LAW504 - Business and Corporations Law
Session 1 2016
Faculty of Business
School of Accounting and Finance Internal Mode
Subject Overview
This subject examines key Australian legal concepts and issues directly relevant to business operations. It covers the structure of the Australian legal system, sources of law, statutory interpretation, the court system and the doctrine of precedent. It then examines substantive areas of tort, contract, agency, and the difference between various types of business organisations before focusing on corporations law, including the way in which corporations are formed, rules regulating internal relationships within corporations, relationships with outsiders, the duties of directors and other officers, fundraising and the termination of corporations, with a particular focus on liquidation.
Learning outcomes
On successful completion of this subject, you should
be able to describe the Australian and other legal systems, explain which court has jurisdiction in any particular matter and apply the doctrine of precedent; be able to demonstrate a capacity to engage in legal research; be able to understand, explain and apply the rules of statutory interpretation; be able to understand and explain the law relating to torts, contracts, property and corporations law; be able to identify the legal issues arising out of novel factual situations, to analyse the applicable law and to differentiate between which rules are applicable and which are not and then apply the law to the problem; be able to explain and summarise the applicable law in such a way as to create a report which states what liabilities arise from novel factual situations.
Lecturer Details
Subject Coordinator Sajjad Khan Email [email protected] Phone To be advised.
Contact phone number 03 99357927
Campus Other
Building/Room number To be advised.
About your lecturer
Rebecca Neophitou, LL.B, LL.M

I have graduated with a Bachelor & Master of Law from Monash University. I also hold a graduate a Graduate Diploma in Education. I have over 15 years experience in teaching Business and Company Law from various Australian Universities.
Learning, Teaching and Support Strategies
Class times and location
Please refer to the most updated timetable for the class times and location.
You would have received your timetable by email. You can also obtain a copy from the timetable stand outside the academic office or via the noticeboard. You can also obtain a current copy from the link below: https://csutimetable.au.studygroup.com/Melbourne
Important: It is essential that you keep checking the timetable for the latest class information. The timetable may change until the second week of the teaching session, and it is important to monitor the timetable regularly on the noticeboard.
The weekly instruction in this subject will consist of a combined lecture /tutorial lasting up to 3 hours which will occur every week. This will cover the main points from each topic.
Attendance is required at all scheduled lectures and tutorials.

How to contact your lecturer
Any questions concerning the teaching of this subject can be addressed to your subject lecturer.
Rebecca Neophitou
Email:[email protected]
Email is the best option. Please send a brief message regarding the issue and include the subject name and code in your email ? it really helps to know which class you belong to, before I respond to your query. If you prefer to phone me that is fine, but please leave a message if I am not there at the time ? I will give you a call back as soon as I can.
How you are expected to engage with the subject
The learning materials for this subject are available in online Modules accessed through the subject's Interact2 site. You should check the Interact2 Site at least weekly for postings, announcements, lecture information and other resources that will assist your studies or additional information and resources vital to your success in the subject. I will put items of interest from the media in the resources folder from time to time when matters relating to corporations law are reported. I will also provide opportunities for synchronous communication with me via chat and / or On-Line Meetings. Details will be provided early in the Session.
The best way to proceed with this subject is to read the material and watch the videos contained in the Modules (listed in a column on the left-hand side of the Interact2 home page for the subject), and then to read the relevant pages in the textbook which are given at the start of each Module. A vital part of your engagement with the subject are the problem-type questions which appear at the end of each module.
In In this subject there are many opportunities for you to engage with myself, with other students and with the subject. I will be holding weekly face to face classes throughout the session where we can discuss content issues and assessment items.
Successful study is directly linked to your early engagement with the subject, Assessment item 1 have been designed to identify students at risk. I will be using your participation in this assessment task to review your level of engagement. If you experience difficulties engaging with the subject at any time, but particularly during the first 3 weeks of session, please do not hesitate to contact me and discuss the difficulties you are experiencing.
Studying at university does not mean studying alone. Take advantage of collective wisdom and post your questions to the subject Discussion Board.
Information on effective time management is available on the CSU Learning Support website via the following link: http://student.csu.edu.au/
Visit the Learning Support website for advice about assignment preparation, academic reading and note taking, referencing and effective time management at: student.csu.edu.au
You can also contact an adviser through Student Central on the following number:
1800 275 278 (or +61 2 6933 7507 ( http://interact.csu.edu.au/sakai-msi-tool/content/templates/edit.htm from outside Australia).
Queries regarding the content of this subject should be directed to your Subject Coordinator.
Library Services
The CSU Library website provides access to online material and print, using Primo Search to find online journal articles, eBooks, hardcopy books from CSU Library (see Library Manager for Interlibrary Loan Requests), company & government reports, eJournals, dissertations, theses, newspapers including Business & Financial newspapers in Factiva (See Business & IT Journal
Databases), and other reference resources (eg. Australian Bureau of Statistics, Australian standards, online encyclopaedias & dictionaries to be read on the computer). You will also find library guides, Subject Reserve for any readings eg. ITC100, ACC100, etc., and online assistance to help you use the Library's resources such as Ask a Librarian – Live Chat and Ask a Librarian - Web Form.
You can find Library Services on both the SGA library online catalogue: http://primo.unilinc.edu.au/primo_library/libweb/action/search.do?vid=SGA
The SGA library online catalogue allows students to Sign In, My Account shows student's current library record including all books on loan, Renew your borrowed books online before the due date, also Search and Request all books in the SGA library, even if unavailable due to high demand from students. Students can Request books when all books are on loan to other students. When the requested book is returned to the SGA library, the student who requested the book receives an email immediately to pick up the book from the SGA library. View your library record online 24/7 at the above web link for SGA library.
And also CSU Library online: http://student.csu.edu.au/library - CSU Library Services including Primo Search & Subject Reserve online with 24/7 access, online and video tutorials in research skills, finding journal articles for assignments, topic analysis, download Endnote referencing program and many other online library services to help you successfully complete your assignments for all CSU courses.
http://trove.nla.gov.au/ - Powerful search engine from National Library of Australia to access many different online resources on any subject from one search.
Contact Details for renewing loans, locating books and other information:
SGA Melbourne Library:
Marian Lees - Director, Library Services
Ph: (03) 9935 7921
Email: [email protected]
Library Help
http://student.csu.edu.au/library/help-contacts Friendly and quick assistance is available. Ask for help finding information and navigating the library's extensive eResources.
Online Tutorials http://student.csu.edu.au/library/study-research/training-tutorials-videos
Learn how to:
• use Primo Search to find eReserve material and journal articles
• search journal databases and web resources for information for your assessments
• identify appropriate sources of information and peer reviewed material, and evaluate resources.
Bookmark your Subject Library Resource Guide
Subject Library Guides are a great way to get started with research. Each online guide is tailored to a specific area of study, including Accounting, Business & Information Technology outlining how to research in your area and where to look for information. http://libguides.csu.edu.au/
Academic Learning Support Assistance
Visit the learning support website for advice about assignment preparation, academic reading and note-taking, referencing, and preparing for exams at: http://student.csu.edu.au/study
You may also contact:
Name: Monique Moloney
Email: [email protected] Phone: (03) 9935 7919
For appointments, please see Reception.
Queries regarding the content of this subject should be directed to your subject lecturer.

