Contract Law
Exam Practice Tests
Course Introduction
Contract Law explores the principles and rules governing legally enforceable agreements between parties. The course examines the formation of contracts, including offer, acceptance, consideration, and intention to create legal relations. It also covers the contents and terms of contracts, vitiating factors such as misrepresentation, duress, and undue influence, and issues related to the performance and discharge of contractual obligations. Remedies for breach of contract, such as damages, specific performance, and injunctions, are discussed, alongside applications in real-world contexts. By the end of the course, students will have a solid understanding of contract laws foundational doctrines and practical implications.
Recommended Textbook Business Law 9th Edition by Andy Gibson
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Chapter 1: Legal Foundations
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Q1) The rules of equity:
A) Provide a wider range of remedies than the common law.
B) Complement the common law.
C) Are based upon the concept of fairness.
D) All of the above.
Answer: D
Q2) The reason statute law takes priority over the common law is because:
A) Common law principles come from old English cases.
B) Politicians are more accessible to the electorate.
C) Judges are accountable to the parliament.
D) Politicians are accountable to the electorate.
Answer: D
Q3) Roman law, Canon law and Merchant law are major sources of English law.
A)True
B)False
Answer: False
Q4) Laws made by parliaments are called statute law.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Origins of Australian Law
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Q1) The decision of the High Court in the case <i>Commonwealth v Tasmania</i> (1983) 158 CLR 1, was based upon which head of constitutional power?
A) The reserve power.
B) The external affairs power.
C) The environmental power.
D) The conciliation and arbitration power.
Answer: B
Q2) Which of the following statements supports the philosophy of the doctrine of separation of powers?
A) The power to interpret law is exercised by the Judiciary.
B) One limb of Government should not exercise the functions of another limb.
C) The Legislature and the Executive must remain separate.
D) All of the above.
Answer: D
Q3) When a Commonwealth act clashes with a State act, the State act must be followed. A)True
B)False
Answer: False
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Chapter 3: Legal Systems
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Q1) The civil jurisdiction of a court is determined by the amount of money involved.
A)True
B)False
Answer: True
Q2) A licensing court is an example of alternative dispute resolution.
A)True
B)False
Answer: True
Q3) Which of the following matters fall within the original jurisdiction of the High Court?
A) Disputes between States.
B) Disputes between individuals over land within one State.
C) Disputes relating to the constitutions of individual States.
D) Appeals from State Supreme Courts.
Answer: A
Q4) The High Court only has appellate jurisdiction.
A)True
B)False
Answer: False
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Chapter 4: How Law Is Made: Precedentstatute Law
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Q1) The use of the word: 'means' in legislation indicates that a word has an exact meaning.
A)True
B)False
Q2) What is the term that describes a technique used by the courts to avoid having to comply with an otherwise binding precedent?
A) Upholding.
B) Affirming.
C) Differentiating.
D) Distinguishing.
Q3) Which of the following statements is NOT an advantage of the doctrine of precedent?
A) It is fairer and more equitable to follow precedent than to not follow precedent.
B) The use of precedent promotes consistency in the law.
C) The use of precedent promotes certainty in the law.
D) Precedent may not be relevant to today's circumstances but still has to be followed.
Q4) Explain the doctrine of <i>res judicata.</i>
Q5) List some of the advantages and disadvantages of the doctrine of precedent.
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Chapter 5: Civil Liability: The Law of Torts and Negligence
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Q1) The recent statutory reforms to the law of negligence provide that, in the event of contributory negligence on the part of the plaintiff, the court can reduce the defendant's liability by 100%, thereby defeating the plaintiff's claim. Can you think of a situation where it would be appropriate to relieve a negligent defendant from liability entirely?
Q2) In order to establish contributory negligence the defendant must prove that:
A) The plaintiff was also at fault or negligent.
B) The damage was reasonably foreseeable and was contributed to by the plaintiff's action.
C) The plaintiff's conduct contributed to the damage or loss suffered by the plaintiff.
D) All of the above.
Q3) A defendant will be found to have breached their duty of care if:
A) A reasonable person in the same circumstances would have taken precautions.
B) The risk of injury was foreseeable.
C) The risk of injury was significant.
D) All of the above.
