Reference no: EM132408154

FNSTPB503 Apply Legal Principles in Contract and Consumer Law Assignment -

Assessment Activity 1:

Question 1.1 - What is the fundamental difference between an agreement and a legally binding contract?

Question 1.2 - Identify four contracts about which a client may seek advice from a financial services provider.

Question 1.3 - Lucy is a client whose tax and business matters you have dealt with for some time. She has been married for 10 years to Desi but they are currently separated whilst they consider divorce. Desi runs his own separate business. They have entered into various private agreements during the life of the marriage concerning money. Lucy wants to know under what type of circumstances would a private agreement between a husband and wife be considered contractually binding?

Question 1.4 - What is a 'letter of intent' and in what circumstances are such documents likely to be used?

Question 1.5 - In what commercial situation may a client seek a letter of comfort? What three forms may it take? What is a 'letter of comfort'? Name a commercial situation where 'letters of comfort' are commonly used.

Question 1.6 - What are some of the ways an offer and acceptance can be communicated between the parties to a contract?

Question 1.7 - List some of the ways an offer may lapse.

Question 1.8 - Valentine spotted a lovely blackwood bookcase in an antique shop owned by Tristan, which had a price tag of $5,000. Valentine approaches Tristan and tells him she will take the bookcase for $3,000. Tristan says that isn't possible but how about $4,000? Valentine says no, how about $3,500? Tristan says no to which Valentine replies that she will accept Tristan's offer of $4,000. Tristan does not reply but turns to serve another customer Isolde, as Valentine steps away from the counter to take a call on her mobile phone.

Valentine then turns to pay for the bookcase, but Tristan says he has already sold it to Isolde for $5,000. Valentine is furious and says that she and Tristan had a contract and the bookcase was hers. Is Valentine correct? Give reasons for your answer.

Assessment Activity 2:

Question 2.1 - A minor does not have the capacity to enter into a contract which will be enforceable against them, except in exceptional circumstances. Why? What are those exceptional circumstances?

Question 2.2 - If a person who is intoxicated enters into a contract with another person will that contract always be voidable by the intoxicated person when they return to sobriety? Give reasons for your answer.

Question 2.3 - Tom, a client who is a commercial builder, entered into a contract with Roger to undertake construction of an office building. Two months ago, Tom paid Roger $15,000 under a clause in their contract which required Tom to pay this sum if Tom's work breached the National Construction Code. Tom has just been informed that the clause of the Code he allegedly breached is invalid because of an inconsistency with environmental protection legislation. Can Tom recover his $15,000? Give reasons for your answer.

Question 2.4 - In what relationship does the presumption of undue influence arise?

Question 2.5 - What is the definition of a guarantor? What is the legal responsibility of a person who agrees to be a guarantor on a loan for someone else?

Question 2.6 - A young couple wishes to take out a sizeable home loan and, at the insistence of the bank, your client, asks the husband's elderly Chinese parents to guarantee the loan. The parents have very limited spoken and written English. Under what circumstances would you advise your client, the bank, that they could successfully rely on this guarantee should the young couple default on their loan?

Question 2.7 - Inspired by the myriad of cooking shows on television, Dawn is interested in investing a sum of money she has recently inherited in a restaurant and therefore seeks the advice of Global Domination Advisors Pty Ltd.

Angel is appointed as her advisor and after some discussion, Angel recommends she invest in 'The Witches Cauldron', assuring Dawn that the restaurant has been very successful and that its future is even brighter - investment monies are now being sought so it can franchise and that an excellent profit within the next year is assured. Dawn takes Angel's advice, but she wants extra funds to invest so she will receive a higher return.

Dawn approaches her neighbour, Tara, whom she has befriended. Tara suffers from a mild mental disability and depression and does not cope well in the wider community, particularly since the death of her mother. Tara relies on Dawn for advice and support. Dawn asks Tara to lend her $20,000 so she can make it into $40,000 for her. Tara asks if this will make Dawn happy, when Dawn says yes, she gives her the money, and Dawn asks her to sign a document to the effect that Tara has loaned the money to Dawn interest free, to be repaid if and when the restaurant venture succeeds to Dawn's satisfaction.

Sadly, after 6 months, The Witches Cauldron is losing money and Dawn has lost most of her investment monies. Dawn discovers that Angel gave his advice relying on financial information which was out of date and incorrect. He also ignored the fact that the restaurant was about to be prosecuted for breach of their license conditions. Dawn is furious. Tara's niece has now also discovered Dawn's behaviour and insists that she repay Tara, claiming that the loan agreement is not valid.

Advise Dawn and Tara if there is any action and against whom they may take it, giving reasons for your answers.

