Legal Environment of Business Exam Preparation Guide
Course Introduction
The Legal Environment of Business introduces students to the fundamental principles and frameworks that govern the relationship between businesses and the legal system. The course explores topics such as contracts, torts, agency, business organizations, intellectual property, and government regulation, including environmental, labor, and antitrust laws. Emphasis is placed on understanding how legal concepts impact managerial decision-making, risk management, and the ethical responsibilities of businesses. Through case studies and real-world examples, students learn to identify legal issues, assess the implications of legal decisions, and apply practical strategies to ensure compliance and ethical conduct in business operations.
Recommended Textbook Business Law 9th Edition by Andy Gibson
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Chapter 1: Legal Foundations
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Q1) A significant feature of the civil law (code) system is:
A) Law made by Judges.
B) Law based on the Roman law that developed from the code of Justinian.
C) Adversarial based legal process.
D) Law made by civil institutions.
Answer: B
Q2) Roman law, Canon law and Merchant law are major sources of English law.
A)True
B)False
Answer: False
Q3) Laws made by parliaments are called statute law.
A)True
B)False
Answer: True
Q4) Which is the best definition of Civil Law as a legal system?
A) Laws based on the Koran.
B) Codified laws.
C) Laws based on the Bible.
D) Laws made by sovereigns.
Answer: B
Page 3
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Chapter 2: Origins of Australian Law
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Q1) The doctrine of separation of powers was formulated by:
A) A Phillip.
B) J Montiesquieu.
C) J Cook.
D) A B Dicey.
Answer: B
Q2) Which section of the Australian Constitution vests Judicial Power in the High Court of Australia?
A) Section 71 of the Constitution.
B) Section 51 of the Constitution.
C) Section 1 of the Constitution.
D) Section 61 of the Constitution.
Answer: A
Q3) Which High Court case held that Criminal Laws do not apply to Aboriginal people?
A) The Wik People v The State of Queensland and Others (1996) 187 CLR 1.
B) Mabo v Queensland (No 2) (1992) 175 CLR 1.
C) Walker v New South Wales (1994) 182 CLR 45.
D) None of the above.
Answer: D
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Page 4
Chapter 3: Legal Systems
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Q1) Which of the following is NOT one of the purposes of having a hierarchical court structure?
A) A hierarchy of courts is instrumental in establishing precedent.
B) A hierarchy of courts provides a system of appeals through which dissatisfied litigants may appeal from a decision of a lower court to a high court to have the matter reconsidered.
C) A hierarchy of courts ensures that the decision of any court is final and cannot later be reviewed or overturned.
D) It allows litigants the quickest legal remedy.
Answer: C
Q2) Consumer claims under the Australian Consumer Law are dealt with by the Australian Competition and Consumer Tribunal.
A)True
B)False
Answer: False
Q3) The High Court only has appellate jurisdiction.
A)True
B)False
Answer: False
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Page 5
Chapter 4: How Law Is Made: Precedentstatute Law
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Q1) Which of the following statements most accurately defines 'obiter dictum'?
A) Anything else said about the law in the course of a judgment that does not form part of the matters in issue.
B) The doctrine of precedent; 'to stand by a decision.'
C) The legal reasoning upon which the decision in a case was based.
D) The final order of the court is binding on the immediate parties to the action.
Q2) According to the literal approach to statutory interpretation, a court should interpret the wording of a statute literally. Explain why this is historically the preferred approach of the courts, and why it might, in some situations, lead to injustice or an otherwise inappropriate result.
Q3) A persuasive precedent is one which the lower courts in a court hierarchy must follow.
A)True B)False
Q4) An Act of parliament does not become law until it has received Royal Assent. A)True B)False
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) Who is the reasonable person and why is he/she so important in an action for negligence?
Q2) Describe the difference between tort law and contract law.
Q3) Define a tort.
Q4) In the case of <i>Donoghue v Stevenson</i> [1932] AC 562, why did Donoghue sue Stevenson in negligence and not contract?
A) The contract between Stevenson and Donoghue expressly excluded liability.