Q4) Much of the law of torts is concerned with accidental injury to the person or property. Do you think that it is appropriate for a person to be made liable for an <i>accidental</i> act?
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Chapter 6: Applications of Negligence to Business
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Q1) Vicarious liability can make a person liable for the wrongful acts of another if certain criteria are satisfied.
A)True
B)False
Q2) What is occupier's liability?
Q3) To establish a case of occupier's liability, a plaintiff must establish that:
A) The hazard was in the nature of a 'trap' and not obvious.
B) The defendant was negligent in not putting some protection in place or giving a warning.
C) The defendant has occupation or control of the land or structure.
D) All of the above.
Q4) In which case did the House of Lords first suggest that a negligent misstatement could give rise to an action for financial loss?
A) Donoghue v Stevenson [1932] AC 562.
B) L Shaddock & Associates v Parramatta City Council (No 1) (1981) 150 CLR 225.
C) Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.
D) Esanda Finance Corporation v Peat Marwick Hungerfords (1997) 71 ALJR 448.
Q5) Do you think it appropriate that volunteers and 'Good Samaritans' be protected from the consequences of their carelessness? Explain your answer.
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Chapter 7: Introduction to Contracts
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Q1) In the context of contract law, which of the following best describes the element of 'consideration'?
A) Something of value passing from one party to another in return for a promise to do something.
B) An offer by one party and an acceptance by the other.
C) The parties must intend that their promises create legally enforceable obligations.
D) All of the above.
Q2) The formation of an e-contract is identical to a conventional contract.
A)True
B)False
Q3) A 'happy hour' offering half price drinks between 6:00 and 7:00 every Friday is an example of a:
A) Bilateral contract.
B) Express contract.
C) Implied contract.
D) Unilateral contract.
Q4) A contract is always an agreement but an agreement is not always a contract.
A)True
B)False
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Chapter 8: Agreement Between the Parties
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Q1) In Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, the advertisement placed by the company was:
A) An offer.
B) A statement of intention.
C) An invitation to treat.
D) None of the above.
Q2) In order to reach a legally enforceable agreement, the parties to an agreement:
A) Need only reach broad agreement on the substance of the contract.
B) Must agree to more than just the substance of the contract.
C) Must expressly agree to every term of the agreement.
D) Cannot leave any details to be worked out later.
Q3) It is important to identify when parties have reached agreement because:
A) A contract comes into existence once agreement is reached.
B) The terms and conditions agreed to create legally enforceable rights.
C) It helps to determine the time and place of the contract.
D) All of the above.
Q4) If an offer and acceptance cannot be identified, there can never be a contract.
A)True
B)False
Q5) What is the purpose of an option?
Page 10
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Chapter 9: Intention to Create Legal Relations
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Q1) A 'rebuttable' presumption is:
A) One which can be disputed with factual evidence.
B) One which cannot be disputed by either party.
C) A presumption based upon the evidence.
D) A reasonable presumption.
Q2) In relation to the question of whether the parties could be objectively seen to intend to create legal relations, the courts take into account a number of factors. What are those factors?
Q3) A volunteer worker may not be covered for workers compensation because:
A) They are not an employee.
B) They are unlikely to work on a regular basis.
C) They are working under a domestic agreement.
D) They only work for non-profit organisations.
Q4) By including the wording 'this agreement is subject to contract' it is clear that the parties do not yet intend to be legally bound to a contract.
A)True
B)False
Q5) What is a letter of comfort?
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Chapter 10: Consideration
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Q1) In which case did the court decide that performance of an existing contractual duty by a group of sailors was not good consideration for the captain's promise to pay extra wages?
A) Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270.
B) Stilk v Myrick [1809] 2 Camp 317.
C) Roscorla v Thomas [1842] 3 QB 234.
D) Hartley v Ponsonby (1871) 119 ER 1471.
Q2) The effect of the rules of consideration is that the law can only be used to enforce bargains, but it cannot be used to enforce promised gifts. Is this distinction between gifts and bargains a fair one?
Q3) Simple contracts must contain a bargain.
A)True
B)False
Q4) Future consideration is also known as executed consideration.
A)True
B)False
Q5) The promisee is the person undertaking the promise.
A)True
B)False
Q6) Is it possible for past consideration to be good consideration?
