DEPARTMENT OF ACCOUNTANCY
MASTER OF ACCOUNTANCY
ACT502 Business and Company Law 2024-25
Take-home Assignment Sheet
Individual take-home assignment (25% of total marks); each question carries equal marks. All questions must be answered. Due on 26 Oct 2024, Week 8. Late submission will not be marked.
1. Offer and Acceptance
Natalie is a law professor and Michael is a second handbook dealer. On October 9, Natalie sent a letter to Michael with whom she has been negotiating a contract to sell all of her law textbooks for HK$35,000. The letter stated that
“Unless I hear from you by return mail on or before October 16, the offer will lapse. ”
Unfortunately, Natalie’s letter was insufficiently stamped and did not arrive Michael’s office in Sheung Wan until October 16 at 9 a.m. Michael replied immediately accepting the offer and posted a letter on October 16 at 12 noon.
On October 14, Shirley, a law student, came to the knowledge of the negotiation (via Natalie’s teaching assistant) and sent a WhatsApp message (i.e.: a popular online chat platform) to Natalie expressing her interest to buy the textbooks for HK$28,000. Without hearing anything from Natalie, Shirley telephoned Natalie the next day, October 15 to raise the offer price to HK$29,000 which Natalie immediately accepted.
On October 16, Natalie sent an email to Michael’s secretary (Fanny) telling her that the offer of October 9 was withdrawn. This email was received by Fanny’s computer at 11:00 a.m. on October 16 but was not opened and read by Fanny until the next day.
Discuss the contractual rights of Natalie, Michael and Shirley. (50 marks)
2. Exemption Clause of Liability and Sale of Goods Ordinance
Fion Centre Ltd is a small store in Tuen Mun selling electronic appliances, including microwave ovens and containers. Ada, Fion Centre’s store manager and Lambert is an old acquaintance. Lambert has received HK$2,000 subsidy from the HK Government on food and beverage, and was eager to buy a new microwave oven to start his own bakery business online. Lambert’s elderly fatherhas just retired.
Ada suggested Lambert to spend all of his subsidy to purchase two microwave ovens. One is the latest model of Life is Good for his bakery business and the other oven, a brand called Simply for his father. Ada promised that both microwave ovens are of superior quality with respective warranties (i.e.: new Life is Good for 24 months and Simply for 6 months) and that the Simply model is an all-in-one oven capable of reheating all frozen food.
Lambert agreed to buy both ovens and Ada issued a receipt in the name ofFion Centre. At the back of the receipt, Fion Centre disclaimed all liabilities that
“Fion Centre Ltd shall not be responsible for any defects in product sold, which caused by human errors or other unforeseeable issues happened under warranty period howsoever”.
When Lambert’s father used the Simply microwave oven for the 3rd time, it could not reheat the frozen meal properly. When he tried to open the oven door, it exploded and hurt his face badly. Lambert has to spend HK$2,500 to buy another microwave of quality and HK$20,000 for his father’s medical expense. Lambert wishes to claim from Fion Centre to compensate for his losses but Ada denied its liability based on the exemption clause written on the receipt.
Advise Lambert of his legal rights (including his father’s) under Contract Law and the Sale of Goods Ordinance. (50 marks)
Notes:
(i) You need to make attempt to ALL questions. Submit via Turnitin before the deadline.
(ii) Each answer should be no less than 400 words (max.1500).
(iii) State the legal principles applicable to each issue, including relevant case law and legislation.
(iv) Analyse the facts and make assumptions if necessary.
(v) You may argue against certain established law and principles as long as sufficient reasoning is given to support your point of view.