B) There was no contract between Donoghue and Stevenson.
C) The law of contract cannot be used to recover compensation for personal injury.
D) The contract was between Donoghue and the retailer.
Q5) Describe what a Plaintiff must do in order to succeed in an action for negligence.
Q6) If a plaintiff has a pre-existing condition that makes their injuries worse:
A) The 'exceptional circumstances' test will apply.
B) Damages will be reduced for contributory negligence.
C) The defendant is liable for any loss of the same kind that would be reasonably foreseeable.
D) The defendant is only liable if the particular damage is foreseeable.
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Page 7
Chapter 6: Applications of Negligence to Business
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Q1) Do you think it appropriate that volunteers and 'Good Samaritans' be protected from the consequences of their carelessness? Explain your answer.
Q2) It is easier to take action against a manufacturer of a defective product under consumer protection legislation than under the common law because:
A) It is quicker and cheaper.
B) There is no need to prove fault.
C) Statute law takes precedence over the common law.
D) The manufacturer is strictly liable.
Q3) Liability for criminal negligence might arise because:
A) The accused failed to exercise reasonable care and this caused death or injury to a member of the community.
B) There was a very serious departure from reasonable standards of care.
C) The accused was reckless in the face of it being reasonably foreseeable that the injured person would suffer serious harm.
D) All of the above.
Q4) Occupiers never owe a trespasser a duty of care.
A)True
B)False
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Chapter 7: Introduction to Contracts
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Q1) The decision in <i>Lee Road Pty Ltd v Catanzariti & Anor</i> [2005] SADC 64 was that an exchange of faxes was sufficient to satisfy the requirement for written evidence of a contract.
A)True
B)False
Q2) For the creation of an apparent simple contract, intention, agreement and consideration must be shown to be present.
A)True
B)False
Q3) A formal contract derives its validity from its form alone and does not require consideration to be present.
A)True
B)False
Q4) A contract is always an agreement but an agreement is not always a contract.
A)True
B)False
Q5) A valid contract is one which can be enforced by both parties.
A)True
B)False
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Chapter 8: Agreement Between the Parties
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Q1) What is the purpose of an option?
Q2) According to the postal rule, where the parties contemplate the use of the post as a method of communication, an acceptance is effective as soon as it is posted. Why do you think the courts originally developed this rule? Do you think those reasons are still valid today?
Q3) In relation to contract law an invitation to treat is best described as:
A) An offer to accept an offer.
B) An offer.
C) An offer to offer an offer.
D) An offer to consider offers.
Q4) If an offer is made by facsimile and no method of acceptance is specified by the offeror, which of the following methods of acceptance would NOT be effective?
A) Email.
B) Telephone.
C) Facsimile.
D) Post.
Q5) If an offer and acceptance cannot be identified, there can never be a contract.
A)True
B)False
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Chapter 9: Intention to Create Legal Relations
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Q1) A subjective test is used to determine the state of minds of the parties.
A)True
B)False
Q2) 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.
Q3) Why was a promise to make an ex gratia payment held to be contractually binding in the case of Edwards v Skyways Ltd [1964] 1 WLR 349?
A) The parties used clear words.
B) The agreement was commercial and promissory in nature.
C) The parties were both corporate entities.
D) The promise had serious consequences.
Q4) Parties to a commercial agreement who do not wish the agreement to be legally binding:
A) Can expressly declare that they do not intend to create legal relations.
B) Are unable to prevent the agreement from being legally enforceable.
C) Need not do anything.
D) Can expressly exclude the jurisdiction of the courts.
Page 11
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Chapter 10: Consideration
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Q1) Only a promise supported by consideration will be enforced by a court.
A)True
B)False
Q2) The doctrine of promissory estoppel:
A) Can be used to commence a civil action but not as a defence to a civil action.
B) Can be used to either commence or defend a civil action.
C) Can be used as a defence to a civil action, but not to commence a civil action.
D) All of the above.
Q3) Estoppel was rejected Easts Van Villages v Minister Administering the National Parks and Wildlife [2001] NSWSC 559 because:
A) The plaintiff had not suffered any detriment.