Page 12
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Chapter 11: Capacity of the Parties
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Q1) A contract with a minor which has no legal effect on either party is called:
A) A voidable contract.
B) A void contract.
C) A good contract.
D) A valid contract.
Q2) The case of Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452 is an example of the principle that:
A) Money paid under a voidable contract is not recoverable unless there has been a total failure of consideration.
B) If no price has been agreed a minor is obliged only to pay a reasonable price.
C) A minor must repudiate a contract within a reasonable time after becoming an adult.
D) None of the above.
Q3) A contract with an infant can never be valid.
A)True
B)False
Q4) A person who becomes bankrupt is prohibited from entering contracts.
A)True
B)False
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Chapter 12: Genuine Consent
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Q1) A common mistake involves genuine agreement between the parties.
A)True
B)False
Q2) Which of the following situations appears to involve 'duress'?
A) A property developer promised their accountant a share in a business venture in return for a reduction in their bill.
B) A woman gave all of her property to the religious order of which she was a member.
C) A man induced another to sign a contract by telling him that if he did not, he would report his son to the police for committing a criminal offence.
D) An elderly Italian couple sign a mortgage in favour of a Bank guaranteeing their son's debts; the Bank manager knows the couple are unaware of the son's financial difficulties.
Q3) The right of an innocent party to rescind may be lost if the parties cannot be substantially restored to their original positions.
A)True
B)False
Q4) Explain the difference between duress and undue influence.
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Chapter 13: Is the Contract Legal
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Q1) An employer can enforce a restraint of trade clause in a contract of employment with an employee, provided it is not an attempt to limit competition.
A)True
B)False
Q2) Which of the following is NOT a factor to consider in determining the validity of a restraint of trade clause?
A) The type of business involved.
B) The geographic extent of the restraint.
C) The relative bargaining powers of the parties.
D) The amount of consideration paid.
Q3) Which of the following cases is authority for the principle that a restraint of trade clause will be valid if it is reasonable?
A) Anderson Ltd v Daniel [1924] 1 KB 138.
B) Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535.
C) Forster & Sons Ltd v Suggett (1918) 35 TLR 87.
D) Public Service Employees Credit Union Cooperative Ltd v Campion (1984) 56 ACTR 39.
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Chapter 14: Terms of the Contract
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Q1) Why was the council held to be liable in The Council of the City of Sydney v West (1965) 114 CLR 481?
A) There was an exclusion clause in the contract.
B) The car was extremely valuable.
C) Of the fundamental breach of the contract.
D) The breach was outside the terms of the contract.
Q2) Which of the following statements is the best description of a 'condition subsequent'?
A) A term in a contract not essential to the main purpose of the contract, non-performance of which will not entitle the plaintiff to rescind the contract.
B) A term in a contract which provides that the contract will terminate on the happening of a particular event.
C) A term which must be satisfied before a contract can come into existence.
D) A term in a contract, the consequences of breach of which cannot be determined until after the breach has occurred and the seriousness of the effects of the breach can be ascertained.
Q3) An intermediate or innominate term is neither a condition nor a warranty.
A)True
B)False
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Chapter 15: Rights and Liabilities of the Parties, Discharge and Remedies
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Q1) Which of the following will NOT result in the discharge of a contract by operation of law?
A) The merger of a simple contract into a formal contract.
B) The death of one of the parties to a contract other than for personal services.
C) The material alteration of a written contract without the consent of the other party.
D) The bankruptcy of one of the parties.
Q2) A contract for personal services can not be assigned.
A)True
B)False
Q3) Why did the court find that the contract was frustrated in the case of: Horlock v Beal [1916] AC 486?
A) Due to the fundamental and radical change in the circumstances of the contract.
B) Due to the declaration of war and the consequent impossibility of performing the contract.
C) Due to the complete destruction of the subject matter of the contract.
D) Due to the non-occurrence of an event essential to achieve the substantial purpose of the contract.
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Chapter 16: Remedies in Contract
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Q1) In Commonwealth of Australia v Amman Aviation Pty Ltd (1991) 104 ALR 1, the court ordered the Commonwealth to:
A) Pay exemplary damages.
B) Mitigate the loss suffered by Amman.
