Laws3306

BUSINESS LAW

Faculty of Law

LAWS3306

Finance Law

6 credit points

Tutorial Exercises 5 - 6

Semester 1 – 2013

Unit Coordinator: Dr Rasiah Gengatharen

Office: Law Link Building Room 2.40

Telephone: 6488 3828

Email: rasiah.gengatharen@uwa.edu.au

http://www.law.uwa.edu.au/courses/undergrad/business

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TUTORIAL EXERCISE No 5

Question 1

Examine the meaning of a ‘credit contract’ under the National Credit Code.

Question 2

Hire purchase is a form of contract under which goods are hired, and there is a right or obligation of the hirer to purchase the goods. Explain the effect of the National Credit Code on the legal nature of a consumer hire purchase contract.

Question 3

Jim, a real estate agent from Northam, decides to purchase a $25,000 painting from Art Warehouse Ltd (AW). AW agrees to let Jim pay for the painting in twelve equal monthly instalments of $3,000. The agreement is not reduced to writing but is concluded by a handshake between Jim and the managing director of AW. A month later, Jim becomes ill with Ross River virus and is unable to meet the instalment payments on the painting. His doctor advises him that he would be fully recovered in three months’ time. Jim asks AW for an extension of time to pay off the painting but AW refuses.

(a) Advise Jim of his rights, if any, under the National Credit Code.

(b) How, if at all, would your advice in (a) be different if Jim had bought the picture for use in his business?

Question 4

Briefly explain the legal nature of following contractual undertakings:

* Negative pledge

* Guarantee

* Letter of comfort

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TUTORIAL EXERCISE No 6

EXAM QUESTION

Question 1

Umberto is an immigrant with a very poor command of English. He decides to buy a slightly used Mercedes station wagon from Luxury Vehicles Pty Ltd for $55,000. The odometer reading is 12,000...