B) The defendant's statement was not unambiguous.
C) Estoppel was not rejected.
D) The parties had equal bargaining power.
Q4) Is it possible for past consideration to be good consideration?
Q5) Consideration must be present or future, it cannot be past.
A)True
B)False
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Chapter 11: Capacity of the Parties
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Q1) In Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452, the infant:
A) Was able to rescind the contract and recover the money.
B) Was not able to rescind the contract.
C) Was able to rescind the contract but could not recover the money.
D) Could recover all the money she had paid for the shares.
Q2) A contract with a minor which the minor has a right to repudiate is called:
A) A good contract.
B) A void contract.
C) A valid contract.
D) A voidable contract.
Q3) A person who becomes bankrupt is prohibited from entering contracts.
A)True
B)False
Q4) Which of the following is NOT relevant to the validity of a beneficial contract of service with a minor?
A) The whole of the terms of the contract.
B) Whether the balance is in the minor's favour.
C) The nature of the employment.
D) Any harsh or onerous terms.
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Chapter 12: Genuine Consent
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Q1) Which of the following statements is the best description of 'common mistake'?
A) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.
B) One of the parties is mistaken as to the nature of the document which they have signed.
C) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
D) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.
Q2) Under the Australian Consumer Law, unconscionability is the same as misleading and deceptive conduct.
A)True
B)False
Q3) In the case of a contract for the sale of goods which is rendered void for mistake, a third party who has subsequently acquired those goods will not be entitled to retain them.
A)True
B)False
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Chapter 13: Is the Contract Legal
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Q1) Why was the plaintiff in the case of Re Mahmoud v Ispahani [1921] 2 KB 716 unsuccessful despite the fact that they were innocent of any illegality?
A) The contract was illegal as formed.
B) The statute prohibited the making of the contract.
C) The prohibition was in the public interest.
D) All of the above.
Q2) In which of the following cases did the court decide that the contract was valid but illegal as performed?
A) St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267.
B) Re Mahmoud v Ispahani [1921] 2 KB 716.
C) Anderson Ltd v Daniel [1924] 1 KB 138.
D) Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42.
Q3) A clause in a contract referring disputes to arbitration instead of the courts is valid.
A)True
B)False
Q4) How can the court's willingness to declare a contract illegal or void at common law be reconciled with the courts' determination to respect the notion of 'freedom of contract'?
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Chapter 14: Terms of the Contract
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Q1) What was the reason for the decision in the case of Hoyts Pty Ltd v Spencer (1919) 27 CLR 133?
A) The oral statement was promissory and therefore enforceable as a collateral contract.
B) The oral statement was representational rather than promissory.
C) The oral statement was intended to form part of the agreement between the parties.
D) The oral statement was inconsistent with the terms of the written document.
Q2) 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.
Q3) If a collateral contract is inconsistent with an exclusion clause in the main contract, the collateral contract will prevail.
A)True
B)False
Q4) Explain and distinguish between a condition and a warranty.
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Chapter 15: Rights and Liabilities of the Parties, Discharge and Remedies
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Q1) The decision of the court in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 was:
A) That the manufacturer of the machine which was being built to meet the order of the purchaser could not recover the cost of manufacturing the machine because the frustrating event had intervened to terminate the contract.
B) That the purchaser of the machine could recover the deposit which it had paid.
C) That the contract was terminated by frustration.
D) All of the above.
Q2) What factors must be present in order for a contract to be discharged by frustration?
Q3) Which of the following involves the discharge of a contract by performance?
A) One of the parties becomes bankrupt.
B) Each party discharges the obligation of the other to perform the contract.
C) The parties carry out exactly the terms of the contract.
D) Performance of the contract becomes impossible due to the occurrence of an unforeseen event.
Q4) Explain the meaning of novation and what does it create.
Q5) Describe the quantum meruit rule and when it arises.
Page 17
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Chapter 16: Remedies in Contract
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Q1) 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.
Q2) 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.