Assessment Activity 3:

Question 3.1 - Why is it important to identify the 'terms' of a contract?

Question 3.2 - Using examples, describe how you would explain to a client the differences between conditions and warranties, and why the differences matter?

Question 3.3 - How would you explain to a client the effect of a signature on a contractual document? Would your explanation be different if one of the parties had not bothered to read the terms of the contract?

Give reasons for your answer.

Question 3.4 - List three contractual transactions which are required by Australian legislation to be recorded in a written document.

Question 3.5 - Michele has undertaken an inventory of the electrical appliances throughout her business and discovers that some require cleaning and repair. Michele takes the appliances to Rolando the repairer, with whom she has not dealt before. Unfortunately, whilst the goods were waiting to be repaired, Rolando's repair shop was burgled and the appliances stolen. Rolando refuses to accept liability for the loss and draws Michele's attention to a small sign on the door leading into a back room of the shop which says "No liability for loss or damage to goods accepted under any circumstances". Rolando points to these same words printed on the back of the receipt Michele was handed when she deposited the appliances for repair.

Is Rolando correct in his refusal? Give reasons for your answer.

Question 3.6 - What is a standard form contract? What is the difference between a commercial standard form contract and a consumer standard form contract? Use examples to explain your answer.

Assessment Activity 4:

Question 4.1 - In what circumstances can a third party ('stranger') to a contract be held liable in the event of a breach? 'subsist' or cone into existence? How is copyright a valuable asset in business?

Question 4.2 - In certain circumstances, rights can be assigned due to operation of law. List three circumstances where such assignment can occur.

Question 4.3 - Sheila entered into a domestic building work contract with Bruce to build her first home for $200,000 in six months. The contract set out that progress claims would be paid when the footings were poured, at completion of walls, at completion of roof cover, second fix carpentry and practical completion. All obligations are met until the progress claim for completion of the walls has been paid, after which Bruce becomes busy with other work and stops working on Sheila's house, despite her protests. When no further work has been completed after a further six months, Sheila takes action for breach of contract against Bruce and hires another builder to complete the work. Sheila wants Bruce to pay back the first two progress claims.

Will she be successful? Give reasons for your answer.

Question 4.4 - What is the purpose of a force majeure clause? Under what circumstances will they apply?

Question 4.5 - Paige is a financial consultant who has entered into a contract to work exclusively for Annie's company for two years. Three months into the contract, Annie informs Paige that her services are no longer required because she wants to take the company in a different direction. Paige intends to sue Annie for damages for breach of contract.

Explain the matters the court will take into account in assessing the measure of damages they will award Paige.

Question 4.6 - Now for some fun, complete the following crossword puzzle (see attached file).

Across

1. An unforeseen event, the fault of neither party which makes it impossible for the contract to be performed.

2. A remedy to put the injured party in the position they would have been in if the contract had been properly performed.

3. A court order preventing someone from performing a specific act.

4. Where one party leads the other party to reasonably believe that they will not be insisting on strict performance of the agreed terms.

Down

1. The concept that provides only the parties to the contract can enforce it.

2. A three party agreement whereby the original parties agree to discharge their contract in consideration of a new contract being entered into between one of the original parties and a third party.

3. When each party properly performs their contractual obligations and the contract is discharged.

4. Attempted performance.

5. A remedy that restores the parties to their pre-contractual position, nullifying the existing contract.

Assessment Activity 5:

Question 5.1 - Define the term 'E-commerce'.

Question 5.2 - Are there any exceptions to the type of contracts which can be made electronically? Explain your answer using examples.

Question 5.3 - Heidi has been a client for some years, operating a traditional retail business. She has now made the decision to operate online as well and seeks your advice as to undertaking online transactions. Heidi has the following questions:

a) When making an offer over a website, to whom is the offer being made?

b) With what legal requirements must Heidi comply?

Question 5.4 - What are the requirements of electronic signatures under the ETA?

Question 5.5 - Explain the use and significance of Australian Business Number Digital Certificates.

Question 5.6 - List three rules under which domain names are allocated.

Assessment Activity 6:

Question 6.1 - Ginny works for the Poptop Makeup Shop. She signs a contract with Glamour Co. for a shipment of lipsticks to be stocked at Poptop. Poptop never agreed for Ginny to be their agent, but are thrilled with the deal she struck, and decide to stock the lipstick in accordance with the contract. Poptop has a change of heart after closer examination of the stock . They wish to withdraw from the contract and argue the contract is not enforceable by Glamour Co. because at the time of signing, Ginny was not Poptop's agent.

Is the contract enforceable? If so, from what point in time?

Question 6.2 - Stephen appointed Daniel from Daniel's Real Estate to sell his property. Because Daniel is too busy, he subcontracts the sale to Michael's Real Estate, without Stephen's permission. Has Daniel done anything unlawful?

