Business Law 4th Edition Nickolas James - Solutions

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THE LEGISLATURE What is ‘parliamentary sovereignty’? How did the parliament acquire more political authority than the monarch?
THE LEGISLATURE How does party politics influence the law-making process in Australia? How would you improve the system?
THE LEGISLATURE Explain the role played by each of the Houses in a bicameral parliament. What are the advantages and disadvantages of having a unicameral parliament?
THE EXECUTIVE GOVERNMENT What is ‘executive dictatorship’? Is it an unavoidable consequence of the Westminster system and responsible government?
THE EXECUTIVE GOVERNMENT The proliferation of delegated legislation has been criticised as contributing to the overregulation of business in Australia. Outline the arguments for and against a reduction in the overall quantity of delegated legislation.
THE EXECUTIVE GOVERNMENT Prepare a simple guide to appealing a decision of a government body by referring the matter to the administrative appeals tribunal (or equivalent body) in your State or Territory.
THE EXECUTIVE GOVERNMENT Describe three different circumstances in which you might decide to take advantage of ‘freedom of information’ laws to access specific documents or information.
THE AUSTRALIAN CONSTITUTION A number of websites are devoted to the republic issue. Sites such as that of the Australian Republican Movement (www.republic.org.au) support Australia becoming a republic, and sites such as that of Australians for a Constitutional Monarchy (www.norepublic.com.au)
THE AUSTRALIAN CONSTITUTION Why has political power since Federation generally shifted from the States to the Commonwealth?
THE AUSTRALIAN CONSTITUTION How is power shared by the Federal, State and local governments? If one level of government had to be abolished, which one would you abolish, and why?
LOCAL GOVERNMENT Locate the website for the local government in the area where you live and answer the following questions.(a) When was your local government established?(b) Is your local government called a city council, a shire council, a district council, a borough or some other term?(c) Who is
THE AUSTRALIAN LEGAL SYSTEM What is the Australian Law Reform Commission, and how does the work of the Commission relate to the matters addressed in this chapter?
THE AUSTRALIAN LEGAL SYSTEM According to Justice Brennan in the Mabo case, the High Court was not free ‘to adopt rules that accord with contemporary notions of justice and human rights if their adoption would fracture the skeleton of principle which gives the body of our law its shape and
LAW AND POLITICS Identify at least two arguments in support of, and two arguments opposing, the feminist conception of law referred to in this chapter.
LAW AND ETHICS What is the difference between conducting business legally and conducting business ethically? Do the two necessarily coincide?
LAW AND JUSTICE Locate a news item that describes a legal decision or new law that in your opinion is not just or fair.Upon which conception of ‘justice’ are you relying in your categorisation of the legal decision or new law as unjust?
LAW AND JUSTICE Strict adherence to the rules of court procedure, particularly the rules of evidence, are usually justified by the claim that it is better that a guilty person walk free than that an innocent person be imprisoned unjustly. Do you agree with this claim?
JUSTICE, ETHICS AND POLITICS Download a news item/story from a news site such as www.news.com.au that has some connection with the law and complete the following tasks.(a) Write a brief summary of the item/story.(b) Allocate the item/story to one or more of the categories of law identified in this
THE CATEGORIES OF LAW Institutions administering public international law include the United Nations, the International Court of Justice, the International Labour Organization, the World Trade Organization and the International Monetary Fund. Give a brief description of the role of each of these
THE PURPOSE OF LAW Identify three laws that have attracted media attention this week. For each law, identify what you believe to be the purpose or objective of the law.
THE NATURE OF LAW The definition of law offered in this chapter was described as ‘positivist’. What does this mean? Can you construct a definition of law that acknowledges law’s relationship with justice and morality?
THE NATURE OF LAW It is said that, among other things, law preserves community values. Of course, there are many issues about which there is clear division within the community: questions about abortion, prostitution, drug use, capital punishment, the environment, tax, defence and immigration. The
THE NATURE OF LAW How will knowledge about the law generally, and about business law in particular, help you to succeed in your chosen career?
The business structure that best facilitates the sale of a business is(a) the company.(b) the trust.(c) the sole trader.(d) the partnership.
A partnership is dissolved(a) by one partner giving notice to the other partners.(b) by the bankruptcy of one of the partners.(c) if the purpose of the partnership becomes illegal.(d) all of the above.
During voluntary administration(a) no secured creditor can enforce their charge.(b) no shareholder can sell their shares.(c) no directors can act.(d) none of the above.
When a liquidator distributes the assets of the company, the persons least likely to be paid are(a) the unsecured creditors.(b) the preference shareholders.(c) the employees.(d) the liquidator.