C) Pay damages for expectation and reliance losses.
D) Perform the contract.
Q2) Which of the following statements is the best description of 'liquidated' damages?
A) An amount not fixed in the contract and left for the court to determine.
B) An amount awarded to compensate the innocent party for the loss suffered as a result of the breach of contract.
C) An amount based upon a genuine pre-estimate of actual loss flowing from the breach of contract.
D) An amount awarded to punish the party in breach of the contract.
Q3) To recover special damages under the rule in Hadley v Baxendale (1854) 9 Ex 341 the plaintiff must make known to the other party the special circumstances at the time the contract is entered into.
A)True
B)False
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Chapter 17: Statutory Consumer Guarantees and the
Consumer Law
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Q1) Which of the following factors have to be taken into account in determining 'acceptability'?
A) Whether the purpose for the goods had been made known to the seller.
B) Price.
C) The description applied to the goods.
D) All of the above.
Q2) Which of the following will NOT protect a manufacturer from liability for a breach of the consumer guarantee of fitness for purpose?
A) If the consumer did not rely on the skill or judgment of the manufacturer.
B) If it was caused by something outside human control after it left the manufacturer.
C) If it was cause by something outside human control during manufacture.
D) If it was caused by someone else.
Q3) When will the consumer guarantee as to correspondence with description NOT apply?
A) Whether or not the seller normally deals in goods of that description.
B) Where the consumer has seen the goods but relies on the seller's description.
C) Only when the seller normally deals in goods of that description.
D) Where the consumer has not seen the goods and relies on the seller's description.
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Chapter 18: General and Specific Consumer Protections
Under the Acl
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Q1) In which case did the court set out the guidelines for determining if conduct is misleading or deceptive within the meaning of s 18 of the Australian Consumer Law?
A) McDonald's System of Australia Pty Ltd v McWilliams Wines Pty Ltd (1980) 33 ALR 394.
B) Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.
C) Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) ATPR 40-303.
D) Pacific Dunlop v Hogan (1989) 23 FCR 553.
Q2) Why was the conduct found to be misleading and deceptive in Pacific Dunlop v Hogan (1989) 23 FCR 553?
A) The use of the name might cause confusion in the minds of some consumers.
B) The conduct created the false impression that a commercial relationship existed between the parties.
C) The conduct was not found to be misleading and deceptive.
D) The misconception was caused by use of an existing name which already had a well established reputation.
Q3) What is the main purpose of the Australian Consumer Law?
Q4) To what extent have the laws relating to unconscionability undermined the certainty of commercial and consumer contracts?
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Chapter 19: Agency
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Q1) When an agent negotiates a contract between a principal and a third party, the agent acquires no rights or duties under the contract.
A)True
B)False
Q2) An agent who can make contracts of a class that are normal for this type of agency or do some act for the principal which is part of the agent's ordinary course of business is known as:
A) A 'special' or 'limited' agent.
B) A 'universal' agent.
C) An 'independent' agent.
D) A 'general' agent.
Q3) In what circumstances will Peter be an employer and Paul an employee?
A) Paul is claiming to be Peter's legal representative.
B) Peter is paying Paul to perform a task and Paul is subject to the control and direction of Peter.
C) Peter is paying Paul to perform a task but has no control over how Paul will complete the task.
D) Paul has authority to bind Peter to a contract with a third party.
Q4) Describe how an agency relationship can be terminated.
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Chapter 20: Introduction to Companies and Incorporated
Associations
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Q1) In which of the following situations will a director be found to have breached their duty to exercise discretion?
A) The director has put themselves in a situation where their duties to the company and their personal duties conflict.
B) The director has agreed to vote in a certain way at future board meetings.
C) The director has done something which no reasonable director could regard as being in the interests of the company.
D) The director has exercised one of their powers primarily in order to gain some private advantage.
Q2) The process of bringing a solvent company to an end is known as a creditor's voluntary winding up.
A)True
B)False
Q3) Committee members of an unincorporated association owe a fiduciary duty to the association.
A)True
B)False
Q4) What is a prospectus?
Q5) What is meant by the term 'share capital'?
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Chapter 21: Partnerships
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Q1) Which of the following statements about partner's rights is NOT true?
A) A partner is entitled to interest on any money loaned to the business.
