had real knowledge of the nature and level of risk.


  Yes, Carl was negligent.  However, he has two defences available for him.

Question 4

Betty was a huge Apple fan, so when she learned that the new iPhone 8 was being released in September 2017, she immediately placed an order after seeing on the Apple website that the new phone would come with a high-performance, 12 MP camera, 5x digital zoom and optical imaging stabilisation.

Betty was extremely excited the day the new phone was delivered to her. However her excitement quickly turned into disappointment when she realised the camera on her new phone was only capable of 3x digital zoom and the battery would not last for more than three hours.

Advise if Betty has any rights under ACL.


 The new phone delivered to Betty following her order did not meet her anticipated specifications.  According to her, she legally has the right to get the exact phone that meets her preference as ordered.


  The relevant law is the sale of goods law (Richard & James, 2015).  It includes elements of a contract of sale, goods, seller, and quality of goods, delivery, and plaintiff, among others.  The buyer involves the person who buys items or goods, delivery involves the voluntary transfer of ownership or possession from one individual to another, plaintiff involves the defendant counterclaiming and goods quality implies their condition or state.  Goods sold to buyers should be of reasonable and high quality.


 Betty had ordered for the new iPhone 8 without keen attention to its specifications.  For instance, the high performance and 12 MP camera features were not specifically detailed or described by the manufacturer (Apple).  As such, details of the power storage duration of the battery and 3× digital zoom were part of the general descriptions on the website.  All these are based on above elements of the sale of goods law.


Betty has no any rights under ACL since the specifications on the website were not particular.


Archana, P., & Fransesca, D. (2017). The Family in Law. Cambridge University Press.

Friedrich, S. (2007). Principles of Law, Book 2. WordBridge Publishing.

Henry, F. (2005). To have but not to hold: A history of attitudes to marriage and divorce in Australia. Federation Press.

James, D. (2010). The A to Z of Australia. Rowman & Littlefield.

Janet, S., & Jonathan, H. (2016). The law of contract. Oxford University Press.

Laura, P. (2015). General principles of law. Springer.

Richard, S., & James, D. (2015). The modern law of contract. Routledge.

Susan, G. (2008). Contemplating divorce: A step by step guide to deciding whether to stay or go. New Harbinger Publications.