Q3) When a person fails to perform their obligations under a contract, why is it that they are not liable to compensate the innocent party for all of the loss and damage arising as a result of their breach?
Q4) What is a penalty?
Q5) What is the purpose of rescission?
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Chapter 17: Statutory Consumer Guarantees and the Australian Consumer Law
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Q1) If a seller does not have title to the goods at the time of transfer, then there is a total failure of consideration.
A)True
B)False
Q2) The test of acceptable quality of goods is an objective test of the reasonable consumer.
A)True
B)False
Q3) Why was claim for damages caused by contaminated mink food unsuccessful in the case of: Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441?
A) The food had been made to the plaintiff's specifications.
B) The food still conformed to its description in spite of the contamination.
C) The defendant's were not responsible for the contamination.
D) None of the above.
Q4) What are the implied guarantees that must be included in every agreement by a manufacturer to supply goods to a consumer?
Q5) Do you consider that the remedies now available to consumers under the Australian Consumer Law are adequate?
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Chapter 18: General and Specific Consumer Protections
Under the Acl
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Q1) Why was the conduct found not to be misleading and deceptive in McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd [1980] ATPR 40-188?
A) The target audience of the conduct would not be misled into thinking there was a connection between the two products.
B) The conduct was found to be misleading and deceptive.
C) Merely causing consumers to wonder if the product is made by the same manufacturer is not sufficient.
D) The products were clearly labelled so there was nothing more the manufacturer could do.
Q2) Section 29(1) of the Australian Consumer Law prohibits false representations regarding services relating to:
A) The price of the service.
B) The standard, quality, value or grade of the service.
C) The buyer's need for the service.
D) All of the above.
Q3) Section 18 is often used by businesses to take action against competitors.
A)True
B)False
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Chapter 19: Agency
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Q1) An agent who can only make a particular type of contract or carry out a particular transaction on behalf of the principal is known as:
A) A 'special' or 'limited' agent.
B) A 'universal' agent.
C) An 'independent' agent.
D) A 'general' agent.
Q2) The decision in the case of: Tooth & Co v Laws (1888) 9 LR (NSW) 154 was based on the fact that:
A) The dealings of the secretary appeared to be within the scope of their authority even though they lacked actual authority.
B) The defendant's previous conduct in paying for the jewellery amounted to a representation of the agent's authority.
C) The defendant's failure to notify the suppliers of the sale of business prohibited him from denying that the purchasers were his agents.
D) Buying and selling cars was a normal practice of that kind of business.
Q3) What constitutes a 'secret commission' received by an agent? Outline any remedies available to the principal as a consequence of receiving a secret commission.
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Chapter 20: Introduction to Companies and Incorporated
Associations
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Q1) The process of bringing a solvent company to an end is known as a creditor's voluntary winding up.
A)True
B)False
Q2) What is a prospectus?
Q3) Committee members of an incorporated association owe a fiduciary duty to the association.
A)True
B)False
Q4) A director in breach of s 588G may be personally liable for the company's debts.
A)True
B)False
Q5) Which of the following is an advantage of using a company as a business structure?
A) Shareholders have limited liability for the debts of the company.
B) Reporting requirements are minimal.
C) Directors have limited liability for the actions of the company.
D) Low establishment cost and ongoing fees.
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Q6) In what circumstances will a director be personally liable for the debts of the company?
Chapter 21: Partnerships
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Q1) Which of the following statements is NOT correct?
A) A limited partnership must be registered.
B) A limited partner has only a limited role in management of the partnership business.
C) A general partner has unlimited liability for partnership debts.
D) A limited partnership must have at least one general partner.
Q2) A form of property ownership in which the parties have shares which can be unequal and dealt with separately is known as:
A) Common ownership.
B) Unity of ownership.
C) Tenancy in common.
D) Joint tenancy.
Q3) Partnerships must be associations formed with a view to profit.
A)True B)False
Q4) Is it necessary for a partnership to advise customers when a partner retires?
Q5) A limited liability partnership can have a maximum of 20 general partners.
A)True B)False
Q6) 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 statements about a trustee is NOT true?
