BUSINESS LAW IIBMS EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

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DR. PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

 Note : - All the Questions Are compulsory

CASE -1 Harvey V/S Facey

Harvey v Facey [1893], is a contract law case decided by the United Kingdom Judicial Committee of the Privy Council on

appeal from the Supreme Court of Judicature of Jamaica. In 1893 the Privy Council held final legal jurisdiction over most of

the British Caribbean. Its importance in case law is that it defined the difference between an offer and supply of

information. The Privy Council held that indication of lowest acceptable price does not constitute an offer to sell. Rather, it

is considered a response to a request for information, specifically a "precise answer to a precise question" about the lowest

acceptable price which the seller would consider.

The case involved negotiations over a property in Jamaica. The defendant, Mr LM Facey, had been carrying on negotiations

with the Mayor and Council of Kingston to sell a piece of property to Kingston City. On 7 October 1893, Facey was traveling

on a train between Kingston and Porus and the appellant, Harvey, who wanted the property to be sold to him rather than

to the City, sent Facey a telegram. It said, "Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid".

Facey replied on the same day: "Lowest price for Bumper Hall Pen £900." Harvey then replied in the following words. "We

agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order

that we may get early possession."

Facey, however refused to sell at that price, at which Harvey sued. Harvey had his action dismissed upon first trial

presided over by Justice Curran,(who declared that the agreement as alleged by the Appellants did not denote a concluded

contract) but won his claim on the Court of Appeal, which reversed the trial court decision, declaring that a binding

agreement had been proved. The appellants obtained leave from the Supreme Court of Judicature of Jamaica to appeal to

the Queen in Council (i.e. the Privy Council). The Privy Council reversed the Appeal court's opinion, reinstating the

decision of Justice Curran in the very first trial and stating the reason for its action.

The Privy Council advised that no contract existed between the two parties. The first telegram was simply a request for

information, so at no stage did the defendant make a definite offer that could be accepted. Lord Morris gave the following

judgment. In the view their Lordships take of this case it becomes unnecessary to consider several of the defences put

forward on the part of the respondents, as their Lordships concur in the judgment of Mr. Justice Curran that there was no

concluded contract between the appellants and L. M. Facey to be collected from the aforesaid telegrams. The first telegram

asks two questions. The first question is as to the willingness of L. M. Facey to sell to the appellants; the second question

asks the lowest price, and the word “Telegraph” is in its collocation addressed to that second question only. L. M. Facey

replied to the second question only, and gives his lowest price. The third telegram from the appellants treats the answer of

L. M. Facey stating his lowest price as an unconditional offer to sell to them at the price named. Their Lordships cannot

treat the telegram from L. M. Facey as binding him in any respect, except to the extent it does by its terms, viz., the lowest

price. Everything else is left open, and the reply telegram from the appellants cannot be treated as an acceptance of an

offer to sell to them; it is an offer that required to be accepted by L. M. Facey. The contract could only be completed if L. M.

Facey had accepted the appellant's last telegram. It has been contended for the appellants that L. M. Facey's telegram

should be read as saying “yes” to the first question put in the appellants' telegram, but there is nothing to support that

contention. L. M. Facey's telegram gives a precise answer to a precise question, viz., the price. The contract must appear by

the telegrams, whereas the appellants are obliged to contend that an acceptance of the first question is to be implied. Their

Lordships are of opinion that the mere statement of the lowest price at which the vendor would sell contains no implied

contract to sell at that price to the persons making the inquiry. Their Lordships will therefore humbly advise Her Majesty

that the judgment of the Supreme Court should be upheld. The appellants must pay to the respondents the costs of the

appeal to the Supreme Court and of this appeal.

Questions:

1. After Reading above study identify what type of contract between two parties?

2. If there will be no valid contract between parties give the fact and judgement for the same?

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

Case -2 Carlill VS. Carbolic ball company 1893

Carlill v Carbolic Smoke Ball Company [1892] is an English contract law decision by the Court of Appeal, which held an

advertisement containing certain terms to get a reward constituted a binding unilateral offer that could be accepted by

anyone who performed its terms. It is notable for its curious subject matter and how the influential judges

(particularly Lindley and Bowen) developed the law in inventive ways. Carlill is frequently discussed as an introductory

contract case, and may often be the first legal case a law student studies in the law of contract.

