Question 3 (15 marks) Richard Wong was the Marketing Manager of Attractive Beauty Company Limited ("ABC"). The business of ABC was in trading and marketing skin care products and machines. Under the employment contract, Richard could buy skin-care products on behalf of ABC if the amount of the contract is below HK$50,000. He was forbidden to purchase any skin care machines unless there was an approval from the Chairman of the board of directors. Recently he had signed two contracts with different suppliers. Last Monday, the sales director of Marcelin Skin, a famous brand selling skin-care products, visited ABC. Richard regularly placed orders with them. The sales director offered Richard a special discount of their new anti-aging skin-care products if the order was over HK$100,000. Richard immediately signed a contract worth HK$120,000 on behalf of ABC with Marcelin Skin. Last Wednesday, he signed a HK$45,000 contract on behalf of ABC with another supplier called Photon Scrubber Limited ("PSL") and bought 10 sets of oxygen skin treatment machines. This had been approved by the Chairman of the board. However, unknown to the board of directors of ABC, PSL was solely owned by Richard. Required: (a) Discuss whether ABC would be bound by the contract signed by Richard with Marcelin Skin. You are required to cite a relevant case to support your answer. (8 marks) (b) Discuss whether Richard would be liable for any profits he made from the contract with PSL. You are required to cite a relevant case to support your answer. (7 marks) [End of Question, Total for Question 3: 15 marks] Question 4 (15 marks) Ada and Betty were partners in AB Production Co. Their main partnership business was to design and film TV advertisement. Ada and Betty had been working together for five years and they maintained an excellent working relationship. Recently, Betty's younger brother, Ricky, had returned to Hong Kong to set up his own firm. The firm also operated TV advertisement business as AB Production Co. did. In order to help his brother, Betty introduced some clients of AB Production Co. to him. She also highly recommended Ricky's favourable terms to the clients and this caused AB Production Co. to lose 20% of their jobs and revenue. Furthermore, Betty had injected capital into Ricky's firm and became a partner of Ricky. Betty never mentioned anything about her brother Ricky to Ada. Required: I Explain whether Betty breached any duty(ies) as a partner of AB Production Co. and discuss the consequences, if any. (15 marks) [End of Question, Total for Question 4: 15 marks) Question 5 (20 marks) Thomas had recently twisted his ankle in a basketball match. While recovering, the doctor advised that he had to wear shoes with tailor-made cushioning or insole to protect his foot. Thomas went to a footwear store Super Shoes to buy a pair of running shoes. On the shoe rack he saw a latest arrival named "Thunder Speed". His favorite basketball player Jack Dickon acted as the brand ambassador for Thunder Speed. Being fascinated by the stylish design of the shoes and Jack being the ambassador, Thomas had soon forgotten about the doctor's reminder. He took out his credit card and placed order for a pair of Thunder Speed shoes immediately. Last Saturday, Thomas had worn Thunder Speed in a running exercise. Unfortunately, the wound of his ankle worsened just after he started to run fast. Thomas was in a severe pain and could hardly walk. He had to bandage up his foot and use a wheelchair for one month. It was later found that Thunder Speed was not recommended for people with an injured ankle. Required: (a) Advise whether Thomas has the rigtit to claim against Super Shoes for breach of the implied term as to fitness for a particular purpose under s16(3) of the Sale of Goods Ordinance (Cap. 26). You are required to cite a relevant case to support your answer. (12 marks) (b) Suppose when Thomas placed the order for Thunder Speed, Super Shoes had made known to Thomas that the shoes were out of stock and the shop promised and was legally bound to deliver the shoes to Thomas within one week. However, the shoes did not arrive within one week due to a delay in shipment. Advise whether Thomas was entitled to cancel the order for the shoes and demand a refund. (3 marks) (c) The Sale of Goods Ordinance is an example of a statute law. Explain the meaning of "statute law" and the advantages of having statute law over common law and equity. (5 marks) [End of Question, Total for Question 5: 20 