A) The liability of a trustee is unlimited unless a company is appointed to operate the business of the trust.
B) Any person capable of holding the title to property is capable of being a trustee.
C) The trustee is responsible for all losses on trust investments.
D) The trustee is entitled to full indemnity out of the trust property for their expenses and costs.
Q2) A franchisor is liable for the debts of a franchisee.
A)True
B)False
Q3) Franchises are regulated by the Franchising Code of Conduct.
A)True
B)False
Q4) A franchise is a specialised business entity.
A)True
B)False
Q5) Franchises are regulated by the Competition and Consumer Act 2010 (Cth).
A)True
B)False
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Chapter 23: Other Business-Related Torts
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Q1) For the tort of passing off to apply, the parties must both be in the same business.
A)True
B)False
Q2) The tort of conspiracy involves intentional or unintentional injury to the plaintiff.
A)True
B)False
Q3) Which of the following may be a crime as well as a tort?
A) Conspiracy and injurious falsehood.
B) Intimidation and conspiracy.
C) Deceit and intimidation.
D) All of the above.
Q4) Which of the following statements about private nuisance is NOT correct?
A) The remedies are injunction and/or damages.
B) Only the person in occupation of land can sue for nuisance.
C) The nuisance must be substantial and unreasonable.
D) The nuisance must cause physical damage to the plaintiff's property.
Q5) Are there any business-related torts which you believe to be redundant, out of date or irrelevant to modern business? Explain your answer.
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Chapter 24: Insurance
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Q1) In a contract of insurance, the offer is accepted when:
A) The insurer sends the insured a proposal form (acceptance) following the insured's request (offer).
B) The insured completes and submits (acceptance) the proposal form sent out by the insurer (offer).
C) The insurer issues a cover note (acceptance) following the insured's request (offer).
D) The insurer accepts the proposal (acceptance) submitted by the insured (offer).
Q2) To whom may an insured apply in relation to a dispute with a general insurer?
A) Life Insurance Complaints Service Ltd.
B) Insurance Enquiries and Complaints Ltd.
C) General Insurance Division Ombudsman.
D) Insurance Broker's Dispute Facility.
Q3) In order to claim on a policy, an insured must be able to show that:
A) They have suffered a loss because of the damage to or destruction of the property insured.
B) They have an insurable interest in the property insured.
C) They have either a legal or an equitable interest in the property insured.
D) They are the owner of the property insured.
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Chapter 25: Sale of Goods
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Q1) Which of the following would be classified as 'goods' within the meaning of the Sale of Goods Act?
A) The repair of a watch.
B) A house.
C) A cheque.
D) Apples picked from an apple tree.
Q2) The protection given to consumers by the Sale of Goods legislation is limited because:
A) The legislation only applies to contracts for the sale of goods and services.
B) The legislation has been made irrelevant by the Competition and Consumer Act 2010 (Cth).
C) The legislation is UK law and does not apply in Australia.
D) The implied conditions and warranties can be excluded by a clause in the contract.
Q3) Estoppel is an exception to the nemo dat quod non habet rule.
A)True
B)False
Q4) An unpaid seller has rights against the goods and against the buyer.
A)True
B)False
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Chapter 26: Electronic commerce
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Q1) According to the electronic transactions legislation, the place of dispatch or receipt of an electronic communication will be:
A) The location of the information system outside the originator's control.
B) Determined in accordance with the postal acceptance rule.
C) The place of business (or residence if there is no place of business) of the parties.
D) Governed by the laws of the state or country in which the offer was accepted.
Q2) Which of the following does NOT need to be stated on an e-commerce website?
A) An Australian Company Number (ACN) or Australian Business Number.
B) A real name, street address and telephone.
C) Security when transferring detail and privacy policy.
D) The hours during which the business can be contacted.
Q3) A procedure which prevents a customer from proceeding with a transaction until they have clicked an acknowledgement of the terms and conditions is called a 'Clickwrap Agreement.'
A)True
B)False
Q4) What is 'Cybersquatting'?