Your workload in this subject
Each week you should spend around 9 - 11 hours studying this subject – obviously some weeks may require more time than other depending on how you work – but the following is a guide for your information:
Reading Modules: 4 hours
Preparing answer to problem question at the end of the Module(s) for the week: 2 hours participation of face to face classes: 3 hours
Preparation of up-coming assessment items: 2 hours
The total time that you would spend during the Session would be between 140 and 160 hours.
Text and Learning Materials
Prescribed text(s)
There is no prescribed text for this subject - all the learning materials you need are contained in the on-line Modules.
You will need to refer to two Acts of Parliament, namely:
Partnership Act 1892 (NSW)
Corporations Act 2001 (Cth)
These are accessible at www.austlii.edu.au (http://www.austlii.edu.au/)
Schedule
Schedule

Learning Activities – please note the learning activities associated with each module, listed in the following schedule, comprise:
1 . Reviewing the following :
- The notes in Interact Modules.
- The Module video (if there is one), noting there are links to these in a separate list of videos under the 'Resources' tag.
2 . Completing the following :
- Attempting problem questions at the end of each Module and posting answers on the forum. In doing this, I would encourage you to work collaboratively, so as to maximise the learning experience.
- Commenting on answers posted on the forums.

Assessment Information
Introduction to assessment
To protect the academic integrity of the subject, you may be asked to complete an additional test ( which may be verbal) if I or another member of the teaching staff have doubts that the work that you have submitted for an assessment item is your own. This test would be held within 4 weeks of the submission of the assessment.
Detailed information regarding:
Sample exam (for subjects with a formal exam)
Pass requirements
Grades
Presentation
Submissions
Extensions
Penalties for late submission
Assignment return
Resubmission Plagiarism
are included in Appendix 1.

* due date is the last date for assessment items to be received at the University
** applies only to assessment items submitted by the due date
Assessment item 1
Multiple choice test
Value: 10 %
Due date: 14- Mar -2016
Return date: 07- Apr -2016
Submission method options Interact2 Test
Task
You must complete an on-line test which covers Modules 1 and 2. You must complete ten multiple choice questions online within 30 minutes using the Test feature on Interact2, between 00:01 on Monday 14 March 2016 and 23.59 on Sunday 20 March 2016 AEST. Rationale
This test is designed to assess your understanding of the concepts contained in the first Topic, specifically:

• your knowledge of the Australian legal system
• the rules of law relating to the rules governing the jurisdiction of courts
• the doctrine of precedent
• your understanding of the rules of statutory interpretation

and to gauge your engagement with the subject.
Marking criteria
You will be awarded 1 mark for each correct answer. Negative marking does not apply (ie you do no lose marks for an incorrect answer). The following is the marking criteria for this test:

CRITERIA HD DI CR PS FL
Students will be To meet this To meet this level To meet this level To meet this level At this level you required to: level you will you will attain a you will attain a you will attain a will attain a answer theory and attain a cumulative mark cumulative mark cumulative mark cumulative mark practical based cumulative mark between 75 and between 65 and between 50 and between multiple choice between 85 and 84%. A mark in 74%. A mark in 64%. A mark in 0-49 %. A mark questions by 100%. A mark in this range) this range this range indicates in this range selecting the best this range indicates you indicates you you have indicates you option from five indicates you have have demonstrated a have not
available choices have demonstrated a demonstrated a basic knowledge demonstrated a
to demonstrate demonstrated an comprehensive sound knowledge and understanding basic knowledge their exceptional and a and high level of and of the concepts. and understanding of high level of knowledge and understanding of understanding of basic legal knowledge and understanding of the concepts. the concepts. concepts . understanding of the concepts. the concepts.
Requirements
You must access Interact and complete the test at any time between 00:01 on Monday 14 March and 23.59 on Sunday 20 March AESTEST.

You have 30 minutes to complete the test.

You must do the test in one sitting - you cannot log off and log on again.

A student guide that covers minimum requirements for the use of on-line tests is located at http://www.csu.edu.au/division/landt/interact/help/documents/Test-Centre-For-Students.pdf Online risks: Please note that whenever you work in a live online environment there are risks of system failure (internet connections, logging out, user problems etc.). When doing work online this means there is always a risk of losing all your work in the event of a system failure. CSU systems provide a very secure online environment. In addition, the Test feature has been designed to minimize risks associated with being online but you do need to take all precautions to ensure a successful online assessment experience:

familiarise yourself with the Test feature prior to completing any major assessment task read your subject outline and test instructions carefully keep the security window open when doing a test. Close the window when you have completed the test to ensure your personal security within the CSU online system make sure you SUBMIT your completed test within the specified time on limited time tests.

Assessment item 2
Problem question
Value: 10 %
Due date: 28- Mar -2016
Return date: 19- Apr -2016
Length: 1000 words
Submission method options Alternative submission method
Task
You must use the ILAC format when writing your answers.

