LAW2447 Commercial Laws Assignment Task 3 Questions 2025

LAW2447 INSTRUCTIONS

1. The deadline, referencing guide, marking rubric, and other detailed instructions regarding the Assessment Task 3 can be found on the following Canvas page: RMIT University
2. This assessment contains two questions (Problem Solving Question & Case Note Question). You must complete all of these questions.
3. The recommended length for the Problem Solving Question is 1100 words (+-10%); and the recommended length for the Case Note Question is 700 words (+ -10%). The combined length of two questions is 1800 words (+-10%).
The examiner will stop reading once reaching this word limit. Issues covered in the excessive part(s) will not be counted and will be marked as "missing". You are going to lose credit for these missing issues. Thus, you must write precisely and succinctly to cover all relevant legal issues within the word limit.
4. This is an assessment and you must work independently in completing it. You must not send a correspondence to the lecturers directly or impliedly seeking a sample answer of the assessment question or asking for a review of a draft. Lecturers are not allowed to discuss the assessment questions with students while the assessment is still going on.
5. Please save your assignment as a DOC or DOCX file and submit it to Canvas PDF files are not accepted. Please do not upload a PDF file to Canvas.

PROBLEM SOLVING QUESTION

(30 marks, recommended length: 1000 words)

On 2 May 2019, one day after signing a lease with Phuong Dong Company for Anh Duong Stereo's new office, Mr. Cong, the president of Anh Duong Stereo, called the office manager, Mr. Huy, and said "I've rented a great new office for Anh Duong Stereo. Please go buy some new recording equipment so we can record some CDs".

Mr Huy responded that "I do not think I have to do that. Why don't you ask other employees to go and buy them ?" Mr. Cong said "well, as an office manager and as specified in the employment contract, I believe you should be responsible for this issue". Nevertheless, Mr Cong continued and told Mr. Huy that "if you go and buy the equipment, I will pay you additional $500 this month".

The next morning, 3 May 2019, Mr. Huy went to a music equipment store called Tien Dat Equipment and told the salesperson that Anh Duong Stereo needed to buy nine microphones, two turntables, and a set of speakers. The salesperson showed Mr. Huy the samples of the equipment that Anh Duong Stereo needed and said that Tien Dat Equipment could deliver all of the equipment to Anh Duong Stereo's office anytime that Anh Duong Stereo wanted.

Mr. Huy said "I like the turntables and the speakers, but I'm not sure about the microphones. Can you tell me more about them and especially about how safe they are?" The salesperson replied "Our microphones are manufactured by Sony Vietnam. They are the safest microphones in the world. They are made out of rubber and plastic and will never shock you. Tien Dat Equipment has been selling them for five years and no customer has ever had any problem with them". The salesperson also said that "if you buy the turntables, the speakers, and the microphones from us, we will give you a free 21-inch Sony TV".

The salesperson then showed Mr. Huy the box that the microphones came in. The box said "Sony Mics will never shock you!" The box also had a statement in small prints on the back which said "If you use Sony Mics within three meters of any other electronic devices, you may be shocked and badly injured. The seller and manufacturer are not responsible for injuries and damage that are caused in this manner".
Mr. Huy was very interested in buying the equipment from Tien Dat Equipment. However, he did not sign the contract straight away. He told the salesperson that he needed some more time to think and would come back after five days to sign the contract.

RMIT Classification: Trusted

When Mr. Huy left the office, the salesperson suddenly realized that he forgot to inform Mr. Huy some of the company's policies. Therefore, he immediately emailed Mr. Huy and stated in the email that "the seller will not be responsible for any damage or whatsoever caused by the equipment under both common law and statutory law". Mr. Huy's computer was affected by a virus and thus he did not check his emails.
Five days after his first visit, Mr. Huy went back to the store to sign the contract. As an alcoholic person, he dropped by a supermarket and bought 10 bottles of beer. He finished all of these bottles while driving to Tien Dat Equipment's store. When Mr. Huy got to the store, he could not park his car properly and the salesperson had to drive the car into the car park for him. The salesperson kept asking "Are you alright?" but Mr. Huy did not respond.

Mr. Huy then went to the office and signed a basic contract to buy the equipment from Tien Dat Equipment. The contract was prepared by Tien Dat Equipment and it mentioned the total price ($40,001), parties' names, and the fees for delivery and installation. The last footnote in the contract (i.e. footnote number 5) contained a statement which read as follows: "the seller will not be responsible for any damage or injuries caused by a misuse of the equipment". Mr. Huy signed the contract without reading any footnotes; and thus, he was not aware of the statement.

Later that day, when Tien Dat Equipment delivered and installed the equipment at Anh Duong Stereo's new office, Mr. Huy noticed that the equipment was not the same as the equipment he had seen at the Tien Dat Equipment store. Mr. Huy took a small electronic recording device called a Dictaphone that he only used for business purposes out of his coat pocket and recorded the following message: "Remember to call the salesperson at Tien Dat Equipment and tell him that these microphones are a different model, these turntables are a different size, and these speakers are a different color".