Question 6.3 - Tilly engages Shona as an agent to sell her business to Selva. Is Shona a Party to the contract to sell the business? Explain.

Question 6.4 - Explain how an agency relationship differs from that of an independent contractor.

Question 6.5 - Which party (agent, principal or third party) would not be held liable for fraudulent misrepresentations where the agent acted outside their authority?

Question 6.6 - Joe, in his capacity as an agent for Silvio, is authorised to purchase cattle at a limit of $200 each.

Joe could not purchase the cattle at this price so he purchased in his own name, 400 cattle at $300 each. Subsequently Silvio conferred with Joe and agreed to ratify his act. Neither Joe nor Silvio will pay for the cattle when delivered. Who is liable?

Assessment Activity 7:

Question 7.1 - Can omitting to provide information ever count as misleading or deceptive conduct? How would you explain this concept to a client?

Question 7 .2 - A client contacts you having received several complaints about the manner in which they are advertising their prices. The client operates a bike shop, and they have been advertising bikes for $300. In reality the full price a consumer has to pay is $330 because of GST. Your client has presumed a customer will simply imply this and add it to the price.

Are the complaints of the consumers justified? How would you explain this to your client and what advice would you give them to ensure they operate in compliance with the ACL?

Question 7.3 - Anthea sold Bob some paper and pens for $65. Anthea did not give Bob a receipt. Has Anthea done anything unlawful?

Question 7.4 - Marc is considering entering into a mobile phone contract with GreedyGuts Phones. He is upset to find out that within the contract, there is a term stating that if Marc defaults on payment of his monthly statement, there is a default fee that increases by 10% every day of default. Marc considers this extreme but the salesperson informs him that this contract is standard form and its terms are non-negotiable.

What argument could Marc make? Do you think he would be successful?

Question 7 .5 - Sebastian is going camping in the snow and asks the sales assistant which sleeping bag would be the best for his requirements. He is advised that the SleepDry bag is the best but in fact he gets wet and cold while camping. Who would be responsible for his miserable camping trip: Sebastian, the manufacturer or the sales assistant? Do you need further facts to answer this question fully?

Assessment Activity 8:

Question 8.1 - Ting and Chrome are separate businesses that manufacture hats. Muhammad invites them both to make offers to stock his shop. Ting and Chrome get in contact with each other and agree not to sell any of their hats to Muhammad for less than $40 each.

Have Ting and Chrome done anything illegal? Explain your answer with reference to the CCA.

Question 8.2 - Harmony Publishers provide Bookworm Bookshop with a variety of books. The bookshop begins selling Harmony's books at a discounted price. Harmony contacts the Bookshop and asks them to sell the books at their recommended retail price. Bookworm refuses. Harmony withholds the supply of books until the discounting stops, placing the Bookshop in a difficult financial position.

Has the Bookworm Bookshop done anything unlawful? Has Harmony Publishers done anything unlawful?

Question 8.3 - Penny provides free-range eggs to Bob's Diner. Penny's husband, Ted, is an excellent plumber but has been having a hard time finding work. To help her husband, Penny tells Bob she will only continue providing him eggs if he hires Ted at a fair price for any plumbing needs the diner may have.

Has Penny acted lawfully? Explain your answer.

Question 8.4 - Jia Pty Ltd and Katcan Pty Ltd are competitors in the poultry market. They agree to supply fewer organic chickens to stores for a period of eighteen months to push up prices. Is this lawful? Why or why not?

Question 8.5 - Explain what is meant by a cartel.

Assessment Activity 9:

Question 9.1 - Jacob is a stockbroker who, over the course of a year, sold 1.5million shares in a company, ChemTex to people and other companies that he was affiliated with. He did this so that ChemTex looked like a success and encouraged others to trade. Has Jacob done anything unlawful?

Question 9.2 - Boris seeks personal investment advice from Rory, a financial adviser and AFS licence holder. Boris, a 60 year old client with an income of $60,000 per year, is considering investing his life savings of $300,000 in a new technology company. Rory uses accurate data to calculate that the company has a 50% chance of tripling his money and a 50% of going broke. Rory advise Boris to make the $300,000 investment.

Has Rory fulfilled his obligations as an AFS licensee?

FNSTPB504 Apply Legal Principles in Corporations and Trust Law Assignment -

Assessment Activity 1:

Question 1.1 - Explain the elements necessary for negligence to be established.

Question 1.2 - Jayne is an accountant and business adviser. Christopher and Fleur run a highly profitable business and sought advice from Jayne as to the best business structure and practices to legally minimise their rising tax obligations. Jayne did so and advised Christopher and Fleur to set up a particular kind of trust.