**In this subject, assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format, NOT as a PDF document. If you submit in PDF it will not be able to be marked.**

***If you anticipate the need to apply for an extension, please read the rules on extensions in this Subject Outline before doing so.***

ASSIGNMENT 1 (10 marks)

Peter owns a construction business. He needs a truck to transport building materials. Each truck he uses earns him profit of $ 10 000 per week. Peter contacts Wendy, who owns a fleet of trucks. They have several telephone discussions about a Mercedes Benz 5000 truck that Peter is interested in buying. During one of these discussions, Peter asks Wendy whether the truck has a heavy duty suspension, explaining that he needs to transport bags of concrete to construction projects in rural areas. Wendy says that it does, without checking its specifications. Peter posts Wendy a letter containing a contract in which he offers to buy the truck for $ 300 000. The contract reaches Wendy on 5 November. She signs the contract at the space indicated for acceptance, and puts the acceptance into the post on 7 November. On 8 November, Peter phones Wendy and says "I haven't heard from you and I've had second thoughts, so I am revoking my offer to buy the truck". Wendy says "Too late, I'm delivering it today". Later that day, she delivers the truck to Peter's premises. Peter notices that the truck does not have heavy-duty suspension, and refuses to pay for it. Wendy's letter of acceptance reaches Peter only on 10 November. Wendy has now sued Peter for $ 300 000. Because it is a busy time of year for the trucking industry, it takes Peter two weeks to find another truck to use for his business. Advise Peter as to his legal position, examining all relevant legal issues that could arise from these facts.
**Please check that you have complied with the rules contained in the Style Guide before you submit your assignment.**
Rationale
This assessment item will allow you to demonstrate your ability to

engage in legal research; identify the legal issues arising out of novel factual situations, to analyse the applicable law and to differentiate between which rules are applicable and which are not and then apply the law to the problem;
explain and summarise the applicable law in such a way as to create a report for a client which states what liabilities arise from novel factual situations

And more specifically

your knowledge of the law of contract formation and the law relating to factors affecting the validity of agreement your ability to undertake an assessment task relevant to the workplace and professional practice.
Marking criteria

CRITERIA HD DI CR P FL
Students are To meet this level To meet this To meet this To meet this level you At this level you will required to you will achieve a level you will level you will will achieve a obtain a mark of answer two cumulative mark achieve a achieve a cumulative mark of 0-49 %. A mark in problem type of 85-100%. A cumulative cumulative mark 50-64%. A mark in this range indicates questions in mark in this range mark of of 65-74%. A this range indicates that a student: order to indicates that a 75-84%. A mark in this that a student:
demonstrate: student: mark in this range indicates
range indicates that a student:
that a student:
Comprehensive Correctly Identifies and Identifies some legal Identifies no relevant Identification coverage and identifies legal correctly issues. May or may issues or only a few of relevant identification of all issues and formulates most not formulate them of them. Some of legal issues legal issues, which formulates major legal correctly. Considers these may be are formulated them with issues connected links to relevant law. unclearly with consideration consideration to relevant law. formulated. Considers of all contextual of contextual few contextual
factors . factors factors of relevant connected to law.
relevant law, with only minor errors.
Explanation Provides a Provides a Provides a Provides a basic Provides incorrect or of law and complete comprehensive substantial explanation of the limited explanation of citation of explanation of the explanation of explanation of law, but with the law using no, or relevant law, justified by the law with the law but with significant errors, only a limited range legal relevant statute few errors, some errors, substantiated by some of, authority. authority and case law substantiated substantiated by legal authority.
authority, with no by relevant significant legal errors. Discussion case and authority in the identifies key rules statute law form of statute
of law, stating stating and case law.
relevant principles relevant and shows insight principles.. in identification Research of and discussion of relevant legal potentially hidden authority issues. Research of shows a relevant legal breadth of authority shows a investigation
breadth of through investigation detailed through detailed analysis and analysis and discussion.. discussion.
Application Applies the law to Applies the Applies the law Makes a basic attempt Paper does not of legal the facts so as to law correctly correctly to most to apply the law to the correctly apply law to principles to reach a correct to the facts so issues arising facts, but applies the facts and / or the facts conclusion on all as to address from the facts, wrong law and / or applies incorrect issues, with no all issues, with but with some contains significant law. May be errors. Argument only minor errors. Argument errors in the descriptive, rather discusses linkages errors. discusses application. Argumentthan putting forward
between facts and Argument application of summarises a reasoned argument.
the law and discusses the application of the
considers linkages law. Conclusion law. Advice to client counter-arguments, between facts summarises is incomplete. evaluating the and the law, advice for client.
impacts of evaluating the
applying the law to impacts of the situation applying the considering a law to the broad range of situation factors that may considering affect the factors that

application. may affect the Conclusion draws application. together advice for Conclusion
client. draws together
advice for client
Compliance Uses Style Guide Uses Style Adequate use of Limited or Poor, inconsistent or with the comprehensively, Guide Style Guide, inconsistent use of inaccurate use of Style Guide accurately and accurately and with some errors Style Guide. Some Style Guide. Poorly and overall consistently. Uses with only or lapses. Uses attempt at use of structured. Inadequate structure. ILAC model. minimal ILAC model and ILAC model and at or no use of
Extremely well errors. is clearly structuring of answer. paragraphs. May have structured and Uses ILAC structured. disregarded the ILAC organised, with model. Well model. one main argument structured, introduced per with one main paragraph, argument
supported by introduced per well-written paragraph.
supporting sentences.
Written Uses appropriate Uses Uses appropriate Significant spelling, Poor grammar, expression academic writing appropriate academic grammar and spelling and/ or
and editing. which is formal, academic writing which is punctuation errors but punctuation. Paper impersonal and writing which formal and the paper is readable gives no evidence of which contains no is formal, and impersonal, with and demonstrates having been spelling, grammar impersonal a few spelling, some attempt at proof-read. and punctuation with only very grammar and proofreading. errors. Paper minor punctuation demonstrates spelling, errors. Paper careful grammar and demonstrates proofreading. punctuation evidence of errors. Paper proofreading.
demonstrates careful proofreading.

Presentation

Please comply with the following Style Guide:

1. Do not re-state the question.

2. Use in-text referencing. Do not use footnotes.

3. Names of statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901 (Cth). Note the abbreviation for 'Commonwealth' is 'Cth' not 'Cwlth'.

4. The names of the parties must be italicised, but the citation must not, for example: Smith v Jones (1967) 345 CLR 34.

5. An in-text reference to a book should be structured as follows: (Latimer, 2010, p. 75). There is no need to put the author's initial. Note the positioning of brackets, stops and commas. You use 'pp.' only if referring to more than one page. If you are referring to a book with more than one author, the in-text reference would be as follows: (Smith et al, 2002, p. 78).