A transaction between a company and an unsecured creditor that results in the creditor receiving more from the company than they would have received if they had to prove for the debt in a winding up is called(a) an insolvent transaction.(b) an unfair preference.(c) an uncommercial transaction.(d)
A company can only be wound up if(a) it is insolvent.(b) it has failed to satisfy a statutory demand.(c) it is a company limited by shares.(d) all of the above.(e) none of the above.
A person can only enter into a Part X personal insolvency agreement if they(a) have committed an act of bankruptcy.(b) have an after-tax income of less than the statutory limit.(c) handed over control of their assets to a controlling trustee.(d) all of the above.
While a person is bankrupt they cannot(a) borrow money.(b) operate a business.(c) leave Australia without the permission of the trustee.(d) direct a company without the permission of the shareholders.
Once they are discharged from bankruptcy, the bankrupt is no longer liable for(a) outstanding income tax liability.(b) HECS-HELP liability.(c) child support payments.(d) all of the above.
If a bankrupt person transferred ownership of property to their spouse to keep the property away from creditors in the event of their bankruptcy, the trustee in bankruptcy can recover the property provided the transaction took place(a) after the person was declared bankrupt.(b) within 6 months
Which of the following is not an act of bankruptcy?(a) Failing to comply with a bankruptcy notice within the time specified in the notice.(b) Refusing to answer the door or respond to phone calls and emails.(c) Having assets seized by a sheriff.(d) Failing to pay an outstanding debt by the due
Once a person has lodged a statement declaring their intention to apply for bankruptcy with AFSA, they can still change their mind provided they do so within(a) 7 days.(b) 30 days.(c) 12 months.(d) 3 years.
A person can only be declared bankrupt involuntarily if they(a) are an individual and not a corporation.(b) owe at least the statutory minimum.(c) have committed an act of bankruptcy.(d) all of the above.
A person appointed to temporarily manage an asset or a business with a view to repaying a creditor’s outstanding debt is(a) a receiver.(b) a liquidator.(c) a trustee.(d) an administrator.
The termination of a worker’s employment will not be unlawful simply because it is because(a) of the employee’s social background.(b) the employee is pregnant.(c) the employee is permanently incapacitated due to sickness or injury.(d) the employee is not a member of a union.
Which of the following is unlikely to amount to unlawful harassment in the workplace?(a) Displaying an offensive screen saver.(b) Asking questions about someone’s sex life.(c) Telling a joke about a particular racial group.(d) Sending a sexually suggestive email.(e) None of the above.
An employee is not entitled to workers compensation if they are injured(a) while on a lunch break.(b) while driving to work.(c) while driving from work to university.(d) while on annual leave.
An employer’s obligations under workplace health and safety laws are owed to(a) employees while they are on the business premises.(b) employees who ordinarily work in premises not controlled by the employer.(c) members of the public while they are visiting the business premises.(d) all of the
An agreement between an individual employer and their employees about the terms and conditions of employment is called(a) An enterprise agreement.(b) An award.(c) A National Employment Standard.(d) An Australian Workplace Agreement.4 Which of the following is not referred to in the National
Which of the following indicate that a cleaner in a factory is an independent contractor rather than an employee?(a) The cleaner is not authorised to delegate their responsibilities to another.(b) The cleaning equipment is provided and maintained by the employer/principal.(c) The cleaner is paid
Which of the following types of employee are least likely to be covered by the Federal industrial relations system?(a) A person employed by a partnership in Western Australia.(b) A person employed by a company in New South Wales.(c) A person employed by the Commonwealth government in the Australian
Which of the following business structures is not obliged to lodge an income tax return?(a) A trust.(b) A company.(c) A partnership.(d) None of the above.
To avoid having amounts withheld from payments made to it by other businesses, a business must have and quote its(a) ABN.(b) ACN.(c) TFN.(d) GST.
If an employee is permitted to reside on the business premises the employer may be obliged to pay(a) GST.(b) capital gains tax.(c) PAYG instalments.(d) fringe benefits tax.
Which of the following is not an allowable business deduction?(a) Mortgage repayments on the business premises.(b) The cost of trading stock.(c) Employee wages.(d) Advertising expenses.
The right of the insurer to exercise the legal rights of the insured in relation to harm caused by a third party is called(a) averaging.(b) subrogation.(c) uberrimae fidei.(d) insurable interest.
An insurer’s refusal to pay an insurance claim cannot be based only upon(a) a failure by the insured to comply with their duty of disclosure.(b) a failure by the insured to lodge the claim within the time period specified in the insurance contract.(c) a misrepresentation by the insured.(d) all of
An insurance policy that provides that in the event of permanent disability the insured will receive a payment in the amount of $10 million is an example of(a) an annuity policy.(b) a contingency policy.(c) an indemnity policy.(d) an endowment policy.