Two years later, following a change in government, the tax laws concerning trusts were changed significantly. Christopher and Fleur are now obligated to pay 25% more tax than they would have been under a company structure. They are angry and believe Jayne has acted negligently. If they were to sue Jayne for negligence, would they be successful? Why or why not?

Question 1.3 - What risk management practices should a tax practitioner/adviser or accountant adopt to minimise the likelihood of negligence occurring?

Question 1.4 - Give an example of pure economic loss, stating the name of a relevant case.

Assessment Activity 2:

Question 2.1 - What kind of matters should be considered when deciding upon an appropriate business structure?

Question 2.2 - Steven and Lamont have recently set up an accounting practice in partnership. They have prepared a written partnership agreement in which it states that any purchase over $1,000 shall only be made after both partners agree. Steven and Lamont purchased all their office furniture and equipment from Mack at OfficeStuff. Mack contacted Steven and offered the partnership a great deal on a computer package for $2,000. Lamont is out seeing clients and cannot be contacted. Steven goes ahead and purchases the computer package. When Lamont is informed he says the purchase is not valid and wants Mack to take the computer package back and refund their money. Mack refuses. Discuss the issues raised and the likely outcome of these circumstances.

Question 2.3 - Under what circumstances may company directors be held responsible for the debts incurred by the company?

Question 2.4 - What are the essential elements of a trust?

Assessment Activity 3:

Question 3.1 - What is the significance of the cases of Saloman v Saloman (1897) AC 22 and Lee v Lee's Air Farming Ltd (1961) AC 12?

Question 3.2 - What is the principle on which a company limited by shares is formed?

Question 3.3 - Ruprecht and Lawrence are partners in Trident Holdings, a business which manufactures synthetic cork products. The business is growing and Ruprecht and Lawrence are keen to obtain further capital, export their products and also reward ten loyal long-term employees who have been with them since they started the business. They decide to change their business structure to a proprietary limited company and request your advice as to the following matters:

(a) What is the purpose of the Small Business Guide produced by ASIC?

(b) In what way can a proprietary limited company structure be used to reward employees?

(c) What is the maximum number of shareholders allowed for a proprietary limited company?  

(d) Can the business continue to be called Trident Holdings? If not, what changes must be made?           

(e) What is the difference between a small proprietary company and a large proprietary company?

(f) How may Ruprecht and Lawrence use the structure of the proprietary limited company to raise capital to grow the business?

(g) Why is a company structure beneficial for a business involved in export?

Question 3.4 - What rules govern the internal management of a company? Can these rules be varied? If so, how?

Question 3.5 - What information must appear on every public document signed or published on behalf of the company? On what other documents must this information appear?

Question 3.6 - Ruprecht and Lawrence have now filed a positive solvency resolution with ASIC. Why would they have done so? Under what circumstances are they required to file a negative solvency resolution?

Question 3.7 - What is the significance of s601AD(1) of the Corporations Act 2001?

Question 3.8 - What is the relationship which exists between a promoter and the company being formed?

Question 3.9 - Prior to incorporation, Claire entered into a contract with Phil to provide computers to a soon to be incorporated company, Modern Family Services Pty Ltd. Upon incorporation the directors of the company refused to ratify the contract made by Claire as they can obtain the same services less expensively from another business. Phil has spent time, expertise and money preparing to perform the contract.

Advise all parties of the issues raised and the likely outcome.

Assessment Activity 4:

Question 4.1 - Outline the responsibilities and functions of the board of directors.

Question 4.2 - How does a person become a member of a company?    

Question 4.3 - To what level of remuneration are directors entitled? Who has the power to decide on the remuneration of directors?

Question 4.4 - Please read the Case study on 'Court decisions lift director standards: ASIC'. The case study can be located in the section titled 'Chapter 5 Review Questions'.

Please answer the following questions in relation to the Case study:

a) What is the prime objective held by ASIC in relation to recent court rulings?

b) List the recent penalties ASIC has secured.

c) Do you believe ASIC plays an effective role as a corporate regulator? Why/Why not?

Assessment Activity 5:

Question 5.1 - Do the directors owe the creditors of the company any fiduciary duties? Why or why not?

Question 5.2 - Dirk is a member of the board of directors of Seriousbucks Ltd. Just prior to his first board meeting, Dirk agreed with the Chairman of the board that he would always vote in line with the Chairman's instructions, and he has done just that throughout his term as a director. Dirk prides himself on being a 'team player'. Discuss the issues raised by these circumstances.