6. An in-text reference to the subject's Modules should be structured in brackets as per the following example - obviously you will alter the reference depending on the subject, year of study and Module number : (CSU LAW220 Modules, 2015, Topic 7).

7. Do not start a new line simply because you are starting a new sentence.

8. Be careful of apostrophes: director's = of a director, directors' = of many directors, directors = many directors. Also particularly prevalent is confusion between its (it possessive) and it's (contraction of -it is-).

9. The following words always start with a capital letter: Commonwealth, State, Act, Bill, Regulation, Constitution, Parliament. Do not unnecessarily capitalise other words.

10. One should not use terms such as can't, won't, don't and shouldn't, neither should one use -ie- and -eg- in formal writing.

11. A sentence must always begin with a full word and a capital letter – so a sentence would start
'Section 55 says…', not 'S 55 says…' or 's 55 says…'. The abbreviation for 'section' in the middle of a sentence is 's'.

12. Start each paragraph on a new line, and leave a clear line gap after the preceding paragraph.

13. You must put page numbers on your assignment.

14. Quotations and excerpts from legislation should be indented from the rest of the text in a separate paragraph. The text in quotations should not be in italics.

15. You must end your assignment with a bibliography that is divided into three separate parts, listing statutes, cases and books / articles / on-line Modules.

16. A listing of a book in a bibliography should appear in accordance with the following format: Latimer, P (2010). Australian Business Law, 29th ed, North Ryde: CCH. If listing a book with multiple authors, do so as follows: Heilbron, G, Latimer, P, Nielsen, J and Pagone, T (2008). Introducing the Law, 7th ed, North Ryde: CCH.

17. When listing statutes at the end of your assignment you should conform to the format: Acts Interpretation Act 1901 (Cth). List the statute only once – you do NOT list individual section numbers relied on. You should not list textbooks as the source of Acts – the Act itself is its own source.

18. When listing cases conform to the format: Gordon v Richards (1976) 123 CLR 32.

19. When listing article conform to the format: Jones, J 'The new analysis of law' (2010) 4 Journal of Recent Law 34.

20. When listing CSU Modules conform to the following format: CSU LAW220 Modules.

21. Make sure that your sentences are grammatical – it may be useful to read your assignment out loud if you have any doubts about this.

PLEASE NOTE THAT YOU WILL LOSE MARKS IF YOU DO NOT COMPLY WITH THIS
STYLE GUIDE. I WILL REFERENCE NON-COMPLIANCE BY ANNOTATING YOUR
ASSIGNMENT "2", "5" ETC TO INDICATE WHICH OF THE ABOVE RULES NUMBERED 1 – 21 YOU HAVE BREACHED

Assessment item 3
Problem questions
Value: 20 %
Due date: 02- May -2016
Return date: 24- May -2016
Length: 2500 words
Submission method options Alternative submission method
Task
Please note that the word limit of 2 500 words is a total for both questions (ie, it is not 2 500 words for each question). I would however expect that students should be able to answer both questions in far less than 2 000 words. Your bibliography is not included in the word limit.

You must use the ILAC format when answering these questions.

**In this subject, assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format, NOT as a PDF document. If you submit in PDF it will not be able to be marked.**

***If you anticipate applying for an extension for this assignment, please read the rules on extensions in this Subject Outline before doing so.***

Question 1 [10 marks]

United Surveyors is the name of a road surveying firm which undertakes contracts for the Albury City Roads Department. Smith, Jones and Peters have been partners in the firm for some time. There is an agreement between them limiting the authority of the partners to contracts up to $ 5 000. Smith regularly deals with Mary Bradshaw, manager of Capital Engineering Supplies. On numerous occasions Smith has purchased surveying supplies from Mary, who is aware of the type of work United Surveyors does. Smith buys a surveying instrument costing $ 6 000 from Mary. He has always wanted the firm to branch into oil exploration, as he is also a qualified mining engineer, but his partners have continually rejected such a move. Hoping to persuade them of the rewarding nature of such work, Smith decides to drill some test wells on a property that the firm owns, and to that end places an order for a $ 3 000 mini oil-driller with Mary. Jones and Peters have told Mary that she will not be paid for either purchase. Advise Mary as to her legal position, citing relevant statute law.

Question 2 [10 marks]

Steve Jones is an entrepreneur with a variety of business interests. He learned of a gold deposit in Western Australia. Because he was anxious to exploit the opportunity, he decided to form a company, to be named WA Gold Exploration Ltd. He flew to Perth and on 6 July placed an order for a drilling machine from Thor Mining Machinery Ltd, to be used to drill a test shaft. The contract specified that the drill would be delivered, and payment of the $ 125 000 price would fall due, on 30 July. He signed the order for the drill as follows:

Steve Jones, on behalf of WA Gold Exploration Ltd.

WA Gold Exploration Ltd was registered as a company by ASIC on 10 July, with Steve as 90% shareholder. He and the other shareholders met on 11 July, to elect a board of five directors. Steve himself was not elected to the board, because although he had originally discovered the opportunity, he had no experience in mining operations, and so did not want to be involved in day to day running of the company.

On 14 July, the board signed a contract for a fleet of five ore trucks with Volvo Trucks (Australia) Ltd, costing a total of $ 500 000, to be delivered on 30 September. The board also established a sub-committee to determine the company's technical needs, and on 25 July the board accepted the committee's recommendation that the company not buy the
$ 125 000 drill from Thor Mining machinery Ltd and should instead buy one from United Mining Machinery Ltd for $ 90 000. The board then contacted Thor Mining Machinery Ltd and told it that it would not be taking delivery of the drill or paying for it. Unfortunately, in mid-September it became clear that the gold deposit was not as large as hoped, and the board ceased trading on the basis that the

company had only $ 400 000 in assets and had accumulated $ 2 million in liabilities. The company is therefore unable to pay for the trucks.

Steve, who has personal assets of $ 1 million, has now been sued for breach of contract by both Thor Mining Machinery Ltd and Volvo Trucks (Australia) Ltd. Assume you are his legal advisor. Prepare advice for him citing full legal authority, as to what his legal position is.

