1.Carter is a sole trader. His gardening business is not doing well and has recorded very little profit. Unfortunately, he did not install a water fountain correctly and it caused a great deal of damage to his client's garden. His client knows that the profits from the business will not cover the damage and is insisting Carter dig into his personal savings to pay for the damage. Does the client have the right to demand this?

5. Nai-Xun and Dorian want to start a non-profit organisation to raise money for medical research All money raised will go into funding medical research and sustaining the organisation. Further, they want to buy some property in the organisation's name, to build their headquarters. What type of business structure do you recommend?

11. Nick and Michael agree to put on a Golf Tournament They call their business The Mick N Nick Golf Event'. Nick is in charge of the administration and catering arrangements while Michael undertakes duties relating to the golf. Profit/losses are to be shared according to each separate activity. Each puts up their own capital to complete each of their task. The own success with the catering making $4,000 profit and the golf earns $3,000, Answer the following questions.

(a) Is this a partnership or joint venture? (b) How will the profits be shared? (e) Would the profits be shared differently if the catering made a loss? (d) The food suppliers have not been paid and are suing for $5,000. Who should they use? (e) Michael's equipment worth $2,000 is stolen and he asks Nick to contribute half of the lo Would he succeed?

Chapter 9 11. What risk management practices would you advise a client to put in place in their business to minimise the likelihood of negligence occurring? Include in your answer they type of information you would need from the client to ensure your recommendations were relevant and commercially useful.

17. Bao is interested in owning and operating a furniture business and seeks the advice of 'Dependable Business Advisors'. Meng is appointed as her advisor and after some discussion and research Meng recommends Bao purchase 'Fabo Furniture' which already has two successful outlets and is poised for expansion and a very successful future. The purchase price is $800,000 and Bao excitedly proceeds.

Sadly, after 6 months, Fabo Furniture is losing money and Bao has lost the purchase price and more. A new branch of Ikea has opened across the road to one of the shops and that is why the original owners were selling, Bao discovers that this was common knowledge in the furniture business market and that Meng should have known this at the time, and that further, he gave his advice relying on financial information which was incorrect and out of date. Bao is furious.

Advise Bao of any action she may take, against whom she may take it, why she may take it and the consequences of that action.

19. Using examples, explain contributory negligence and how a defendant may use it as a defence

Chapter 10

11. Mark 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% evert 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?

19. Rachel goes to the toy shop, Playstuff, to purchase a toy for her niece's birthday. Rachel explains to the shop assistant that her niece is only five, but that she enjoys artistic activities. The shop assistant recommends a kit to make and paint plaster animals from moulds and reassures Rachel that such a toy is suitable for a five year old. Unhappily when the child attempts to paint the animal figures, she receives chemical burns from the paint, Rachel is horrified and seeks your advice as to what action she may take, against whom and the likely consequences.

21. Which section of the Australian Consumer Law has been breached in the following examples? (a) Goods are supplied which do not match the description of the product. (b) A service is not provided with care and skill. (e) A seller recommends a product which will be able to do the job. In fact it is unable to do so (d) A seller claims the product was made in Australia but it was in fact made in Ireland: (e) A business proposes to pay you a commission for every person you recruit and then they will get a commission for those they recruit.

Chapter 11 11. The Australian Competition Tribunal: (a) Is the first-place parties should go if they have any issue under the CCA. (b) Is a review body available when a party wishes to challenge a decision of the ACCC (c) Is only available to retail businesses (d) Has substantially more powers than the ACCC 15 Debra is a director of the innovative company Eternal Healing Pty Ltd which specialises in the production and promotion of alternative healing remedies. Their latest product line includes a highly popular range of crystals and healing guides called 'Crystal Comfort. The company is recognised as the market leader in this area and has grown rapidly to be a dominant participant in the alternative healing market nationally,

Debra has asked you to prepare a report concerning the following commercial proposals having particular regard to the provisions and policies of the Competition and Consumer Protection Act 2010(Cth)

(a) The main competitor to Eternal Healing Pty Ltd is Healthy Spirit Pty Ltd. Both companies presently obtain their crystals from the same supplier, Crystals R us Pty Ltd. Eternal Healing holds 62% of the market and Healthy Spirit 23%. Eternal Healing wishes to protect and increase their market share and the first proposal is that Eternal Healing approach Crystals R us and inform them that if they wish to keep Eternal Healing's business, they must no longer supply crystals to Healthy Spirit. (b) Eternal Healing have been approached by two sellers in a very successful retail district to stock and sell Crystal Comfort products. Eternal Healing are keen to enter a distribution agreement, but they will only do so if the new sellers agree to sell the products for no less than $40 per item and agree that they will stock the Eternal Healing products exclusively, refusing to sell Healthy Spirit products. (c) Crystal Comfort product is currently distributed by ten main retail outlets, representatives of which have all met at an enlightenment day held by Eternal Healing. The ten representatives decide to lunch together and during that time the various prices at which the Crystal Comfort product is sold in their outlets is discussed. All the representatives are pleased at how well the product is selling and two representatives believe that demand will support a price increase to $50 per item if the product cannot be obtained at a lower price elsewhere. One of the representatives, Marie, is not convinced and leaves the discussion. Two weeks later, nine of the representatives have increased the price of the Crystal Comfort product to $50 per item. Three weeks later, Marie's product and public liability insurance is increased substantially, and she is advised by her accountant to increase the retail price of her stock by 10%, with the result that she too is offering the Crystal Comfort product for sale at $50 per item.

Chapter 12

3. Jacob is a stockbroker who, over the course of a year, sold 1.5 million shares in a company, Chem Tex to people and other companies that he was affiliated with. He did this so that the Chem Tex looked like a success and encouraged others to trade. Has Jacob done anything unlawful? 9. Boris seeks personal investment advice from Rory, a financial advisor 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 of company. Rory uses accurate data to calculate that the company has a 50% chance of tripling his money and a 50% chance of going broke. Rory advises Boris to make the $300,000 investment. Has Rory fulfilled all his obligations as an AFS licensee?