Question 5.3 - Nim is a director of Avarice Ltd, a successful multimedia and marketing company. Avarice Ltd is keen to grow its business and wants to take over another successful marketing business, Marketers Rule Ltd. This is discussed at a board meeting and it is decided to attempt the takeover in three months. As it happens, Nim's sister Ann is an executive director of Marketers Rule Ltd, a fact he does not disclose to the board of Avarice Ltd. Nim informs Ann of the intended takeover and also buys 200,000 shares at $20 a share. Ann also increases her own shareholding, but prior to the takeover, resigns as a director of Marketers Rule Ltd to set up her own marketing business. Ann takes with her a wonderful new software marketing package she has developed while working as a director at Marketers Rule Ltd.

Avarice Ltd proceeds with the takeover, at which point the share price of Marketers Rule Ltd increases to $100 a share. Nim and Ann sell their shares in the takeover and make a large profit. Subsequently, Avarice Ltd and Marketers Rule Ltd discover Nim and Ann's conduct and demand an explanation.

a) Have Nim and Ann acted properly in fulfilling their duties as directors? If not, why not?

b) What are the possible consequences of their conduct?

c) With reasons, explain whether the 'business judgement rule' will be relevant in these circumstances?

Question 5.4 - What is ASIC's role when criminal proceedings are brought against a director?

Question 5.5 - What are the possible defences a director accused of breaching s588G of the Corporations Act may raise?

Assessment Activity 6:

Question 6.1 - What is 'equity finance'? What is 'loan finance'? What is the main difference between them?

Question 6.2 - What is share capital? What purpose does the concept of share capital fulfil?

Question 6.3 - List the rights held by shareholders of ordinary shares.

Question 6.4 - Chin Ho has inherited two bundles of shares from her grandmother from two different companies. The first bundle is cumulative preference shares and the second bundle is redeemable preference shares. Explain what this means.

Question 6.5 - What is reserve capital?

Question 6.6 - How is the price for an option calculated?

Question 6.7 - Elizabeth owns 20,000 shares in Tudor Ltd. Elizabeth has received from the directors of the company a renounceable one-for-four rights issue at the discounted price of 5% below market price. Explain what this means and the choices available to her.

Question 6.8 - Why is there a general prohibition to a company purchasing its own shares?

Assessment Activity 7:

Question 7.1 - Under what circumstances would directors appoint an external administrator?

Question 7.2 - Who may be an administrator?

Question 7.3 - List the ways in which property of the company is protected during the administration.

Question 7.4 - Yummy Tummy Pty Ltd (Yummy Tummy) is a 44 year old business which manufactures and retails desserts. Yummy Tummy operates 17 shops throughout Australia which are leased from shopping centres and its products are also sold through gourmet shops and restaurants. Yummy Tummy employs 400 people, owns two large commercial bakeries freehold and two commercial bakeries subject to mortgage with the Global Domination Bank.

Currently, the business is performing poorly. Yummy tummy is 3 months behind in payment to its flour supplier. So far all employee wages and entitlements have been paid, but the directors are worried about the financial position of the company.

What is the risk to the directors of Yummy Tummy if they take no action to address the company's financial problems but instead simply continue to trade?

Question 7.5 - How may creditors or consumers of Yummy Tummy find out if it has gone into external administration?

Question 7.6 - What are the circumstances under which an application may be made for a compulsory winding up?

Assessment Activity 8:

Question 8.1 - What is the difference between an unincorporated and an incorporated association?

Question 8.2 - Briefly summarise the matters that should be addressed in the rules of an incorporated association.

Question 8.3 - Lewis, the chairman of the committee of the Flemington Football Club Inc has also entered into a two year contract with GreatGrounds Gardeners, to maintain the football oval and grounds.

All went well for the first ten months, but despite providing their services, GreatGrounds Gardeners have now not received payment for three months. Who is liable for the debt owed to GreatGrounds Gardeners? Give reasons for your answer.

Would your answer be different if Flemington Football Club Inc was not an incorporated association? If so, how and why?

Question 8.4 - List five advantages of becoming an incorporated association.

Assessment Activity 9:

Question 9.1 - What are the major commercial reasons that people choose to create and operate express trusts?

Question 9.2 - Identify the following types of trusts?

a) The trust document confers on the trustee discretion to select who is in the designated class of potential beneficiaries is to receive any benefit and to decide the amount of any benefit o be paid.

b) The trust creates and grants to each beneficiary proprietary interests in the trust property or the income derived from that property. The trustee has no discretion regarding distribution of income and property.

c) The trust creates and grants to each beneficiary a fixed equitable interest in the capital and income of the trust calculated by reference to the proportion of units each beneficiary holds in relation to the total number of units issued.