B) Each partner is entitled to claim reasonable remuneration for working for the partnership.
C) Any partner may take part in the management of the business.
D) No partner is entitled to interest on their investment in the partnership until net profit has been determined.
Q2) What is a joint venture?
Q3) The existence of a partnership is to be determined from what the parties do rather than what the parties call themselves.
A)True
B)False
Q4) In the absence of an agreement to the contrary, a person joining a partnership is liable for:
A) None of the debts of the partnership.
B) Only the debts of the partnership incurred after they joined.
C) Only the debts of the partnership incurred before they joined.
D) All of the debts of the partnership.
Q5) What are the three factors that determine whether a partnership exists?
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Chapter 22: Choosing a Business Entity
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Q1) Which of the following is an accurate description of an implied trust?
A) The trustee has the power to choose the beneficiaries and the amounts to be paid to them.
B) The parties clearly intended to create a trust, but did not express that intention.
C) Each beneficiary is identified in the trust deed and has an equal share in the trust.
D) A person has become the legal owner of property as the result of a breach of fiduciary duty.
Q2) Which of the following is NOT one of the duties of a trustee?
A) Preserve the trust property.
B) Indemnify the beneficiaries for any losses.
C) Act in accordance with the trust.
D) Avoid conflict of interest and personal benefit.
Q3) Under an express trust, the beneficiary is able to exercise discretion as to who should benefit and how much they should get.
A)True
B)False
Q4) What is a sole trader?
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Chapter 23: Other Business-Related Torts
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Q1) Which of the following statements is the best description of 'Conversion'?
A) A direct physical interference with another person's lawful possession of land.
B) A direct and intentional act of interference with goods in another person's possession.
C) An intentional denial of another person's right to immediate possession of goods.
D) An unreasonable refusal to return another person's goods to them.
Q2) False imprisonment involves a total restraint of the plaintiff by the defendant to move about.
A)True
B)False
Q3) The tort of conspiracy involves intentional or unintentional injury to the plaintiff. A)True
B)False
Q4) Describe the differences between absolute privilege and qualified privilege in an action in defamation.
Q5) Why is it important that a defamatory statement is published in an action in defamation?
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Chapter 24: Insurance
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Q1) An employee of an insurance company who completes a proposal form on behalf of an intending insured is acting as:
A) An independent agent.
B) The agent of the insured.
C) A principal in his/her own right.
D) The agent of the insurer.
Q2) Which of the following statements about subrogation is NOT correct?
A) Subrogation only applies to contracts of indemnity.
B) For subrogation to apply it must be agreed to by the parties as a term of the contract.
C) Subrogation gives the insurer all the rights of the insured against a third party who caused the loss.
D) Subrogation applies only after the insurer has paid the insured for their loss.
Q3) The doctrine of subrogation:
A) Is limited in its application by the Insurance Contracts Act 1984 (Cth).
B) Continues without restriction.
C) Was abolished by the Insurance Contracts Act 1984 (Cth).
D) Was overruled by the High Court.
Q4) Explain why it is important for an insured to disclose all material facts.
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Chapter 25: Sale of Goods
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Q1) For the purposes of the Competition and Consumer Act 2010, when will a person be regarded as a consumer?
A) When they purchase goods or services.
B) When they purchase goods or services for a money consideration called the price.
C) When they purchase goods or services for less than $40,000 or which are of a kind ordinarily acquired for personal domestic or household use.
D) When they purchase goods or services for less than $40,000.
Q2) In the context of an unconditional contract for the sale of specific goods in a deliverable state, who bears the loss if the goods are destroyed before the buyer takes delivery of them?
A) The seller.
B) Whoever is at fault.
C) The buyer.
D) The seller's insurer.
Q3) Now that the Competition and Consumer Act 2010 (Cth) contains the major consumer protection provisions, what do you perceive to be the major benefits in a contract for the sale of goods of the various state Sale of Goods acts?
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Chapter 26: Electronic commerce
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Q1) Which of the following is NOT a remedy for a person who suffers loss or damage as a result of a breach of the Spam Act 2003 (Cth)?
A) Civil penalties.
B) Compensation.
C) Injunction.
D) Recovery of financial benefits.