marks] Question 3 (15 marks) Richard Wong was the Marketing Manager of Attractive Beauty Company Limited ("ABC"). The business of ABC was in trading and marketing skin care products and machines. Under the employment contract, Richard could buy skin-care products on behalf of ABC if the amount of the contract is below HK$50,000. He was forbidden to purchase any skin care machines unless there was an approval from the Chairman of the board of directors. Recently he had signed two contracts with different suppliers. Last Monday, the sales director of Marcelin Skin, a famous brand selling skin-care products, visited ABC. Richard regularly placed orders with them. The sales director offered Richard a special discount of their new anti-aging skin-care products if the order was over HK$100,000. Richard immediately signed a contract worth HK$120,000 on behalf of ABC with Marcelin Skin. Last Wednesday, he signed a HK$45,000 contract on behalf of ABC with another supplier called Photon Scrubber Limited ("PSL") and bought 10 sets of oxygen skin treatment machines. This had been approved by the Chairman of the board. However, unknown to the board of directors of ABC, PSL was solely owned by Richard. Required: (a) Discuss whether ABC would be bound by the contract signed by Richard with Marcelin Skin. You are required to cite a relevant case to support your answer. (8 marks) (b) Discuss whether Richard would be liable for any profits he made from the contract with PSL. You are required to cite a relevant case to support your answer. (7 marks) [End of Question, Total for Question 3: 15 marks] Question 4 (15 marks) Ada and Betty were partners in AB Production Co. Their main partnership business was to design and film TV advertisement. Ada and Betty had been working together for five years and they maintained an excellent working relationship. Recently, Betty's younger brother, Ricky, had returned to Hong Kong to set up his own firm. The firm also operated TV advertisement business as AB Production Co. did. In order to help his brother, Betty introduced some clients of AB Production Co. to him. She also highly recommended Ricky's favourable terms to the clients and this caused AB Production Co. to lose 20% of their jobs and revenue. Furthermore, Betty had injected capital into Ricky's firm and became a partner of Ricky. Betty never mentioned anything about her brother Ricky to Ada. Required: I Explain whether Betty breached any duty(ies) as a partner of AB Production Co. and discuss the consequences, if any. (15 marks) [End of Question, Total for Question 4: 15 marks) Question 5 (20 marks) Thomas had recently twisted his ankle in a basketball match. While recovering, the doctor advised that he had to wear shoes with tailor-made cushioning or insole to protect his foot. Thomas went to a footwear store Super Shoes to buy a pair of running shoes. On the shoe rack he saw a latest arrival named "Thunder Speed". His favorite basketball player Jack Dickon acted as the brand ambassador for Thunder Speed. Being fascinated by the stylish design of the shoes and Jack being the ambassador, Thomas had soon forgotten about the doctor's reminder. He took out his credit card and placed order for a pair of Thunder Speed shoes immediately. Last Saturday, Thomas had worn Thunder Speed in a running exercise. Unfortunately, the wound of his ankle worsened just after he started to run fast. Thomas was in a severe pain and could hardly walk. He had to bandage up his foot and use a wheelchair for one month. It was later found that Thunder Speed was not recommended for people with an injured ankle. Required: (a) Advise whether Thomas has the rigtit to claim against Super Shoes for breach of the implied term as to fitness for a particular purpose under s16(3) of the Sale of Goods Ordinance (Cap. 26). You are required to cite a relevant case to support your answer. (12 marks) (b) Suppose when Thomas placed the order for Thunder Speed, Super Shoes had made known to Thomas that the shoes were out of stock and the shop promised and was legally bound to deliver the shoes to Thomas within one week. However, the shoes did not arrive within one week due to a delay in shipment. Advise whether Thomas was entitled to cancel the order for the shoes and demand a refund. (3 marks) (c) The Sale of Goods Ordinance is an example of a statute law. Explain the meaning of "statute law" and the advantages of having statute law over common law and equity. (5 marks) [End of Question, Total for Question 5: 20 marks]