Question 9.3 - Peter has been appointed trustee of Nina's testamentary express trust. The trust document states that the trust applies to "...most of my estate, including my shares and two-thirds of my antique collection." It goes on to state that "half of the two-thirds of the antique collection is to be held for the grandchildren that loved me most". Can Peter fulfil the terms of Nina's trust?

Give reasons for your answer.

Question 9.4 - What law governs trustees?

Question 9.5 - Is there any conduct by the beneficiary which may prevent them being granted an equitable remedy for breach of a fiduciary duty by the trustee?

Question 9.6 - What are the only circumstances under which a trustee is not bound to carry out the terms of the trust instrument?

Question 9.7 - Elaine is the trustee of a trading trust and enters into a contract with a service on behalf of the trust. The business of the trading trust is not financially sound and when the service is complete there are insufficient trust funds to pay the debt.

Giving reasons for your answer, explain who will be liable to pay the outstanding debt.

Question 9.8 - How is the existence and continuity of a trust affected by the death of a beneficiary?

Assessment Activity 10:

Question 10.1 - What are the advantages of compulsory employer funded superannuation to Australian workers and the Australian economy? Are there any disadvantages?

Question 10.2 - What do you think are the advantages and disadvantages of being a member in a defined benefit fund?

Why are defined benefit funds becoming increasingly uncommon?

Question 10.3 - What is an eligible rollover fund?

Question 10.4 - Moe, Larry and Curly are licensed trustees of SensationalSuper, a RSE. The fund has not been performing well and the trustees are keen to increase investment return to members. Moe and Larry decide that the best course of action is to invest in higher risk activities where the investment return is greater. Curly points out that higher risk means higher loss if the investment is not successful. Moe and Larry laugh at him saying 'no pain no gain'. The trustees invest 50% of the available funds in a digital animation and movie company, whose first three projects fail. The loss to the fund is massive. It is also revealed that two directors of the movie company are Larry's daughters from his first marriage.

Discuss the issues and possible consequences raised by these circumstances.

Question 10.5 - Crossword puzzle

Test your knowledge: Complete the following crossword puzzle

Across

1. A holding account for lost members or inactive members with low account balances. (Three words of 8, 8 and 7 letters each).

2. Superannuation was part of a__________ pillar reform package to deal with the aging of Australia's population.

3. Who are the trustees in the SMSF? (Two words of 3 and 7 letters each).

Down

1. Age before which superannuation savings cannot be withdrawn if a person has retired.

2. Regulated and low taxed savings scheme designed to encourage tax payers to save for their retirement.

3. Fund into which employer will pay superannuation contribution if employee does not choose their own.

4. A superannuation fund run for profit with no restrictions on members and many investment options.

5. The phase during which superannuation is being saved.

6. The person who holds a RSE licence and is responsible for the management of a RSE.

7. The Review which recommended the introduction of MySuper was the _________ Review.

8. The authority responsible for regulating RSE's is the Australian ____________ Regulation Authority.

9. The phase in which a member is receiving payment from their superannuation savings.

10. In a MySuper product, there may be either a 'singe diversified investment strategy' or a '___________ investment strategy'.

FNSTPB505 Apply Legal Principles in Property Law Assignment -

Assessment Activity 1:

Question 1.1 - What are the two main sources of law in Australia? Which is most powerful? Why?

Question 1.2 - Why is precedent important?

Question 1.3 - Which tier of government, federal, state or local do you think has the greatest influence/effect on businesses in the financial services environment? Why?

Question 1.4 - Using examples, explain what is meant by 'delegated' or 'subordinate legislation'. Why is this type of legislation particularly important in ensuing clients are properly advised about business compliance?

Question 1.5 - Australia's legal system is based on the 'rule of law' central to which is natural justice. How is natural justice incorporated into our court system?

Question 1.6 - Test your knowledge: Complete the following crossword puzzle

Across

1. The lower house of Federal Parliament is the House of........

2. Criminal law is an example of ..........law.

3. The Council of Australian Governments is also known as ........

4. Type of law making power under s90 of the Constitution wherein only the Federal parliament has the power to make law over customs, excise and bounties.

5. Type of law making power under the Constitution wherein only the State parliaments have the power to make legislation regarding certain subjects.

Down

1. The most powerful form of law is...

2. Law of fairness and good conscience.

3. The power to implement and administer laws.4. Parties submit their dispute to an impartial third party who will make a decision for the parties to which they are contractually bound.

5. The foundation of common law is the Doctrine of......

6. Specialised bodies set up by government to hear specific matters.

Assessment Activity 2:

Question 2.1 - Midas owns a property in regional Western Australia and is thrilled to have discovered generous veins of gold and copper in the soil. Do these minerals belong to Midas? Is he free to exploit them as he chooses? Why or why not?

