Academic Honesty

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70211 Contracts Final Exam
Preliminary
Before attempting this exam make sure that you are familiar with the Exam
Instructions provided in Exam Module in Canvas. Make sure that you understand:
• Part 1 Academic Honesty – especially the Academic Honesty Declaration at
[1.3], which you accept by submitting a response to this Final Exam.
• [2.1] Task
• [2.4] Format and exam submission – See [2.4.7] for what counts toward word
limit.
• [3.1] Assessable topics
• [3.2] Authorised authorities
This examination is made available online at 9:30am on Monday 8 November.
Your completed answer file is due at 9:30pm on Monday 8 November and must be
submitted online in the Final Exam assessment in Canvas.
There are three questions. Your answer to each question attempted should
commence on a new page and be appropriately numbered.
The examination is worth 50% of the marks available in this subject. The contribution
each question makes to the total examination mark is indicated in marks.
This examination is an open book examination.
This examination is expected to take approximately 3 hours of working time. You are
advised to allocate your time accordingly. Your answer file may be submitted at any
time before the due time/date. Please allow time to complete the submission
process.
Communication during exam
Students must not post any requests for clarification on the Discussion Boards on
Canvas or Microsoft Teams. Any requests for clarification should be directed by
email to Christopher Croese on [email protected]
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Where clarification is required, it will be broadcast by email to all students in the
exam group.
Chris will be available for one hour after release of the exam, then will regularly
check emails during the day up to 6pm.
Question 1 starts on the following page
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Question 1 (900 words / 20 marks)
Laurie inherited a house from her recently and suddenly deceased mother and father
in the idyllic bourgeois town of Haddonfield, NSW. Laurie did not appreciate the
campy late-1970s interior and wanted to renovate the place. But first, she wanted to
repaint the spare bedroom, which was covered by singularly tacky wallpaper, even
by 1970s standards.
Jason was a painter. He agreed to paint Laurie’s spare bedroom.
The parties agreed that Jason would start the job on 21 October and do the following
tasks:
• Strip the wallpaper.
• Paint a primer undercoat.
• Paint 2 coats on the walls in the colour of antique duck egg blue with
snowstorm white high gloss on the window and door frames, and matt finish
on the ceiling.
Jason said that it would cost $1,500, payable on completion of all work.
Laurie said that it was important that Jason had the painting finished by 31 October
because her friend, Dr Loomis, was arriving on 14 November and she wanted time to
air and furnish the room before he arrived. Jason promised to have the painting
finished by 31 October, which became a term of the contract.
They both shook hands in agreement and entered a contract. Laurie set aside
$1,500 ready to pay Jason on completion of all work.
Jason started work. By 27 October, he had finished the ceiling, windows and door
frame and had stripped the wallpaper and painted the undercoat on the walls.
However, he had run out of antique duck egg blue paint. That day, Jason told Laurie
that he would not be able to finish the painting until 2 November. It would cost Laurie
$400 to pay someone else to complete the final coats.
Answer the following questions.
a) Assume that it is 27 October. Laurie is contemplating immediately terminating
the contract. Does she have the right to do so? You need only consider
whether she has the right to terminate and could elect to do so. You do not
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have to explain what she must do to make her election known. (500 words /
12 marks)
b) Assume that Laurie lawfully terminates the contract. Can Jason sue for
payment in respect of the work done? How much would he receive? You can
assume that the contract is not divisible. (400 words / 8 marks)
Question 2 starts on the following page
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Question 2 (900 words / 20 marks)
The Umbrella Corporation (‘Umbrella’) is a business that provides entertainment at
children’s parties, like clowns, magic shows, face-painting, jumping castles, etc.
According to their website, they offer the ‘gold standard’ in party services across
Sydney.
Jill has a darling child, Chris, who is 8 years old.
In early September 2021, Jill went to Umbrella’s business premises to hire
entertainment for Chris’ 8th birthday party.
Jill spoke to the sales representative at the front desk about what she wanted for
Chris’ birthday party. She made it clear that she wanted the children to be
entertained and enjoy themselves. She asked a lot of questions about what Umbrella
offered and carefully considered the sales representative’s responses.
The sales representative handed Jill a glossy brochure, which Jill quickly perused.
