REVISION PROBLEM ONE

In June 2021, Money World Inc. a financier, lent money to various companies associated with Menthol Wholesale. They accepted Menthol Wholesale's guarantee of payment on the reliance of the audited accounts of Menthol Wholesale. Max Tax is Menthol Wholesale's auditor. In July 2021 Menthol Wholesale went bankrupt, and Money World Inc. lost a considerable amount of money. Money World Inc. claims Max Tax was negligent in carrying out the audit and that Money World Inc.has suffered a loss as a result in relying on the audited accounts prepared by them.

Use only common law and/or equitable principles to answer this question. Do not use legislation.

Can Money World sue Max Tax for negligent misstatement?

REVISION PROBLEM TWO

Milton is a factory owner. He buys a large electric packaging machine from Phillip who works for Xpert Electrical Services. Phillip manages the sale of machines and he is also an electrical contractor.

Milton tells Phillip that he needs a large electric packaging machine because his business is expanding. He needs a machine that is capable of packing 1000 boxes of tissue paper per hour. Phillip recommends a machine and guarantees it will do the job and Milton won't be disappointed with it. After the purchase, Milton also asks Phillip if he will undertake to install the new electric packaging machine that Milton has bought.

Towards the end of negotiation, Phillip confirms that he is qualified and registered to do the job (which is untrue). Phillip says that he will charge Milton $35,000 for the machine and $15,000 for the installation. Phillip prepares a written contract which he presents to Milton to sign. Milton does not bother to read through the entire contract. He and Phillip both sign it.

Phillip and his assistant begin installing the machinery. Towards the end of the day Phillip is tired and finding it difficult to concentrate. He connects an important electrical wire wrongly. When everything has been connected, Phillip asks his assistant to turn on the electricity.

The assistant says, "Shouldn't we check all the connections first?"

Phillip says, "No. That would take a whole day. If there are any problems, we'll soon know."

A week later, Milton finds out that the machine is only capable of packing 500 boxes of tissue paper per hour. Milton also notices that the machine keeps turning itself off. One day, when power is switched on, the wrongly connected wire causes massive sparking and a large fire. The normal checks would have disclosed that a wire was wrongly connected.

Milton' factory is damaged by the fire and costs $30,000 to repair. Furthermore, production in the factory has to be stopped for two weeks while the repairs are made, and Milton loses $10,000 of the trading profits he would otherwise have made.

Use only common law and/or equitable principles to answer questions 1 and 2. Do not use legislation.

1. Can Milton bring an action in negligence against Phillip?

1. Does Phillip make a misrepresentation when he tells Milton that 'he is a qualified and registered electrical contractor'? If Phillip made misrepresentation, what type of misrepresentation was it?

Use only legislation (and relevant cases) to answer questions 3 and 4. Do not use common law and/or equitable principles.

1. Would the sale of the large packaging machine between Milton and Xpert Electrical Services be considered a 'consumer' contract under the Australian Consumer Law?

1. Is Phillip guilty of misleading and deceptive conduct, as prohibited by section 18 of the Australia Consumer Law when he guarantees Milton that the packing machine is capable of packing 1000 boxes of tissue paper per hour?

REVISION PROBLEM THREE

Tyson, a concert promoter, is promoting an Australian production of the musical show Galaxy Star. Simone, a young singer aged 18, attends an audition in Melbourne for the part of Zelda, the lead female role. Even though she is a talented singer, she has never been signed up for any role in any show. Tyson is aware that this is Simone's first show and she is quite anxious about playing the lead female role. Tyson tells Simone: "Ours will be a first-class production. We are in the process of signing George Romans, the famous American singer, for the male lead role. The show will be well advertised and will draw huge audiences."

After the audition, Tyson offers Simone the part of Zelda. Simone asks: "Are you sure that George will take part?"

Tyson replies: "As far as we can tell, he is very interested."

Simone then signs a contract to play the part of Zelda for a 2% share of the ticket sales. The contract contains all the usual terms for a contract of this type but does not mention George Romans. Tyson pays Simone a $5,000 advance on her earnings but with a condition that she stays in the production for two years with no bonuses.

One week later, George Romans informs Tyson that he has decided against taking a part in the Australian show because he has been very unwell, and his specialist has advised him not to work and travel to Australia. Tyson tells his Australian performers that Bruce Slim, a local singer, will now play the male lead and that the production will have to be considerably scaled down. This is bound to have an impact on the success of the show.

Simone is disappointed and tells Tyson that she no longer wants to play the role of Zelda, but Tyson insists that she is contractually bound to perform.

Simone was very upset and on her way home, she stops by electronic shop to spend the $5,000 she has received in advance from Tyson. She buys a large 75" television and the sales assistant tells Simone that she has made the right choice. A week later, the television stops working, and she is furious. When she rings up the shop to complain about the faulty television, the sales assistant reminds her that they are not liable for any goods that have been sold under any circumstances.

Use only common law and/or equitable principles to answer questions 1 to 3. Do not use legislation.

1. If Simone refused to attend rehearsals or do any performances, can Tyson sue Simone to enforce the contract, would a court order Simone to perform the part of Zelda in the show?
2. Can Simone argue that the contract has been frustrated? If so, what would happen?
3. Can Simone argue that the contract is voidable on grounds of unconscionable conduct?

Use only legislation (and any relevant cases) to answer questions 4 to 6. Do not use common law and/or equitable principles.

1. Would Simone be considered a 'consumer' in the sale of the television under the Australian Consumer Law?
2. Has the electronic shop breached any relevant statutory guarantee under the Australian Consumer Law?
3. Would the exclusion clause exclude the electronic shop from liability for breach of any statutory guarantee under the Australian Consumer Law?