Question 2.2 - What is a fee simple estate?

Question 2.3 - Ophelia has recently started a new business and intends to use the house she has received from her grandfather as security for a loan to inject capital into her business. She seeks your advice. Will she be successful in her loan application? Give reasons for your answer.

Question 2.4 - List four advantages of the Torrens System of Land Title. What are the commercial benefits of this system?

Question 2.5 - Errol and Flynn are beneficiaries of a trust created by their mother's will. Victor is the trustee of the trust. The majority of the trust property is land. Both Errol and Flynn are concerned about Victor's recent behaviour as trustee and are unsure if he is acting in their best interests. What could they do to protect their interest in the trust property? Why?

Question 2.6 - Jesse owns a mixed business commercial property next door to Benji's Pizzeria. As an advertising promotion, Benji has fixed a 60m inflatable pizza on a line at the end of a 90m pole which blows in the wind, both over Benji's Pizzeria and over the car park of Jesse's property. Jesse wants this intrusion stopped. Advise Jesse.

Question 2.7 - Using examples, define a chose in possession.

Assessment Activity 3:

Question 3.1 - What is the difference between holding land as joint tenants and holding land as tenants in common? How would you explain this difference to a client?

Question 3.2 - Shenzi, Timon and Nala are cousins and joint tenants in a property left to them by their grandmother in her will. Shenzi is your client and is in substantial debt. She tells you that she wants to sell the property and use the funds to reduce her debt but Timon and Nala do not agree. Schenzi tells you that she is going to go ahead and sell her share of the property anyway. Can she legally do so? Advise Shenzi of any options she may have.

Question 3.3 - Bella, Rosalie and Alice are clients who have set up a partnership as florists. Their business is thriving, and they no longer wish to rent retail premises, but buy their own. They have found an appropriate shop, and settlement is in one month. They seek your advice as to whether they should co-own as joint tenants or tenants in common. Advise them, giving reasons for your answer.

Question 3.4 - Edward, a client, has recently bought land in Sydney on which he intends to build an office building. His architect has informed him that the placement of the building on the block is limited because of an easement on the land held by Sydney Water. Explain to Edward what that means.

 Question 3.5 - Priya has recently bought a strata title unit in South Australia and her brother Gani, has bought a strata title unit in Victoria. Is there any difference in the boundaries of what they own under the strata title system in the two states?

Question 3.6 - Margaret intends that her property development will maintain its value and character. She wishes to set limits on the design of the residential buildings and the materials to be used, and to have these limits apply well after she has moved on to other projects. What legal process would you recommend she use? Why?

Assessment Activity 4:

Question 4.1 - Kamani has entered into a contract with Piotr, a plumber to install a series of replacement pipes at her cafe. Will this contract be considered a contract for the sale of goods? Give reasons for your answer.

Question 4.2 - Willow owns and operates a shop selling books and gifts, 'All the World's a Page' in Paddington, Sydney. Willow supplies books both as a wholesaler and retailer. On Monday, Dawn attended at the shop and chose and purchased 7 books. Dawn was also interested in purchasing a small display case but the only one available was in pieces in a box and required construction. Willow agreed that if Dawn wished to purchase and pay for the display case immediately, she would construct the display case and Dawn could collect it on Tuesday. Dawn agreed and decided she would also collect the books the next day.

On Monday, Willow also received an order for 22 copies of the book 'Masterchef the Musical', from Buffy, the owner of a book shop in Parramatta. The 22 books were dispatched in Willow's delivery truck with a further 70 'Masterchef the Musical' books to fill two other orders in Parramatta.

Unfortunately, on Monday night, an electrical fault in the shop next door caused a fire which spread to , 'All the World's a Page' and the shop and its contents were destroyed. Dawn arrived to collect the 7 books and the display case on Tuesday morning, but finding them destroyed, demanded the return of her money. Willow refused.

In a further blow, the delivery truck was involved in an accident causing great damage to the books. When Buffy finally received the books she refused to accept them because of their seriously damaged condition, and refused to pay for the order, insisting that it was not her loss to bear.

Willow is your client and seeks your advice as to who must bear the loss of the various goods.

Give reasons for your conclusions.

Question 4.3 - Seth is a client who operates a sporting goods shop, 'Life's a Ball'. Seth has recently visited his regular supplier and purchased what he believed to be 20 full size netball rings to sell to customers in his shop. He attended at his supplier's warehouse and chose the netball rings relying on the description on the boxes in which they were contained and also on the recommendation of the supplier who stated that they were suitable for all adult netball competitions. On unpacking one to put on display Seth discovers that it is a 'junior' size only, a full metre smaller than full size.