**Please check that your assignment complies with the rules in the Style Guide before you hand it in.**
Rationale
This assessment will allow you to demonstrate your ability to:
engage in legal research; identify the legal issues arising out of novel factual situations, to analyse the applicable law and to differentiate between which rules are applicable and which are not and then apply the law to the problem;
to explain and summarise the applicable law in such a way as to create a report for a client which states what liabilities arise from novel factual situations

And more specifically:
your knowledge of the law of agency and the law relating to the incorporation of companies and the separate legal identity of corporations your ability to undertake an assessment task relevant to the workplace and professional practice.
Marking criteria

CRITERIA HD DI CR P FL
Students are To meet this level To meet this To meet this To meet this level you At this level you will required to you will achieve a level you will level you will will achieve a obtain a mark of answer two cumulative mark achieve a achieve a cumulative mark of 0-49 %. A mark in problem type of 85-100%. A cumulative cumulative mark 50-64%. A mark in this range indicates questions in mark in this range mark of of 65-74%. A this range indicates that a student: order to indicates that a 75-84%. A mark in this that a student:
demonstrate: student: mark in this range indicates
range indicates that a student:
that a student:
Comprehensive Correctly Identifies and Identifies some legal Identifies no relevant Identification coverage and identifies legal correctly issues. May or may issues or only a few of relevant identification of all issues and formulates most not formulate them of them. Some of legal issues legal issues, which formulates major legal correctly. Considers these may be are formulated them with issues connected links to relevant law. unclearly with consideration consideration to relevant law. formulated. Considers of all contextual of contextual few contextual
factors . factors factors of relevant connected to law.
relevant law, with only minor errors.
Explanation Provides a Provides a Provides a Provides a basic Provides incorrect or of law and complete comprehensive substantial explanation of the limited explanation of citation of explanation of the explanation of explanation of law, but with the law using no, or relevant law, justified by the law with the law but with significant errors, only a limited range legal relevant statute few errors, some errors, substantiated by some of, authority. authority and case law substantiated substantiated by legal authority.
authority, with no by relevant significant legal
errors. Discussion case and identifies key rules statute law of law, stating stating authority in the relevant principles relevant form of statute and shows insight principles.. and case law.
in identification Research of and discussion of relevant legal potentially hidden authority issues. Research of shows a relevant legal breadth of authority shows a investigation
breadth of through investigation detailed through detailed analysis and analysis and discussion.. discussion.
Application Applies the law to Applies the Applies the law Makes a basic attempt Paper does not of legal the facts so as to law correctly correctly to most to apply the law to the correctly apply law to principles to reach a correct to the facts so issues arising facts, but applies the facts and / or the facts conclusion on all as to address from the facts, wrong law and / or applies incorrect issues, with no all issues, with but with some contains significant law. May be errors. Argument only minor errors. Argumenterrors in the descriptive, rather discusses linkages errors. discusses application. Argument than putting forward
between facts and Argument application of summarises a reasoned argument.
the law and discusses the application of the
considers linkages law. Conclusion law. Advice to client counter-arguments, between facts summarises is incomplete.
evaluating the and the law, advice for client.
impacts of evaluating the
applying the law to impacts of the situation applying the considering a law to the broad range of situation factors that may considering affect the factors that application. may affect the Conclusion draws application. together advice for Conclusion
client. draws together
advice for client
Compliance Uses Style Guide Uses Style Adequate use of Limited or Poor, inconsistent or with the comprehensively, Guide Style Guide, inconsistent use of inaccurate use of Style Guide accurately and accurately and with some errors Style Guide. Some Style Guide. Poorly and overall consistently. Uses with only or lapses. Uses attempt at use of structured. Inadequate structure. ILAC model. minimal ILAC model and ILAC model and at or no use of
Extremely well errors. is clearly structuring of answer. paragraphs. May have structured and Uses ILAC structured. disregarded the ILAC organised, with model. Well model. one main argument structured,
introduced per with one main paragraph, argument
supported by introduced per well-written paragraph. supporting sentences.
Written Uses appropriate Uses Uses appropriate Significant spelling, Poor grammar, expression academic writing appropriate academic grammar and spelling and/ or
and editing. which is formal, academic writing which is punctuation errors but punctuation. Paper impersonal and writing which formal and the paper is readable gives no evidence of which contains no is formal, and impersonal, with and demonstrates having been spelling, grammar impersonal a few spelling, some attempt at proof-read.
and punctuation with only very grammar and proofreading. errors. Paper minor punctuation spelling, errors. Paper grammar and demonstrates

Presentation
Please comply with the Style Guide which appears after Assessment item 2.
Assessment item 4
Final Exam
Value: 60 %
Date: To be advised
Duration: 3 hours
Submission method options
N/A - submission not required/applicable
Rationale
The purpose of the final examination is to assess you on all the learning outcomes of the subject.
Requirements
Type:

Open book exam: Students may take into the examination room any written materials they like, including textbooks, the Study Guide, hand written and / or typed notes. Computers may not be taken into the exam room.

Examination format

The examination paper in this subject will consist of three parts:

Part A has 15 multiple choice questions. Students must attempt all of these questions. Each question is worth 1 mark.

Part B has 5 short answer questions. Students must attempt all of these questions. Each question is worth 3 marks.

Part C has 5 problem questions. Students must attempt 3 of these questions. Each question is worth 10 marks.

There is a sample exam in this Subject Outline which contains examples of the type of questions that may be in the exam, along with answers to them, which you can use as a revision aid. In addition, your lecturer will put revision information in the Resources file on the subject Interact2 site towards

the end of the Session.
Marking criteria

Multiple choice questions will be marked in accordance with the following criteria:

CRITERIA HD DI CR PS

FL
Students will be To meet this To meet this level To meet this levelTo meet this level At this level you required to: level you will you will attain a you will attain a you will attain a will attain a answer theory and attain a cumulative mark cumulative mark cumulative mark cumulative mark practical based cumulative mark between 75 and between 65 and between 50 and between multiple choice between 85 and 84%. A mark in 74%. A mark in 64%. A mark in 0-49 %. A mark questions by 100%. A mark in this range) this range this range indicates in this range selecting the best this range indicates you indicates you you have indicates you option from five indicates you have have demonstrated a have not
available choices have demonstrated a demonstrated a basic knowledge demonstrated a
to demonstrate demonstrated an comprehensive sound knowledge and understanding basic knowledge their exceptional and a and high level of and of the concepts. and understanding of high level of knowledge and understanding of understanding of basic legal knowledge and understanding of the concepts. the concepts. concepts . understanding of the concepts. the concepts.
Short answer questions will be marked in accordance with the following criteria:
CRITERIA HD DI CR PS FL
Students will be To meet this level you To meet this To meet this To meet this At this level you required to will attain a cumulative level you will level you will level you will will attain a
answer five mark between attain a attain a attain a cumulative mark
short answer 85%-100% for this cumulative mark cumulative cumulative between 0%-49% theory and section of the between mark between mark between for this section of problem-type examination. A mark 75%-84% for this 65%-74% for 50%-64% for the examination. A questions to in this range indicates section of the this section of this section of mark in this range demonstrate that, in aggregate, you examination. A the the indicates that you their have demonstrated mark in this examination. A examination. A have demonstrated understanding of exceptional knowledge, range indicates mark in this mark in this limited knowledge, legal concepts understanding, and that, in range indicates range indicates understanding and and principles ability across a range aggregate, you that, in that, in ability across the and ability to of topics in this have aggregate, have aggregate, you range of topics apply the law subject. demonstrated demonstrated a have selected for briefly and a comprehensive sound demonstrated a examination in this concisely to a set knowledge, knowledge, basic subject.
of facts and to understanding, understanding, knowledge, reach a correct and ability across and ability understanding, conclusion on a range of topics across a range and ability the issue in this subject. of topics in this across the range
subject. of topics
selected for examinations in this subject
Note that students do not need to comply with referencing requirements when writing answers to problem questions in exams. All that is required when citing cases is the names of the parties.
Problem questions will be marked in accordance with the following criteria:
CRITERIA HD DI CR P FL
Students are To meet this level To meet this To meet this To meet this level you At this level you will required to you will achieve a level you will level you will will achieve a obtain a mark of answer two cumulative mark achieve a achieve a cumulative mark of 0-49 %. A mark in problem type of 85-100%. A cumulative cumulative mark 50-64%. A mark in this range indicates questions in mark in this range mark of of 65-74%. A this range indicates that a student:
order to indicates that a 75-84%. A mark in this that a student:
demonstrate: student: mark in this range indicates
range indicates that a student:
that a student:
Comprehensive Correctly Identifies and Identifies some legal Identifies no relevant Identificationcoverage and identifies legal correctly issues. May or may issues or only a few of relevant identification of all issues and formulates most not formulate them of them. Some of legal issues legal issues, which formulates major legal correctly. Considers these may be are formulated them with issues connected links to relevant law. unclearly with consideration consideration to relevant law. formulated. Considers of all contextual of contextual few contextual
factors . factors factors of relevant connected to law.
relevant law, with only minor errors.
Explanation Provides a Provides a Provides a Provides a basic Provides incorrect or of law and complete comprehensive substantial explanation of the limited explanation of citation of explanation of the explanation of explanation of law, but with the law using no, or relevant law, justified by the law with the law but with significant errors, only a limited range legal relevant statute few errors, some errors, substantiated by some of, authority. authority and case law substantiated substantiated by legal authority.
authority, with no by relevant significant legal errors. Discussion case and authority in the identifies key rules statute law form of statute
of law, stating stating and case law.
relevant principles relevant and shows insight principles.. in identification Research of and discussion of relevant legal potentially hidden authority issues. Research of shows a relevant legal breadth of authority shows a investigation
breadth of through investigation detailed through detailed analysis and analysis and discussion.. discussion.
Application Applies the law to Applies the Applies the law Makes a basic attempt Paper does not of legal the facts so as to law correctly correctly to most to apply the law to the correctly apply law to principles to reach a correct to the facts so issues arising facts, but applies the facts and / or the facts conclusion on all as to address from the facts, wrong law and / or applies incorrect issues, with no all issues, with but with some contains significant law. May be errors. Argument only minor errors. Argument errors in the descriptive, rather discusses linkages errors. discusses application. Argumentthan putting forward
between facts and Argument application of summarises a reasoned argument.
the law and discusses the application of the
considers linkages law. Conclusion law. Advice to client counter-arguments, between facts summarises is incomplete.
evaluating the and the law , advice for client.
impacts of evaluating the applying the law to impacts of the situation applying the considering a law to the broad range of situation
factors that may considering affect the factors that application. may affect the Conclusion draws application. together advice for Conclusion
client. draws together
advice for client
Written Uses appropriate Uses Uses appropriate Significant spelling, Poor grammar, expression academic writing appropriate academic grammar and spelling and/ or and editing. which is formal, academic writing which is punctuation errors but punctuation. impersonal and writing which formal and the paper is readable.
which contains no is formal, and impersonal, with spelling, grammar impersonal a few spelling, and punctuation with only very grammar and
errors. minor punctuation
spelling, errors.
grammar and

Material provided by the University
1 x GPAS answer sheet for multiple choice questions
2 x 12-page answer books
Material required by the student
Writing materials (including HB pencil, eraser and pen).
Appendix 1 Assessment Information
Sample exam

CHARLES STURT UNIVERRSITY
School of Accounting and Finance
Sample Exam
LAW504 Business and Corporations Law

EXAM CONDITIONS:
This is an open book exam
No calculator is permitted
Bilingual Dictionary permitted (printed copy only, unmarked and unannotated) The student may NOT retain the question paper

WRITING TIME: 3 hours plus 10 minutes reading time
Writing is permitted during reading time

MATERIALS SUPPLIED BY UNIVERSITY: 1 x GPAS answer sheet
2 x 12 page answer booklets

MATERIALS PERMITTED IN EXAMINATION: As listed in Exam Conditions
( No electronic aids are permitted e.g. laptops, phones)

NUMBER OF QUESTIONS:

Part A: 15 x 1 mark multiple choice questions (answer all questions)
Part B: 5 x 3 mark short-answer questions (answer all questions)
Part C: 5 x 10 mark problem questions (answer any 3 questions)

VALUE: This examination is worth 60% of the final assessment

INSTRUCTIONS TO CANDIDATES:

1. Enter your name and student number and sign in the space provided at the bottom of this page.

2. This examination has three (3) parts. Part A and Part B are COMPULSORY. Part C has five (5) questions, you must attempt ANY THREE of these.