If an insurer fails to inform the insured before the contract is entered into about the consequences of breaching their duty of disclosure, the insurer(a) will be subject to a criminal penalty.(b) will lose the rights they would have had as a result of the non-disclosure.(c) will be unable to
According to the National Credit Code, a mortgagee can repossess mortgaged goods without a court order if(a) the mortgagor is in default.(b) both the mortgagor and the guarantor are in default.(c) the amount outstanding is less than 25 per cent of the loan amount.(d) the credit contract is a
According to the National Credit Code, when do the pre-contractual statement and the written contract have to include the total amount of repayments?(a) Never.(b) Only if the loan is for less than 7 years.(c) Only if the loan is for more than 7 years.(d) Always.
The National Credit Code does not apply to(a) credit cards.(b) pawnbrokers.(c) bank overdrafts.(d) housing loans.
Which of the following is not one of the requirements that must be satisfied before a lender will be a ‘credit provider’ within the meaning of the National Credit Code?(a) The lender must be a bank, building society, credit union, or finance company.(b) The lender must provide credit to
If a charge over a company’s assets is not registered on the PPS Register(a) it is unenforceable against the company.(b) it is unenforceable against the lender.(c) it is unenforceable against a liquidator of the company.(d) all of the above.
A ‘mortgage’ is(a) a written order by one person directed to another person instructing them to pay money to a third party.(b) a type of cheque.(c) a charge over real property.(d) a receipt.
‘Foreclosure’ in relation to a mortgage of Torrens system land refers to the mortgagee’s right to(a) become the owner of the mortgaged property.(b) take possession of the mortgaged property.(c) see the mortgage property.(d) sue the mortgagor for breach of contract.
An order of the court directing an officer of the court such as a sheriff to enforce a judgment by seizing and selling the judgment debtor’s property is called(a) a garnishee order.(b) a sequestration order.(c) a writ of execution.(d) an examination summons.
If a thief uses a bank customer’s credit card, the customer may not be entitled to insist that the transaction be reversed if(a) the customer did not know that their card had been stolen.(b) the vendor did not require the thief to use a PIN.(c) the transaction took place after the customer told
A credit card payment is regulated by the contract between(a) the card issuer and the card holder.(b) the card holder and the vendor.(c) the vendor and the acquiring bank.(d) the acquiring bank and the card issuer.(e) all of the above.
If a cheque is crossed with two parallel lines(a) it is cancelled.(b) it is payable only to the person named as payee on the cheque.(c) it is only payable into an account with a financial institution.(d) it cannot be transferred or endorsed to another person.
If in the same day a person makes two separate deposits of $5000 each in cash into a bank account(a) the transactions do not have to be reported to AUSTRAC.(b) the money is automatically forfeited to AUSTRAC.(c) the person may be found to have committed a criminal offence.(d) the bank is not
A vendor can refuse to accept payment in fifty cent pieces if the total amount payable is more than(a) $5.(b) $10.(c) $50.(d) there is no such limit.
A statutory derivative action is the right of a shareholder to(a) have the company wound up.(b) compel the company to bring legal proceedings against a director.(c) compel a director to bring legal proceedings against the company.(d) bring a legal action against a director.
Shareholders in which type of company must always have the power to appoint the directors?(a) Small proprietary companies.(b) Large proprietary companies.(c) Unlisted public companies.(d) Listed public companies.
Shareholders are unlikely to have the right to(a) vote at general meetings.(b) participate in board meetings.(c) share in the company’s assets upon winding up.(d) receive annual financial reports.
According to the business judgment rule, a director who makes a business decision that results in harm or loss to the company(a) will be in breach of their duty of care to the company.(b) may not be in breach of their duty of care to the company.(c) will be in breach of their duty of good faith to
A director of a company(a) may have express authority to make a contract on behalf of the company.(b) always has implied authority to make a contract on behalf of the company.(c) never has apparent authority to make a contract on behalf of the company.(d) all of the above.
The constitution of the company does not have effect as a contract between(a) the company and each shareholder.(b) the company and each director.(c) the shareholders and each director.(d) the individual shareholders.
Which of the following statements about management of a company is correct?(a) The directors are always answerable to the shareholders.(b) The shareholders are the agents of the directors.(c) Certain decisions are made by shareholders and certain other decisions are made by directors.(d)
If a company does not make a profit(a) dividends can be paid to ordinary shareholders but not to preference shareholders.(b) dividends can be paid to preference shareholders but not to ordinary shareholders.(c) dividends can be paid to both ordinary shareholders and preference shareholders but only
Which of the following types of company cannot be listed on the ASX?(a) A company limited by guarantee.(b) A public company.(c) A limited liability company.(d) A company that did not declare dividends in the previous financial year.
In which of the following types of share offering could a person who is not an existing shareholder apply to purchase shares?(a) A rights issue.(b) A dividend reinvestment plan.(c) A float.(d) A bonus issue.