Mr. Huy put the Dictaphone back into his coat pocket and picked up one of the new microphones to see how it sounded. When he did so he received a serious electric shock. The shock caused Mr. Huy to pass out. He was taken to the hospital where he stayed for three days. His medical bills at the hospital were $6,000. The electric shock also destroyed his Dictaphone, for which he had paid $400.

It tuned out that Tien Dat Equipment's microphones were not made by Sony Vietnam but by a Malaysian company, namely, Techtronic Industries. The microphones were also made out of metal rather than rubber and plastic.

Mr. Huy wanted to return the microphones and required the store to compensate him for his loss, but the store denied its liability.

Mr. Cong also refused to pay Mr. Huy the additional $500.

The written agreement between Anh Duong Stereo and Phuong Dong Company stipulated that the length of the contract was one year. The rent was $1000 a month. However, it was agreed in the contract that Anh Duong Stereo did not have to pay that amount of rental money because Anh Duong Stereo had provided sounding equipment to Phuong Dong Company in five marketing events in January and February 2019 for which Phuong Dong Company had not paid the service fees yet.

Phuong Dong Company wanted to get the office back (just after one month from the time Anh Duong Stereo moved in). Anh Duong Stereo refused to do so and argued that there was a binding contract between two companies.

REQUIRED:

Discuss all relevant issues in relation to who can reasonably sue whom for what under Common Law (not under the Australian Consumer Law), who can prevail, and why?
Do not discuss tort law.
Do not discuss the Australian Consumer Law.

CASE NOTE QUESTION

(20 marks, recommended length: 700 words, +- 10%)
Some commentators criticize that the case (judgment) below was wrongly decided. Others disagree and think that it was convincingly decided. Please give your own opinion about the case (whether it was convincingly decided by the judge or not).

In discussing the case, please follow the requirements and instructions set out in the Case Note Guide & Case Note Marking Rubric which can be found on Canvas

REASONS

1 The applicants are executors of their deceased brother's estate. As executors they arranged for the sale of their brother's home in Hotham Street, Seddon in 2019. The respondent was engaged to market and sell the property. The applicants seek to recover $41,250 being a bonus commission retained by the respondent.

2. The property sold at auction on 6 April 2019 for $1,925,000. The reserve price was $1,800,000. Mr Peter Gindy, an employee of the respondent was the estate agent dealing with the applicants on behalf of the respondent. A bonus commission of 30% was retained by the respondent on the amount over the reserve price as provided for in the Exclusive Sale Authority (ESA). The applicants say that, notwithstanding the provisions in the ESA, the bonus commission should only have been charged on a sale price over $2.3 million.

3. At the start of the hearing the applicants applied to amend the claim to include a claim for unconscionable conduct under section 20 of the Australian Consumer Law (ACL). The amendment was not opposed provided proper particulars of the unconscionable conduct were provided. The amendment was allowed.

4. The applicants' solicitor then confirmed the applicants' case was based on the respondent having:
a engaged in misleading and deceptive conduct in contravention of s 18 of the ACL;
b engaged in unconscionable conduct in contravention of s 20 of the ACL;

Variations to the Exclusive Sales Authority (ESA)

7 The applicants signed the respondent's ESA on 15 February 2019. The ESA was subsequently amended on 25 February 2019, 5 March 2019 and 19 March 2019. Each amendment was initialled by the applicants.
8An extract of the final version of the ESA with its various amendments is set out below.

Section 18 - Misleading and Deceptive Conduct Claim

9. Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive. Consequently, if a person suffers loss or damage because of such conduct, they can recover under s 236 of the ACL the amount of the loss or damage that occurs because of a failure to comply with this requirement.

10. The words "misleading" or "deceptive" are not defined. It is well settled law that these words should be given their plain and natural meaning.

11. The test for determining whether conduct is misleading or deceptive is whether the overall impression of the conduct induces or is capable of inducing error. The task is to examine the relevant course of conduct as a whole in light of the relevant surrounding facts and circumstances.

12. For the applicants to be successful under section 18 of the ACL there must be a representation made by the respondent, the representation must be misleading or deceptive or likely to mislead and deceive, it must be relied upon by the applicants and as a result loss suffered.
Representations

13. The applicants say the following representations made by the respondent were in breach of s 18 of the ACL:

a On 15 February 2019 Mr Gindy, the agent, told the applicants that the property was worth $2.5 million-$3 million (first representation);
b. The applicants were led to believe that the trigger point for the bonus commission was $2.3 million (second representation);
c. The applicants were told by email of the 15 February 2019 that they had control of when the bonus would be triggered and there would be a buffer between the reserve price and where the bonus amount starts (third representation);
d. Mr Gindy was silent on the commission that would apply on $2.3 million then on $1.8 million (fourth representation); and
e.There were different terms for the same thing. When the applicants signed the ESA it was not clear and the agent did not give a professional explanation about the terms of the contract because he changed the language and used interchangeable terms (fifth representation).