3. Mark your answers to Part A on the General Purpose Answer Sheet provided. Write your answers to Part B and Part C in the booklet.

4. Part A is worth 15 marks Part B is worth 15 marks
Part C is worth 30 marks.
STUDENT NAME: …………………………………………. STUDENT ID: ……………………….
SIGNATURE …………………………………………………………………………………………….
CALCULATOR USED (IF ANY) …………………...…………………………………………………

Part A

MULTIPLE CHOICE

All questions are COMPULSORY in this part. This part is worth 15 marks.

1 . A law enacted by a State Parliament will be invalid if it

A. relates to a topic listed in s 51 of the Commonwealth Constitution
B. does not relate to a topic listed in s 51 of the Commonwealth Constitution
C. relates to an exclusive power of the Commonwealth or is a law to which s 109 applies D. relates to any topic not listed in s 51 of the Commonwealth Constitution
E. is inconsistent with the federal system.

2 . The two primary sources of law are

A. Acts and Bills
B. Textbooks and Acts of Parliament
C. Common law and case law D. Statutory law and Common Law
E. Rules and regulations.

3 . A person who has made an offer :

A. is never permitted to revoke their offer;
B. is always permitted to revoke their offer;
C. can revoke it if the other person has accepted it;
D. can revoke it if they have promised not to withdraw it, but the offeree has not provided any consideration for that promise;
E. can revoke it in none of the above circumstances.

4 . The difference between arbitration and mediation is that :

A. in arbitration the arbitrator makes a decision, whereas in mediation the mediator facilitates negotiations
B. in mediation the mediator decides the dispute brought to him or her while in arbitration they facilitate negotiations
C. in arbitration the mediator facilitates conciliation between the parties and seeks to get them to agree to a solution
D. in arbitration, the arbitrator attempts to conciliate the dispute, whereas in mediation this is not the case
E. in arbitration the arbitrator attempts to mediate the dispute.

5 . Intellectual property includes

A. leases
B. patents
C. mortgages
D. rights of way E. all of the above.

6 . The doctrine of precedent requires a court to follow

A. any earlier decision in which the facts are the same and the earlier court was higher in the same hierarchy
B. any earlier decision in which the facts are the same
C. any earlier decision in which the facts are the same and the earlier court was an Australian court
D. any earlier decision where the facts are the same and the earlier court was in a common law jurisdiction
E. any earlier decision in which the facts are the same and the earlier court was that of another State.

7 . A tort is :

A. a wrong which must be intended
B. a breach of the civil or the criminal law
C. an act intended or not, which causes harm to a person or property and for which damages may be awarded
D. is an act that is not intended but damages may be awarded if injury or loss has resulted
E. an act that is never intended.

8 . Consideration

A. is an essential element in a simple contract
B. is not needed in oral contracts
C. consists of 'natural love and affection'
D. may be past consideration
E. must be of adequate value relative to what is received.

9 . You are a judge in the supreme court of New South Wales. You discover a number of cases similar to one you are hearing. Which of these decisions must you follow:

A. the Supreme Court of Victoria
B. the District Court of New South Wales
C. the High Court of Australia D. the House of Lords
E. all of the above.

10. The case of Hyde v Wrench [1840] 49 ER 132 is authority for the rule that

A. an acceptance by post is effective when received by the offeror
B. a counter-offer destroys an offer
C. an offer by mail brings the postal acceptance rule into play D. an offer must be accepted in the same way as it was communicated
E. none of the above.

11 . Where goods are supplied to a company under a 'Romalpa' clause then
A. The goods will become subject to any security interest held over the company's assets.
B. The goods will become subject to any security interest over the company's assets.
C. The goods will not be subject to any security interest over the company's assets.
D. If the company alienates the goods the holder of a security interest may take the goods.
E. None of the above is true.

12 . If a director wishes to take a corporate opportunity, he or she

A. may take the opportunity after disclosing it to the board and obtaining the board's consent.
B. may take the opportunity after disclosing it to the board and shareholders and obtaining the consent of both.
C. may take the opportunity after disclosing it to the board and shareholders and obtaining the consent of both, and not voting any shares he (the director) has.
D. may take the opportunity freely provided that the company is a private company, not a public one.
E. may never take an opportunity that belongs to the company.

13 . In assessing priorities on liquidation of a company between employee claims, costs of liquidation and claims of unsecured creditors, the following is the order to be followed:

A. costs of liquidation, employee claims, unsecured creditors
B. employee claims, costs of liquidation, unsecured creditors
C. costs of liquidation, unsecured creditors, employees, claims
D. unsecured creditors, employees' claims, costs of liquidation.
E. employees' claims, unsecured creditors, costs of liquidation.

14. The decision in Daimler Co v Continental Tyre and Rubber Co [1912] 2 AC 307 is an example of the application of the doctrine of

A. separate corporate liability
B. the undisclosed principal
C. corporate opportunity
D. lifting the corporate veil
E. the duty of care under s 180(1).

15 . If on 1 July, Tom signs a contract to buy a vehicle for a company registered on 10 July then

A. the company will automatically be liable to pay for the vehicle
B. the company will be liable to pay for the vehicle if Tom agrees
C. the company will be liable to pay for the vehicle if it adopts the contract D. Tom will not be liable to pay for the vehicle
E. none of the above applies.

Part B

SHORT ANSWER QUESTIONS

All questions in this part are COMPULSORY. Each question is worth 3 marks.

1. Assume that A enters into a contract to purchase a car from B, but B refuses to deliver it on the required date. If A's friend, C, sues B to get him to deliver the car, what will happen and why?
2. Explain how the concept of estoppel can assist a party who wants to release another from a contractual obligation, giving an example of a reported case in which this has occurred.
3. Explain the business judgement rule.
4. Assume A is a limited partner in the firm of B and C. What are the rights and liabilities and powers of A ?
5. Explain what is meant by equity capital and debt capital.
Part C

PROBLEM QUESTIONS

This part consists of five (5) questions. You must attempt three (3) questions. Each question is worth 10 marks.

QUESTION 1

Capital Technologies Ltd (CT Ltd) is an electrical engineering company. It is listed on the ASX. Its research department has developed a new type of battery. The research is presented to a Board meeting on 1 July. It is agreed that a public announcement about the battery will be made on 15 July.
On 2 July, Don Trump, a director of CT Ltd, telephones his stock broker and buys 10 000 shares in CT
Ltd from Sean Young at the current market price of $ 2.00 each. That same night, he tells his friend Gordon Gecko, who he knows is a regular trader in shares, about the new battery but Gecko does not act on the information.