Q2) The Electronic Transactions Act 1999 (Cth) provides a legal framework to support and encourage electronic commerce.
A)True
B)False
Q3) Which of the following types of electronic communication will NOT be regulated by the Spam Act 2003 (Cth)?
A) Mobile text messages.
B) Faxes.
C) Voice messages.
D) Emails.
Q4) What is an electronic communication?
Q5) Outline some of the difficulties in applying the law to the World Wide Web (Internet).
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Chapter 27: Property and mortgages
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Q1) A strata title is evidence of ownership of a lot on a horizontal subdivision of land and/or airspace.
A)True
B)False
Q2) Co-owners who hold an equal and undivided interest in property that is characterised by the four unities and survivorship are called joint tenants.
A)True
B)False
Q3) A fixed term lease of Torrens Title land for more than three years must be registered to be valid.
A)True
B)False
Q4) Which of the following is the best definition of a licence in relation to land?
A) Permission to use property in a certain way.
B) A right attached to a particular piece of land for the benefit of another.
C) A grant of exclusive possession of property.
D) An agreement conferring an estate or interest in land for a limited time.
Q5) What are fixtures and why is it important to determine if they are moveable or not?
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Chapter 28: Intellectual propert
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Q1) Which of the following situations will constitute an infringement of copyright?
A) The recording of a television broadcast for educational purposes.
B) Copying by a library for research and study by library users.
C) A public reading of the whole of a published literary work.
D) A photograph of a public sculpture.
Q2) Which of the following statements about 'passing off' is NOT correct?
A) Passing off will not be available if a trade mark is registered.
B) The tort of passing off is designed to protect the reputation or goodwill of a business.
C) Passing off will not be available if the business has not acquired a relevant reputation or goodwill.
D) Passing off arises when a person attempts to 'pass off' or pretend that their goods are those of another person.
Q3) In the context of patent registration, what does the term 'useful' mean?
A) The invention is capable of being used in a practical way.
B) The invention is mechanical rather than biological.
C) The invention is not known publicly.
D) The invention involves an inventive step.
Q4) Where does copyright exist?
Q5) What constitutes fair dealing?
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Chapter 29: Ethics and business practice
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Q1) Which of the following would be the best foundation for an ethical decision?
A) Reason.
B) Self interest.
C) Appearance.
D) All of the above.
Q2) In relation to the concept of organisational integrity, which of the following statements is NOT correct?
A) It is based on self-regulation in accordance with a formal set of guiding principles.
B) It is concerned with the ethical behaviour of a corporate entity.
C) It is designed to ensure that responsibility for wrongful acts will be borne by the individuals responsible.
D) It depends on the existence of an ethical corporate culture.
Q3) All modern companies are required by law to have a code of ethical conduct. A)True
B)False
Q4) What are some of the benefits to business in acting ethically?
Q5) A business can invest in both a socially responsible as well as socially irresponsible manner. Describe and provide examples of both types of investing.
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Chapter 30: Criminal law in a business context
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Q1) Which of the following is NOT prohibited by the restrictive trade practices provisions of the Competition and Consumer Act 2010 (Cth)?
A) Resale price maintenance and price fixing.
B) Agreements to restrict competition.
C) Sending commercial electronic messages without the recipient's consent.
D) Boycotts and abuse of monopoly power.
Q2) Industrial sabotage involves obtaining access to confidential information such as secret formulas, client lists or financial information.
A)True
B)False
Q3) When will a company NOT be criminally liable under the Criminal Code Act 1995 (Cth)?
A) When an offence is committed by an employee or agent of the company.
B) When a corporate culture existed that encouraged or tolerated the offence.
C) When the board or senior management tacitly or impliedly authorised the offence.
D) When failed to create or maintain a corporate culture that required compliance with the law.
Q4) What is the difference between an indictable offence and a summary offence?
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Chapter 31: Restrictive trade practices
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Q1) Which of the following is the correct definition of the term: 'resale price maintenance'?
A) The supplier of goods recommends a price at which the retailer may sell their goods or services.
B) The retailer of goods tries to impose a minimum price below which they will not purchase the goods from the supplier.
C) The supplier of goods tries to impose a minimum price below which their goods or services are not to be sold.