Q5) What is an electronic communication?
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Chapter 27: Property and mortgages
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Q1) When exercising the power of sale, a mortgagee has a duty to take reasonable steps to obtain a fair price.
A)True
B)False
Q2) Which of the following statements about common law title is NOT correct?
A) A system of deed registration provides protection of the owner's rights.
B) Any break in the chain of documents can deprive the owner of a good title.
C) Common law title is established by a series of deeds.
D) A mortgage of common law title involves transfer of the title to the lender.
Q3) A lease of land would be classified as real property.
A)True
B)False
Q4) In the context of property law, which of the following is the best definition of the term: 'property'?
A) The rights or ownership of an object.
B) Possession or physical control of an object.
C) Land and anything fixed to it.
D) Real property.
Q5) Describe the three main types of property.
Q6) What is the meaning of the term 'survivorship' in respect to interests in land?
Page 29
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Chapter 28: Intellectual propert
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Q1) Which of the following would be characterised as an intellectual property right?
A) The right to copy a book.
B) The right to sell a book.
C) The right to buy a book.
D) The right to read a book.
Q2) Which of the following is the best definition of a 'collective' trade mark?
A) A trade mark registered in respect of a type of goods and services not sold by the registered proprietor in order to defend a well-established trademark.
B) A trade mark used to indicate a special quality rather than a connection between a person and particular goods or services.
C) A sign used to distinguish the goods or services of members of an association from those of non-members.
D) A sign indicating the overall appearance, resulting from the visual features of an object of manufacture.
Q3) Unless a trade mark is registered, the owner has no protection.
A)True
B)False
Q4) What constitutes fair dealing?
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Chapter 29: Ethics and business practice
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Q1) Why is tax evasion considered to be unethical?
A) The taxpayer is trying to avoid paying their share towards community services.
B) Tax money is often used for purposes with which the taxpayer does not agree.
C) It is illegal.
D) Everyone pays tax in some form.
Q2) The distinction between the letter and the spirit of the law is largely a moral or ethical question.
A)True
B)False
Q3) Which of the following would be an example of a conflict of interest in a business context?
A) The director of a company votes in favour of a contract for services to be provided by his family company.
B) A real estate agent regularly refers clients to a firm of solicitors of which his wife is the principal solicitor.
C) The purchasing officer for a business accepts a commission to place orders exclusively with a particular company.
D) All of the above.
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Chapter 30: Criminal law in a business context
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Q1) Criminal liability requires proof of either a guilty mind (mens rea) or a guilty act (actus reus).
A)True
B)False
Q2) In the context of criminal law, what is the meaning of the term: actus reus?
A) The guilty mind.
B) The guilty act.
C) The wrongful mind.
D) The wrongful act.
Q3) Any person who removes more than $10,000 in cash from Australia commits an offence under the Financial Transactions Reports Act 1988 (Cth).
A)True
B)False
Q4) Which of the following is NOT an advantage for an accused having a criminal matter dealt with summarily?
A) The matter will be dealt with more quickly.
B) The penalty imposed may be lower.
C) An acquittal by the magistrate cannot be appealed by the Crown.
D) It is cheaper to have the matter dealt with in a lower court.
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Chapter 31: Restrictive trade practices
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Q1) Which of the following is the definition of 'market' given by s 4E of the Competition and Consumer Act 2010 (Cth)?
A) An area of close competition between firms.
B) A market in Australia for goods or services and other goods or services which can be substituted for the first mentioned goods and services.
C) An area of actual and potential transactions between buyers and sellers amongst whom there can be strong rivalry.
D) All of the above.
Q2) Corporations that have become merged in contravention of the Act can be separated by forcing the disposal of shares.
A)True
B)False
Q3) Which of the following bodies is primarily responsible for enforcing the Competition and Consumer Act 2010 (Cth)?
A) The Prices Surveillance Authority.
B) The Australian Competition and Consumer Commission.
C) The Australian Competition Tribunal.
D) The Trade Practices Commission.
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Chapter 32: Negotiable instruments
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Q1) What is a cheque?