Most of the brochure consisted of photos of happy children being entertained with
information on the services offered. The back of the final page had information in
small text that Jill did not notice. Jill liked the look of the magician and clown and
decided to hire them.
Jill entered a contract with Umbrella for Umbrella to provide a magician and clown for
Chris’ birthday party. She paid a 10% deposit and left. The total price of the service
was $1,000.
Unfortunately, the entertainment was not fit for purpose. The children were not
entertained and did not enjoy themselves. This was a breach of an implied term of
the contract.
Jill returned to the premises of Umbrella. She demanded compensation. The
salesperson apologised profusely but pointed to an A4 sized white sign on the wall
1.5m behind him which said:
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NOTE: UMBRELLA CORP
DOES NOT ACCEPT ANY
LIABILITY FOR ANY
BREACH OF CONTRACT
HOWSOEVER IT
OCCURS.
The sales representative also said that the same term was on the back page of the
glossy brochure Jill read.
Jill had not noticed the sign when she entered the contract.
Answer the following questions:
a) Applying only the common law rules of contract, is the exclusion clause a term
of the contract? You do not have to construe it. (400 words / 8 marks)
b) Assume that the exclusion clause is part of the contract and would be a
successful ‘defence’ to a breach of contract claim. Is there any other way that
Jill could obtain a remedy because the entertainment was not fit for purpose?
If yes, would the exclusion clause be a defence? (500 words / 12 marks)
Question 3 starts on the following page
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Question 3 (550 words / 10 marks)
Jim is a 55-year-old former partner of a suburban law firm. He specialised in property
law. He was one of three managing partners.
In August 2019, Jim was badly injured in a serious car accident. He sustained
serious head injuries and lost the ability to walk unaided. The head injuries affected
his memory, moods, and ability to concentrate. He needed time to think through
complex matters. He was constantly on painkillers, which made him tired, placid, and
detached. The injuries forced him to retire.
Jim lived alone. While he could still live independently, he was assisted by a cook, a
cleaner, and a nurse, all of whom would visit him during the week.
Humphrey is a 35-year-old senior lawyer at Jim’s firm and good friends with Jim. Jim
was a mentor to Humphrey. After Jim’s accident and retirement, Humphrey visited
Jim several times a week and performed household and other tasks for Jim. This
help included assisting Jim with financial and tax matters. Jim had amassed a
significant portfolio of shares and real estate in his lifetime.
In September 2021, Jim expressed frustration with his investments because he
found it increasingly confusing to manage them. Humphrey offered to buy Jim’s
shares in Administrative Affairs Pty Ltd (‘AA’), a private company that provided
services to the government. Humphrey had read that the value of shares in AA were
likely to increase significantly in the near future. Jim said that he would be glad to
convert them into cash that could be deposited in a less risky interest-earning
account. He offered to sell the shares to Humphrey for 30% less than market price
‘to thank you for all your help. I couldn’t have dealt with the accident without you.’
Humphrey was flattered but insisted that Jim first speak to Bernard, a junior lawyer at
the firm whom Humphrey supervised.
Humphrey took Jim to meet with Bernard at the firm. Bernard explained the material
aspects of the proposed transaction to Jim, although he had to repeat himself a
couple of times. At the end of the explanation, Jim appeared happy to continue with
the sale and signed the contract for sale and transfer on the spot. Humphrey then
drove Jim home.
That afternoon, Humphrey transferred the purchase price to Jim’s bank account.
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Could Jim argue that the sale of shares is voidable by raising a presumption of
undue influence? Discuss whether a presumption can be raised and whether it could
be rebutted. (550 words)
END OF EXAM
Post-exam checklist on following page
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Post-exam checklist
• Check that you have not missed any announcements by email during the
exam period.
• Proof-read your response, use spellcheck, etc.
• Have you relied only on approved authorities? See Exam Instructions [3.1]
• Are your authorities and quotes properly cited according to the Australian
Guide to Legal Citation (4th ed)? See Exam Instructions [2.4.6].
• Does the format of your response comply with the formatting requirements in
Exam Instructions [2.4.1] – [2.4.3]?
• Is your file name and format compliant? See Exam Instructions [2.4.1] –
[2.4.2].
• Do your responses comply with the word limits? See Exam Instructions
[2.4.7].
• Submit your response on Canvas. See Exam Instructions [2.4.5].
• Double check your submission – have you submitted the correct document?

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