The case concerned a flu remedy called the ‘carbolic smoke ball’. The manufacturer advertised that buyers who found it

did not work would be awarded £100, a considerable amount of money at the time. The company was found to have been

bound by its advertisement, which was construed as an offer which the buyer, by using the smoke ball, accepted, creating a

contract. The Court of Appeal held the essential elements of a contract were all present, including offer and

acceptance, consideration and an intention to create legal relations.

The Carbolic Smoke Ball Co. made a product called the "smoke ball" and claimed it to be a cure for influenza and a number

of other diseases. (The 1889–1890 flu pandemic was estimated to have killed 1 million people.) The smoke ball was a

rubber ball with a tube attached. It was filled with carbolic acid (or phenol). The tube would be inserted into a user's nose

and squeezed at the bottom to release the vapours. The nose would run, ostensibly flushing out viral infections.

The Company published advertisements in the Pall Mall Gazette and other newspapers on November 13, 1891, claiming

that it would pay £100 (equivalent to £11,000 in 2019) to anyone who got sick with influenza after using its product

according to the instructions provided with it.

£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic

influenza colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks, according

to the printed directions supplied with each ball.

£1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter.

During the last epidemic of influenza many thousand carbolic smoke balls were sold as preventives against this disease,

and in no ascertained case was the disease contracted by those using the carbolic smoke ball.

One carbolic smoke ball will last a family several months, making it the cheapest remedy in the world at the price, 10s. post

free. The ball can be refilled at a cost of 5s. Address: “Carbolic Smoke Ball Company”, 27, Princes Street, Hanover Square,

London.

Louisa Elizabeth Carlill saw the advertisement, bought one of the balls and used it three times daily for nearly two months

until she contracted the flu on 17 January 1892. She claimed £100 from the Carbolic Smoke Ball Company. They ignored

two letters from her husband, a solicitor. On a third request for her reward, they replied with an anonymous letter that if it

is used properly the company had complete confidence in the smoke ball's efficacy, but "to protect themselves against all

fraudulent claims", they would need her to come to their office to use the ball each day and be checked by the secretary.

Carlill brought a claim to court. The barristers representing her argued that the advertisement and her reliance on it was a

contract between the company and her, so the company ought to pay. The company argued it was not a serious contract.

Question :

1. Identify The fact And Judgement From Above Case Study?

2. Explain which characteristics of law of contract is applicable in this case law?

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

Case - 3 A - Bathroom city washed its hands of the problem

Simon Bell, of King’s Lynn, Norfolk, has been battling with Bathroom City, Birmingham, over a cracked bathroom unit for

six months after buying a shower tray, cabinet and basin in March. The delivery did not turn up for a month, despite a

promise that it would arrive within days. Mr. Bell, left, who is a former heating and plumbing engineer, says:

“When the delivery was made I inspected the goods and could see nothing wrong. But because the delivery was so late I

missed my opportunity to fit it immediately.”

It wasn’t until a couple of days later that he noticed a “hairline crack” on the basin when he took it out of the box. He sent a

photograph of the damage to Bathroom City, which said that there was nothing it could do because he had not reported it

within two days of delivery. The company also claimed that it did not look like a manufacturing fault but damage caused

when fitting the taps. However, Consumer Direct says that it is the duty of Bathroom City to prove that it was not

responsible; if it cannot, then the company owes Mr Bell a replacement or repair. Mr. Bell says:

“Bathroom City has refused to budge and my e-mails and letters have been ignored. I have fitted many bathroom suites

over the years and have never broken anything. What’s more, I know that it is impossible to inflict this type of damage

with modern taps.”

After being contacted by Times Money, Bathroom City offered to replace the basin as a goodwill gesture, but maintains

that it has “clear proof” that it did not damage the basin because “Mr. Bell clearly states that when it was delivered he

checked the goods over and found no initial fault”.

Questions :

1. Identify the elements of sale of goods.

2. Identify in which point the case supports or deviates the rules of sale of goods act.

Case - 3 B

The Alpha and Panic worker’s compensation statutes both provide for an award to the surviving spouse of an employee

who is killed on the job and neither statute requires a showing of negligence. The Alpha statute provides for an award

equal to three times the deceased employee’s annual salary, The Panic statute provides for an award of five times annual

salary. In both Alpha and Panic, worker’s compensation claims are heard by commissions that have authority to award

compensation only under the local statute, To the extent that it may be relevant, you may assume that the courts of Alpha

apply the Restatement Second of Conflicts, and the courts of Panic apply the first Restatement. Donna’s attorney has

contacted you because of your expertise in Conflict of Laws. He is smart enough to figure out that the Panic statute would

yield a higher award, but he is concerned because the Panic legislature recently enacted the following statute: Prohibition

of Same-Sex Marriage. Marriages between individuals of the same sex are contrary to public policy and shall be void in this

state. Alpha has no legislation on the subject of same-sex marriages, but the Alpha marriage statute, which has been on the

books since 1846, defines marriage as “the legal union of man and wife.