The supplier also showed Seth a sample of a new cricket top which was made from a fabric the same colour and weave as the uniforms of the Australian cricket team. Seth believes the tops will sell well and orders 50 in various sizes. When they are delivered to Seth's shop a week later, they are a slightly different colour and a very different weave from the sample.

Seth seeks your advice as to what action he may take. Give reasons for your recommendations.

Question 4.4 - What is the purpose of the national Personal Property securities register? What are its advantages?

Question 4.5 - To what contracts does the Vienna Convention apply?

Question 4.6 - Estelle owns a large concreting business as a sole trader. The business operates ten concreting trucks, each worth approximately $200,000, five of which Estelle holds freehold. Estelle would like to expand the business further but to do so she requires further capital and is reluctant to mortgage her home.

What would you advise her to do?

Assessment Activity 5:

Question 5.1 - When does copyright 'subsist' or come into existence? How is copyright a valuable asset in business?

Question 5.2 - Daya was employed as an IT specialist in a large firm providing accounting and financial services. Daya did not find her job very challenging and so, acting under her own initiative she created a new software program which streamlined the assessment of customer needs, risk profiles and service provision. The program was successfully adopted by the whole firm. It is now six months later and Daya has resigned to set up her own business producing and marketing the software program she has created.

Discuss the issues raised by these circumstances.

Question 5.3 - What principle was illustrated by the case of Meskenas v ACP Publishing Pty Ltd (2006) FMCA 1136?

Question 5.4 - What happens to the invention once a standard patent or an innovation patent has expired?

Question 5.5 - What remedies may be sought by the owner of a trademark that has been infringed?

Question 5.6 - What action would you advise a prudent business client to take to minimise the risk of breach of confidence taking place?

Assessment Activity 6:

Question 6.1 - What are the uniform matters which are set out in the Civil Liability Acts for establishing the required standard of care in a particular situation?

Question 6.2 - What risk management practices would you advise a business client to put in place to minimise the likelihood of negligence occurring in the course of their business activities?

Question 6.3 - What must a defendant establish to successfully rely on the defence of volenti non fit injuria?

Question 6.4 - A client, Dennis, a developer, has recently purchased two vacant blocks of land beside each other in a newly subdivided area. He commences building two townhouses for investment purposes. There is a vacant block beside the blocks he is developing and to make it easier to work on his own sites, equipment and materials are stored on that site. Sometimes it is also used as a car park by his workers. Dennis has now received a letter from the owner of the vacant block threatening legal action against him.

Explain to Dennis the likely nature of the legal action, why he may be liable and the possible consequences.

Question 6.5 - Chantelle is an engineer whose core business is the design and construction of prototype products on a project basis. The business is run from workshop and office premises which Chantelle rents. When a client attends the workshop for a scheduled meeting, poorly stored materials collapse, causing the client serious injury.

Chantelle will be liable for her client's injury because of:

Question 6.6 - What kind of damages did the Civil Liability Acts limit across the jurisdictions?

Question 6.7 - Aladdin wanted to buy a second retail business which included the purchase of the property from which the business operated. Aladdin therefore sought the advice of Jasmine, an accountant and business adviser employed by Jafar Consulting. Jasmine advised Aladdin to take advantage of the public's huge interest in home improvement and purchase the Old Lamp Hardware Shop. Jasmine told Aladdin that the business was very financially successful and had been for 20 years. Jasmine also told Aladdin that the land upon which the business was operating could easily be subdivided so that Aladdin could build and lease out further retail premises. Aladdin, relying on Jasmine's advice, purchased the land and business for $1.8million.

Sadly for Aladdin, after 6 months, the Old Lamp Hardware Shop is losing money. Aladdin has lost the purchase price and has had to mortgage the land to keep trading. An enormous new Bunnings Hardware store opened across the road 2 months after Aladdin had bought the Old Lamp Hardware Store. Aladdin had discovered that this, together with two years of poor financial performance is why the previous owners were selling. Aladdin has also discovered this was common knowledge in the hardware and retail industry and that Jasmine should have known this. Aladdin has also discovered that subdivision of the land is not permitted under current planning laws.

Aladdin contacted Jasmine and demanded a meeting. Jasmine went to meet Aladdin at the Old Lamp Hardware Shop but on entering she slipped over on a scattering of loose nails which had fallen from their display 4 hours earlier. Unfortunately, whilst another person may simply have been bruised, Jasmine has suffered fractures to both ankles and hips and one of her wrists because of a pre-existing bone condition of which Aladdin was unaware. Aladdin does not think he should be held liable for Jasmine's injuries.

In the circumstances, what insurance would have been commercially and legally useful to Aladdin, Jafar Consulting and Jasmine? Give reasons for your answer.

Attachment:- Law Assignment Files.rar