Which of the following is a characteristic of a preference share in a company?(a) The shareholder is entitled to vote at general meetings.(b) The shareholder has unlimited personal liability.(c) The shareholder has no right to share in any surplus upon winding up of the company.(d) The shareholder
If a charge over a company’s assets is not registered on the PPS Register(a) it is unenforceable against the company.(b) it is unenforceable against the lender.(c) it is unenforceable against a liquidator of the company.(d) all of the above.
Which of the following statements is not correct?(a) A proprietary company must always include the words ‘Proprietary Limited’ or the abbreviation‘Pty Ltd’ after its name.(b) A proprietary company cannot have less than 50 shareholders.(c) A public company is permitted to raise funds from
Members of which of the following forms of organisation enjoy the benefits of limited liability?(a) Companies.(b) Unincorporated associations.(c) Sole traders.(d) General partnerships.(e) All of the above.
Which of the following is the best description of ‘limited liability’?(a) The directors of the company are not personally liable for the debts of the company.(b) The shareholders of the company are not personally liable for the debts of the company.(c) The liability of directors to contribute
Which of the following is the best definition of a ‘public company’?(a) A type of company, not permitted to have more than 50 members or to raise money by conducting a public offer of shares.(b) A type of company, able to raise capital from members of the public but subject to more onerous
Which of the following is the best description of the significance of the decision in Salomon v Salomon & Co Ltd [1897] AC 22?(a) The notion of limited liability should not apply to companies owned and operated by a single person.(b) The concept of separate legal personality cannot be used by a
Before the franchisee enters into a franchise agreement, a franchisor must give a franchisee(a) a copy of the Franchising Code.(b) a signed copy of the franchise agreement.(c) a statement that releases the franchisor from general liability towards the franchisee.(d) all of the above.(e) none of the
A franchise is(a) a contractual agreement.(b) a business structure.(c) a partnership.(d) an agency.
A trustee does not usually have the power to(a) sell the trust property.(b) improve the trust property.(c) distribute the trust income.(d) delegate their responsibilities to another.
A beneficiary of a trust(a) is the legal owner of the trust property.(b) owes fiduciary obligations to the trustee.(c) cannot also be the trustee.(d) none of the above.
In the absence of agreement to the contrary, a change to the nature of the business carried on by a partnership(a) can be made by a single partner.(b) must be agreed to by a majority of the partners.(c) must be agreed to by all of the partners.(d) is not possible.
If a partner is negligent in the course of carrying on the partnership business, the other partners(a) are not liable for the negligence.(b) are jointly liable for the negligence.(c) are severally liable for the negligence.(d) are jointly and severally liable for the negligence.
A partner does not have implied authority to(a) give a guarantee on behalf of the partnership.(b) hire employees.(c) sell the trading stock.(d) buy trading stock on credit.
Which of the following statements is not correct?(a) Receipt by a person of a share of the profits of the business is not evidence of partnership.(b) Sharing of gross returns does not of itself create a partnership.(c) The advance of money in return for a share of the profits of the business does
A partnership is only formed when(a) the partnership is registered.(b) the partners execute a written partnership agreement.(c) the partners expressly agree to become partners.(d) the statutory definition of partnership is satisfied.
In a partnership(a) each partner is the agent of the other partners.(b) each partner is the principal of the other partners.(c) each partner is both the principal and the agent of the other partners.(d) each partner is neither the principal nor the agent of the other partners.
A sole trader must comply with(a) the terms of the sole trader legislation.(b) the terms of the sole trader agreement.(c) the conditions of registration as a sole trader.(d) none of the above.
A sole trader(a) has limited liability for the debts of the business.(b) cannot have any employees.(c) must be registered as a sole trader with ASIC.(d) owns the assets of the business directly.
A ‘cybersquatter’ is:(a) A computer hacker who engages in web address and domain name harvesting.(b) A scammer who downloads malicious software onto personal computers via email services.(c) A scammer who monitors sites with high traffic for the purpose of stealing personal information by means
In which State or Territory are retail trading hours least restricted?(a) South Australia.(b) Queensland.(c) Victoria.(d) Western Australia.
Most commercial leases contain:(a) An option to renew.(b) An option to purchase.(c) An option to sell.(d) An option to merge.
A ratchet clause in a lease is(a) a clause requiring payment of an up-front fee for the privilege of being granted a lease of the premises.(b) a clause providing that the rent can increase but not decrease.(c) a clause requiring payment of a sum of money by a lessee as security for unpaid rent or
Which of the following statements about leases is true?(a) A lease cannot be retrospective.(b) All leases of Torrens system land must be recorded on the registered title.(c) A lease is not a contract.(d) None of the above.
Which of the following is a difference between a lease and a licence?(a) A licence can be of uncertain duration.(b) A licence can be non-exclusive.(c) A licence cannot grant a right to exclusive possession of the property.(d) All of the above.

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Business Law 4th Edition Nickolas James - Solutions

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