Questions :

Donna’s attorney is trying to decide whether to file Donna’s worker’s compensation claim in Alpha or Panic. Please advise

him.

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

Case - 4

ISSUE:

SOO Burgers is a prestigious brand in Australia which started a promotional campaign called the “the Fair Dinkum Deal”

and it ascertained that a token has been stuck to each wrapper of the double Decker type of EMU burger. If the customer is

able to assimilate 50 such tickets, they can approach headquarter of the chain to obtain the golden ticket. It also stated that

on scratching of the golden ticket collected, the customers can win a brand-new model of Mazda CX 9.

There were peculiarities arose with respect to the case, especially considering the standpoint of Brett. Brett on getting to

learn about the idea accurately assumed that many customers will not be inspired to a sufficient degree to collect the

ticket. Hence many of the tokens will be disposed of. Brett thus scoured waste bins to gather the tickets disposed of by the

other consumers. In this manner, Brett was able to collect 100 tokens which he took to the headquarters. He found two

golden tickets for the 100 tokens which he took the head office. There while waiting in the reception, an employee of the

company came out and posted a message which stated that the company was sorry for some printing mistake with respect

to the golden tickets. This thus apparently invalidated his attempts to obtain a brand-new car (Birt et al. 2019).

In the second instance, Mickey was sick and admitted in the hospital due to the consumption of 50 burgers to obtain the

tokens attached with them. Mickey got to know from the discussions of the nurses at the hospital that the promotional

offer had got cancelled. Mickey scratched his ticket and found the image of a car and he approached the company SOO

Burgers for obtaining the promised product. The company now wants to understand whether the claims made by Mickey

and Brett are legal or not.

RULES:

The Australian Contract Law ascertains and confirms legal enforcement of promises which are made as part of a bargain

and the parties can enter into a contract freely, forming a legal relationship (). The laws which comprise of the different

types of regulations and rules which are essential for enforcing the conditions with respect to the promises made (Acc.com

2019). In such cases, the salient components of Agreements and resultant Consideration are also considered while

assessing the promises and breach of contracts made by the company. The case study can thus be adjudged based on the

above perspectives. Also, the Anticipatory and Discharge of breaches will aid in understanding whether the claims made

by the customers are valid or not.

ASSUMPTIONS:

Agreement is mutual obligations enforceable by law and elements of contract are the valid offer, adequate consideration

and acceptance (Buscombe 2018). SOO Burgers in the contract made a valid Offer and an Acceptance in which a resilient

and coherent point was reached by both the parties involved. An offer made by a party is a type of communication in

which the party claims to provide something in return in light of the fact that the other party involved fulfils certain

defined terms and conditions. In this case, it has been seen that the SOO Burger made a valid offer to provide the winner of

a golden ticket with a new car provided that the golden ticket on stretching revealed a car. This is a strong case of the

offered promise made by the company to customers who had 50 tokens and a golden ticket with the car. Up till this point,

it can be argued that the case was in favour of Mickey and Brett.

However, a closer assessment reveals that the case is vastly different under some consideration especially compared with

the points of Revocation and Rejection (Howells and Ramsay 2018). While Brett was waiting in the reception for

confirmation the company revoked the offer stating a printing error. The offer was cancelled then and there but Brett can

claim the car to the company as the act of revocation is provided strength by the fact of Rejection, thus effectively

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

eliminating any possibilities of bounding back. Hence it can be seen that since the company has revoked and rejected any

claims, there is very little space for Brett to claim his prize. Also, any revocation made known to the public in a direct or

indirect manner is valid thus making the case even stronger in favour of the company.

Alternately, it can be seen that Mickey on account of being hospitalised claimed no knowledge about the revocation and

approached the company. But since the company has already communicated to the media and general public about the

offer revoked the company is no longer liable to adhere to the claim made by Mickey. They can reject the offer made on

solid grounds that the message was already communicated through valid channels.