D) An agreement between the supplier and retailer that the goods will not be supplied to competitors of the retailer.
Q2) Which of the following is NOT an order that can be made under s 87 of the Competition and Consumer Act 2010 (Cth)?
A) An order varying a contract.
B) An order declaring part of a contract void.
C) An order directing the supply of services.
D) An order divesting a party of shares.
Q3) What is the role and function of Australian Competition and Consumer Commission?
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Chapter 32: Negotiable instruments
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Q1) Who are the parties involved in a credit card transaction?
A) The cardholder and the bank.
B) The merchant and the bank.
C) The cardholder, the cardholder's bank, the merchant and the merchant's bank.
D) The cardholder, the merchant and the bank.
Q2) Negotiability means that a person who takes an instrument in good faith will acquire all the rights to it in spite of any defect in title.
A)True
B)False
Q3) The Nemo dat quod non habet rule means that no-one can give a better title than they themselves have.
A)True
B)False
Q4) What is the relationship between cheques and bills of exchange?
A) Cheques and bills of exchange are both types of payment order.
B) A cheque and a bill of exchange are the same thing.
C) A bill of exchange is a type of cheque.
D) A cheque is a type of bill of exchange.
Q5) What is a cheque?
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Chapter 33: Insolvency and Debt Recovery
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Q1) Which of the following is NOT one of the aims of bankruptcy legislation?
A) To give the debtor a chance to have a new start.
B) To distribute the debtor's assets equitably.
C) To ensure all of the debtor's creditors are treated fairly.
D) To punish the debtor.
Q2) As an alternative to bankruptcy, a debtor may chose to enter voluntary administration.
A)True
B)False
Q3) In which of the following circumstances would a bankruptcy NOT be extended from 3 to 5 years?
A) The bankrupt failed to disclose that she had travelled to New Zealand for a week on the business of her employer.
B) The bankrupt failed to attend a creditors' meeting.
C) The bankrupt refused to sign a document after being lawfully asked to do so by the trustee.
D) The bankrupt failed to inform the trustee of a change of address.
Q4) Judgment is an order of the court stating that a person is insolvent.
A)True
B)False
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Chapter 34: The Work Environment and the Employment Relationship
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Q1) Which of the following is NOT one of the duties of an employee?
A) To work in a skillful and competent manner.
B) To exercise reasonable discretion in decision making.
C) To hand over inventions made in the course of employment.
D) To disclose information relevant to the employer.
Q2) Once a contract of employment is in place, there is a duty on the employer to provide work.
A)True
B)False
Q3) A person working under a contract for service is known as an independent contractor.
A)True
B)False
Q4) The worker's compensations schemes are based on the laws of negligence.
A)True
B)False
Q5) The Workplace Health and Safety Act 2011 does not apply to contractors or subcontractors.
A)True
B)False
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Chapter 35: Consumer Credit and Privacy
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Q1) A person who promises to pay the full amount of the debt if the borrower defaults is called a:
A) Related borrower.
B) Linked borrower.
C) Judgment debtor.
D) Guarantor.
Q2) Which of the following is the best definition of a 'tied loan contract'?
A) A credit contract in which the credit provider is the borrower's employer and the loan is tied to the borrower's continued employment.
B) A credit contract whereby the borrower gives the credit provider rights to assets owned by the borrower to secure repayment under a credit contract.
C) A credit contract entered into to pay for goods or services provided by a supplier who referred the borrower to the credit provider.
D) A credit contract in which multiple advances of credit are contemplated and the amount of available credit increases as the debt is reduced.
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Chapter 36: Ethics and Regulations in Marketing and Advertising
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Q1) Which of the following is NOT protected by the law of copyright?
A) People and their images.
B) Concepts, techniques and slogans.
C) Ideas and information.
D) All of the above.
Q2) Which of the following industries attract greater scrutiny due to the particular ethical issues they raise?
A) The tobacco industry.
B) The alcohol industry.
C) The fast food industry.
D) All of the above.
Q3) Which of the following is the best description of 'bait advertising'?
A) Advertising goods or services that they do not intend to supply.
B) Advertising a product or service at a cheap price only to tell customers it is no longer available and offering another at a higher price.
C) Accepting payment for goods or services that are different from those which were ordered.
D) All of the above.
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