Upon the public announcement of the news about the battery, the price of shares in CT Ltd climbs to $ 22.00 each. A few weeks later, another shareholder, Sam Speed, who is an amateur scientist, reads an article in the latest issue of the International Journal of Chemistry which is available in his local library which says that an acid which Sam recognizes is one used in the batteries made by CT Ltd, is unstable. He sells his shares to Frank Jones for $ 22.00 each. Subsequently, when news reaches the market that customers of CT Ltd are complaining that the batteries have stopped working due to the unstable acid, the price of shares in CT Ltd falls to $ 15.00 each.

Advise as to the liabilities arising from these facts, citing relevant legal authority.

QUESTION 2

Patricia is a 48% shareholder in Opium Pharmaceuticals Ltd. She has been buying up shares in an attempt to gain control over the company. She tells you the following:

It has come to her notice that the board of Opium Pharmaceuticals Ltd has authorized the issue of 10 000 shares to Johnny Investor, at a price of $ 50 per share (the large scale of this offering means that the disclosure requirements of Chapter 6D of the Corporations Act 2001 (Cth) did not need to be complied with). However, the effect of this issue is that her relative shareholding in the company has now dropped to 25%. The company's accounts indicate that it has cash reserves of $ 100 million, and there are no new projects that will be undertaken.

She also learned that Peter Somnium, one of the executive directors of Opium Pharmaceuticals, who was given the job of acquiring raw materials for the company, negotiated a contract for the purchase of opium poppies (used by the company to make morphine) at $ 500 per tonne from a local supplier, whereas research on the internet (which Somnium admits he did not undertake) indicates that the poppies are easily obtainable at $ 100 per tonne. The result was that the company paid $ 1 million more for the poppies than it need have. Patricia also tells you that when she wrote to the board advising it of this issue, and asking that they take action against Peter, she was told that the board had decided not to act. They have also ignored her complaints about the share issue to Johnny Investor, saying that the shares were issued in order to raise capital.

Advise Patricia as to the legal issues arising out of these facts and what remedies are available to her.

QUESTION 3

Shell Oil is a company which transports oil in oil tankers. An oil tanker can usually earn Shell Oil about $ 50 000 per week. Shell Oil signs a contract with United Shipping Construction for the construction of a new oil tanker. The contract is 400 pages long. On the day set for the delivery of the ship, the director of Shell Oil notices that it has a red funnel instead of the green one required by the contract. It will take a week to have the funnel painted the correct colour. Shell Oil has been told by one of its customers that if Shell Oil is able to take an especially large cargo of oil to Singapore, they ( the customer) will pay $ 75 000. The managing director of Shell Oil wants to know if he can terminate the contract with United Shipping Construction and what other remedies he might be entitled to.

QUESTION 4

Bond Corporation Ltd is a listed company. It established a full fee paying University outside Port Headland. On 24 August its managing director, Tracey Jordan, authorised the publication of the following advertisement in the Kimberley Times:

A ONCE IN A LIFE-TIME OPPORTUNITY

We are proud to announce the establishment of Kimberley University, Australia's newest private University.
Invest in our education-services company by purchasing shares in any amount from as little as $ 1 000. Given the explosion in private tertiary education in Australia in recent years, we confidently predict a minimum enrolment of 5 000 students within the first year and a profit by the University within two years after that.

On 30 August, Jordan subsequently telephoned Tina Fey, who he had known when they were students together at University, offering her $ 20 000 worth of shares, which she purchased. He also phoned Leo Spaceman, another friend, and offered him $ 500 000 worth of shares. On 5 September, Bond Corporation Ltd lodged a prospectus with ASIC, giving details of the share issue. On 20 September, Don Geiss, who received a copy of the prospectus bought $ 30 000 worth of shares.

It transpired that the use of the word 'University' was conditional on the passage of legislation through the West Australian Parliament, which did not occur. The institution therefore had to operate as a tertiary College and only 1 000 students enrolled in the first year. The shares that Don bought are now worth only half what they paid for them. Advise Bond Ltd on the legal issues arising out of these facts.

QUESTION 5

Bartholomew is a musician. He has written a song which he is trying to get a recording contract for. To develop some publicity for his song, he often plays it on the street corner. Matthew has often stopped to listen. Bartholomew discovers that Matthew has released a CD containing a song which uses exactly the same words as the first two verses from Bartholomew's own song. Bartholomew used to work for a hotel as a pianist in its restaurant. Part of his job involved composing and playing music for the restaurant.
He no longer works for the hotel and is angry when one day, as he walks past the hotel, he hears a recording of his
music being played over speakers in the hotel lobby. Advise Bartholomew as to his legal position in relation to
Matthew and the hotel owners, citing relevant sections from legislation.

SAMPLE EXAM SOLUTION
PART A MULTIPLE CHOICE

1. C
2. D
3. D
4. A
5. B
6. A
7. C
8. A
9. C
10. B 11 . C
12. C
13. A
14. D
15. C

PART B

1. The court will not allow C to sue. The doctrine of privity of contract means that rights and obligations under a contract attach only to the parties to the contract. Third parties, such as C, have no standing to sue.

2. If one person promises to release another from an obligation, that promise will not be enforceable as a contract, as the promisee is getting consideration, but is giving none in return. However, the promise may be enforceable on grounds of estoppel as in Central London Properties Trust Ltd v High Trees House Ltd where a landlord's promise to release tenants from the obligation to pay rent was held binding on the basis of estoppel.

3. Under s 180(2) of the Corporations Act 2001 (Cth), a director who is sued for breach of the s 180(1) duty of care will escape liability if he or she can show that the conduct for which he or she is being sued was a business judgment which they rationally believed was in the best interests of the corporation.

4. A can share in the profits of the firm, but is not liable for loses. A may not take part in the management of the firm. If he does so, he will lose his protection as a limited partner and will become liable for firm debts under s 67(2) of the Partnership Act 1892 (NSW).

5. Equity capital is the term used to describe the funds provided to the company by members subscribing for shares in the company. Debt capital describes funds lent to the co