There is a minor discrepancy in which Brett met a consumer who had got the car from the company after the notice was

put up. This can be termed as an Actual or Anticipatory breach where the company fulfilled the expectations of one claimer

but refuted the claims made by another. But even then, the claim is weak since the previous person completed a major part

of the procedure before the notice was put up. Hence, claiming the car us nit actually in favour of either of them.

Questions:

1. The Company is not liable to abide by the claim made by customer Brett and Mickey why? Explain with content

the Issue, Fact, and Judgement of the case.

2. What do you mean by anticipatory breach? And in which part of case study this term is used.

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

Case - 5

ISSUE:

The case here involves an employee Sarah operating as the Managing Director of the company for the period of 2 years.

The company Sparkling Pty Ltd has been operating in the vicinity of Tasmania and as per the ASIC. Though officially Sarah

has been logged off, she has been operating as managing director for a sufficient amount of time. There was a clearly

defined contract which stated that Sarah could not execute any transactions on behalf of the company and the company

itself was not allowed to borrow an amount higher than the value of 20,000 dollars. The contract additionally stated that

any transactions would require abject permission from the board of directors belonging to the company. Sarah conducted

the activities of transactions despite having sufficient knowledge about the contract as well as knowledge regarding the

lack of rights provided to her by the company. In the date of December 20th, Sarah went ahead and asked for a loan

of 30,000 for the company is well aware of the restrictions in the aforementioned contract. It can, however, be seen that

the bank had no information regarding the rights of Sarah or the contract of the company. The bank has thus now asked

the Sparkling Company to compensate the loan along with the interest generated over time. Thus, the case discusses

whether the company is obliged to pay the bank the dues in light of the several facts brought to the forefront.

RULES:

As per the Corporation Act formulated in the year of 2001 and also as per the rules stated in the ASIC various divergent

provisions which include the governance and operations of corporate organisations as well as takeovers, buyouts, funds

raising, and financial reporting are considered. In this case, it may be seen that the employee was logged off during the

transaction executed. Thus, as per the ASIC, it is entrusted with the responsibility of protecting the regime of the

concerned investor and also diverse related financial services, for instance, licensing, disclosing of the provisions and the

conduct associated with it (Legislation.gov.au 2019).

ASSUMPTIONS:

As per the laws defined and specific assumptions, there is very little possibility regarding the positive outcome of this case.

Sarah as per the rules of the company was not allowed to execute any transaction without the permission of higher

authorities. Also, an amount greater than 20,000 could not be withdrawn. Sarah did not inform the company and the bank

withdrawing a higher amount of 30,000 dollars. The bank under such a circumstance can easily file a case against the

company stating that they were not aware of the rule soft the contract with respect to Sarah and had no information about

the return logged (Stewart et al. 2018). The bank has a solid rationale for filing a case against the company.

According to the scenario, the outcome would have been decidedly positive if Sarah had informed the higher management

about the transactions. The higher management would have communicated with the bank regarding the contracts existing

in their relationship with Sarah and also about the statements in the return logged. The board is aware of the contract

would have devised a way to repay for the orders (Bennett 2018). The process in this matter would have been more

ethical, authentic eliminating any possible potential for conflicts at a later stage (Bornstein 2019). If Sarah had informed

the bank about the defined policies the institution would have formulated a method for cancelling the orders and the loan.

According to the defined case, it has been clearly enunciated that the loan was taken for the refurbishments and

renovations of the shops. Suing and filing for the case will not find grounds since the bank was not knowledgeable of the

various terms and conditions affiliated with the contract (Barrymore and Ballard 2019). The bank without possessing

sufficient knowledge tendered the loan. The important and relevant information has been suppressed by the employee of

the company.

The Indian Institute of Business Management & Studies

Subject: Business Law Marks: 100

It is no concern of the bank that Sarah was not well-liked among the higher officials and that she was looking for a new job.

The bank is not concerned with the fact that the company has rejected Sarah or was not paying the funds intentionally.

Thus, once the loan has been tendered by the bank there does not exist an iota of consideration for Sparkling. The

company is liable to pay the loan back or even the bank can ask for the compensation from Sarah herself. According to

the Corporation Act of 2001, the company is supposed to pay the loan back with interest to the bank (Buscombe 2018).

Questions:

1. State the terms and conditions of the contract regarding employees of sparkling Pvt Ltd.

2. Why company is legally obliged to pay back the loan taken by Sarah on behalf of the company?