Q2) A bill of exchange is signed by Adam, addressed to Peter and made payable to Paul, who indorses and delivers it to David. In this situation Peter is referred to as:
A) The drawee and the acceptor.
B) The drawer and the payee.
C) The acceptor and the holder.
D) The payee and the indorsee.
Q3) In what way is a 'negotiable' instrument an exception to the nemo dat quod non habet rule?
A) It is able to be transferred from one person to another.
B) It can be passed from one person to another on terms to be decided by those parties.
C) The right to the instrument is transferred with physical possession.
D) It is of an amount yet to be determined.
Q4) If Chris steals an open bearer cheque and uses it to purchase a computer:
A) The holder has a better title to the cheque than the rogue transferor.
B) The seller of the computer is a holder in due course.
C) The seller of the computer is entitled to cash the cheque.
D) All of the above.
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Chapter 33: Insolvency and Debt Recovery
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Q1) Which of the following is the correct definition of an 'instalment order'?
A) An order of the court declaring the debtor bankrupt.
B) An order of the court authorising a court officer to seize the goods of the debtor and sell them.
C) An order of the court directing the debtor to pay the debt in specified amounts on specified dates.
D) An order of the court directing a person who owes money to the debtor to pay the money into the court.
Q2) Which of the following is the correct definition of a 'garnishee order'?
A) An order of the court declaring the debtor bankrupt.
B) An order of the court authorising a court officer to seize the goods of the debtor and sell them.
C) An order of the court directing the debtor to pay the debt in specified amounts on specified dates.
D) An order of the court directing a person who owes money to the debtor to pay the money into the court.
Q3) What are the three main aims of the Bankruptcy Act 1966 (Cth)?
Q4) In what way is a Part IX arrangement a preferable course of action for a person facing bankruptcy?
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Chapter 34: The Work Environment and the Employment Relationship
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Q1) What are the aims of Occupational Health and Safety Legislation?
Q2) Due to the personal nature of the employment contract, the death of either party will terminate the contract.
A)True
B)False
Q3) Where legislation is silent on an industrial or employment issue, the common law will apply.
A)True
B)False
Q4) Which of the following is NOT a factor to consider when determining whether an employer has provided a safe system of work?
A) The level of remuneration of the employees concerned.
B) The type and adequacy of plant and equipment supplied.
C) Whether the task is simple or complex.
D) Standard practice and custom in the relevant industry.
Q5) Do you think that any of the human rights-based work regulations have gone too far in compromising the needs and rights of employers in favour of 'political correctness'? Explain.
Q6) Outline the duties of the employer and employee.
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Chapter 35: Consumer Credit and Privacy
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Q1) To be valid, a mortgage must be in writing, signed by the mortgagor and clearly identify the mortgaged property.
A)True
B)False
Q2) The National Credit Code only applies if the debtor is a natural person.
A)True
B)False
Q3) A linked credit provider may be liable for any loss or damage cause by defective goods or services provided by the supplier.
A)True
B)False
Q4) If a borrower has previously settled a dispute with a credit provider they cannot later apply to the court to reopen the transaction for unconscionability.
A)True
B)False
Q5) A credit card is an example of a continuing credit contract.
A)True
B)False
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Chapter 36: Ethics and Regulations in Marketing and Advertising
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Q1) Power in the market place is a recurring factor in the discussion of ethical marketing practices.
A)True
B)False
Q2) Which of the following is NOT likely to be an issue for consideration by a marketer of a new product?
A) Ensuring customers are not mislead by promotional material.
B) Product safety standards.
C) Protection of the intellectual property rights in the product.
D) Effectiveness of the product.
Q3) Which of the following is the correct definition of a 'slotting allowance'?
A) Selling a product at a low price with the intention of driving competitors out of the market.
B) Taking advantage of a change in market circumstances to increase prices.
C) Charging a supplier a fee for access to the shelf space of a retail store.
D) Inducing a customer to sign an open ended periodic payment authority.
Q4) The role of the marketer is to make potential customers aware of a product.
A)True
B)False
Page 38
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