AF108: INTRODUCTION TO LAW FOR COMMERCE

WEEK 6: TUTORIAL QUESTIONS

Part A: Capacity to Contract

1. What types of contracts will bind a minor?

2. When will a person of unsound mind be bound by a contract?

3. Vincent is aged 17 and attends High School. His dad is the CEO of a well-known

bank called, Money Bank. Vincent has no other siblings. He has always been

pampered by his dad and gets all his wishes granted (at least all that can be bought by

money). Vincent has an aunt who has her wedding scheduled to take place in a week’s

time. Although Vincent has a wardrobe full of clothes (shirts, trousers, waistcoats,

etc) he decides that he needs to buy a waistcoat for the occasion.

Vincent visits Rite Tailors, who specialise in the sewing of waistcoats. While placing

his order, Vincent notices a flyer on the shop counter. Rite Tailors were offering a

deal under which customers could get ten waistcoats for the price of five. Rite Tailors

normally charged $200 per waistcoat. Vincent places an order for ten waistcoats in

various colours. He pays a deposit of $20 and requests that his order for a red

waistcoat be made ready within four days. Rite Tailors do get the order ready for the

red waistcoat as agreed. Vincent tells them that he will pay them as soon as the

remaining waistcoats are made ready. He also tells them that his dad is the CEO of

Money Bank and they can trust him. Rite Tailors allow Vincent to take the red

waistcoat.

Vincent wears the red waistcoat to his aunt’s wedding. The day after the wedding, he

decides that red is just not his colour so he takes the waistcoat back to Rite Tailors. He

tells them to cancel his order for the remaining waistcoats and that he is returning the

red waistcoat as well. He also demands his deposit back. Rite Tailors are infuriated.

They tell Vincent that he cannot just refuse to go ahead with the deal. Vincent tells

them that he is a minor and the contract is therefore invalid.

Advise both parties as to their rights and liabilities.

Part B: Genuine Consent

For the following situation decide whether there is a contract or not and the position of the

parties, bearing in mind what you have learnt so far from your readings. Consider invitations

to treat, offers, acceptances, consideration and the five grounds that would make a contract

void/voidable i.e. mistake, misrepresentation, duress, undue influence and unconscionability.

1. Mary offers her BMW for sale to Ben. She says: “Ben, I offer you to buy my blue

BMW registration number ‘DW007’ for $100,000. It is a wonderful car and the

latest of its kind. It is only 6 months old.”

Ben takes Mary’s car for a test drive and goes to Tony, a Car Dealer and Tony advises

Ben that the BMW is indeed the latest model and he is getting a great deal. Ben does

not know that Tony is Mary’s cousin who happens to know that Mary really wants to

sell her car. Upon Tony’s advise Ben purchases the car from Mary for $100,000.

After a week when Ben takes the car to Disneyworld Automotives for servicing, he is

asked to buy some parts. At the spare parts shop he realizes that the BMW, which he

has bought is not the latest model, and that there are 3 later versions already in the

market. He then goes back to Disneyworld Automotives with the parts, and discovers

that the car is more than two years old. Ben decides to confront Mary and when he

turns up at Mary’s house, he overhears Tony and Mary’s conversation as to how they

fooled Ben and sold a BMW worth $50,000 for $100,000. Ben decides to sue Mary.

On what ground(s) if any, could Ben sue Mary?

Part C: Torts

1. In order to succeed in an action in negligence, what must a plaintiff establish?

2. Maggie is an experienced baker and owns a cake shop. She buys ingredients from

Best Supplies, a local supplier. To attract customers, Maggie also serves hot

beverages and soft drinks at her cake shop. On Fridays, Jenny and her friends meet at

the cake shop for afternoon tea. One afternoon, Jenny ordered a piece of lemon cake

and hot chocolate while her friends only settled for soft drinks. After eating half of the

piece of cake, Jenny discovered remains of a cockroach in her cake. She suffered

severe shock and gastroenteritis. For two weeks, Jenny could not eat anything

without feeling nauseated. During this time she was also unable to go to work.

Advise Jenny as to whether she would be successful in bringing an action in

negligence against Maggie.

3. Kini, a football lover, frequently attended games at his local ground. On one occasion

the football was kicked into the stand where he was sitting, hitting him on the head

and knocking him out of his seat, causing him to break his arm.

Can Kini sue either the local council or the football club, or both, in negligence for the

broken arm that he received?