Business law encompasses all of the laws that dictate how to form and run a business. This includes all of the laws that govern how to start, buy, manage and close or sell any type of business. Business laws establish the rules that all businesses should follow. This PPT share questions on Australian Business law

1. BUSINESS LAW
IN AUSTRALIA

2. QUESTIONS
 Question 1 (10 Marks)
Mr. and Mrs. Lee provide a guarantee to a bank over a loan for a motor
vehicle purchased by their son Lim. Lim subsequently defaults on his
repayments and the bank seeks to enforce the guarantee against his
parents. At the time the guarantee was entered into, neither parent had
a good grasp of the English language, both were elderly and they
received no independent legal advice. Mr. and Mrs. Lee believed that
the extent of their liability was far more limited than it was. Upon what
grounds could it be argued that reality of consent is missing from the
guarantee agreement? What would be the likely status of the
agreement?
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3. QUESTIONS
 Question 2 (10 Marks)
Critically analysis the following scenario and advise Belinda
whether she has an action against the ferry company for the loss
of her car.
Belinda, who resides in Melbourne, decided to take her family to
Hobart. Arriving at the ferry (which she has often used before),
she is given a ticket on paying her fare and the fare of her three
children. On the reverse side is written:
“All vehicles and passengers use this ferry at their own risk”
She does not read these words nor does she see the notice on
the ferry itself that has identical wording. Due to negligent
navigation by its captain, the ferry collides with an underwater
obstruction marked by a warning buoy. The ferry sinks slowly
enough for all the passengers and crew to be rescued but the
ferry and vehicles on it are lost.
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over-a-loan-for-a-motor-v.html

4. ANSWER 1: FACTUAL BACKGROUND
 Lim had taken loan from bank for purchasing a bike in which his parents stand
as guarantors.
 On failing to make the payments on time, the bank charges Mr and Mrs Lee for
the payment.
 It was argued by them with the bankers that at the time of contract they didn’t
understand English well.
 They didn’t receive a separate legal notice.
 Consequently, they have no liability for repaying the loan amount.
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over-a-loan-for-a-motor-v.html

5. ISSUES FRAMED
1. Whether Mr. and Mrs. Lee are bound by the terms of the
guarantee?
2. Whether they can claim the fact as to their consent was missing
in guarantee at the time of signing?
3. Whether the bank has the right to claim for repayment of loan
from Mr and Mrs Lee?
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over-a-loan-for-a-motor-v.html

6. RULES
 Contracts are agreements which create an obligation on the parties to contract
from doing to refraining from doing a particular act.
 Consent is one of the major essences of a contract. Mutual consent of both
the parties to the contract is necessary.
 Illiteracy doesn’t act as exemption while entering into the contract. An illiterate
person must take help from another person for learning the facts about the
contract.
 In certain circumstances where the guarantors can challenge against the claim
made to them even though they signed the document earlier.
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7. APPLICATIONS
1. They are not bound by the claim of repayment as the agreement
was written in English.
2. They believed that the guarantee was limited than to the range the
bank was claiming.
3. None of them received any individual legal advices before
entering into the contract or at the time of contracting.
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over-a-loan-for-a-motor-v.html

8. CONCLUSION
1. Mr. and Mrs. Lee aren’t bound to pay the loan amount.
2. They can claim that their sign was without consent.
3. The bank cannot claim for repayment from Mr and Mrs Lee.
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over-a-loan-for-a-motor-v.html

9. ANSWER 2: FACTUAL BACKGROUND
 Belinda plans for a trip to Hobart and decides to take up ferry.
While taking the ticket for ferry.
 She fails to notice the warning written on the other side of the
ticket.
 Warning states that all passengers and vehicles will be travelling at
their own risk.
 An accident takes place and as such in that coarse, Belinda’s
vehicle is lost.
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over-a-loan-for-a-motor-v.html

10. ISSUES FRAMED
1. Whether the ferry company has any sort of fidelity towards
Belinda?
2. Whether Belinda can claim any compensation from ferry company
for the damages caused?
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over-a-loan-for-a-motor-v.html

11. RULES
 RULE 1:Civil Liability Act,2000
A professional can be termed as an individual who owes a necessary duty towards a large
number of people. So in that respect, if any individual fails to do his duty, then he is liable to
pay compensation to those people.
 RULE 2: section 5R
 Contributory negligence stands for failure of taking the amount of care which a person was
suppose to take as a part of his duty.
 There is no liability on the part of the professional in regards to giving information or advice
or warning to people about the risk of the accident or risk of death.
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12. APPLICATIONS
 It is obligatory on the part of the ferry company to compensate the
passengers for the damages suffered by them for the captain’s
negligence.
 A warning can be raised on the accounts of any natural phenomenon
but not for the negligence of any person.
 It has been mentioned that the mishap took place due t captain’s
negligence.
 Belinda can proceed with a suit against ferry company.
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13. CONCLUSION
1. The ferry company owes fidelity towards Belinda and other
passengers and has the obligation to pay for damages caused.
2. Belinda can claim compensation for damages caused to her from
the ferry company.
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14. References
Bellettiere, John et al, 'Developing And Selecting Auditory Warnings For A Real-Time Behavioral
Intervention' (2014) 2 American Journal of Public Health Research
Carrasco, Angel, 'The DCFR – Guarantee And Personal Security Contracts' (2008) 4 European
Review of Contract Law
Moon, Gillian and Emma Swart, How To Get Out Of A Contract Of Guarantee (Consumer Credit
Legal Service, 1991)
'Negligence. Duty Of Care. Duty To Rescuer Of Person Endangered By Defendant's Negligence'
(1911) 24 Harvard Law Review
Pratt, Steve, Duty Of Care (Simon & Schuster, 2000)
Hammer Waste Pty Ltd v QBE Mercantile Mutual Ltd [2002] ANZ insurance cases
Moloney v Bells Securities Pty Ltd [2005] QSC
Austlii.edu.au, CIVIL LIABILITY ACT 2002 - SECT 5Pdivision Does Not Apply To Duty To Warn
Of Risk (2015) <http://www.austlii.edu.au/au/legis/nsw/consol_act/cla2002161/s5p.html>
Moneysmart.gov.au, Loans Involving Family & Friends | Moneysmart By ASIC (2015)
https://www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/loans-involving-family-and-
friends
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