SUNWAY UNIVERSITY BUSINESS SCHOOL SAMPLE FINAL EXAMINATION FOR LAW1014 BUSINESS LAW

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1 SUNWAY UNIVERSITY BUSINESS SCHOOL SAMPLE FINAL EXAMINATION FOR LAW1014 BUSINESS LAW

2 This paper contains SIX (6) questions. You are required to answer ANY FOUR (4) questions. Each question carries equal marks. Question 1 25 marks On 3 May 2014, Azam wrote to Ben offering to sell to Ben his boat for RM2 million. The letter expressly stated that if Ben did not reply by 10 May 2014, he would be deemed to have accepted the offer. On 9 May 2014, Azam sent a letter to Ben revoking his offer. On 10 May 2014 Benny posted a letter to Azam accepting Azam s offer. Azam s letter of revocation reached Benny on 11 May Ben s letter of acceptance reached Azam on 12 May Ben wishes to know whether there is a valid contract between him and Azam for the sale and purchase of the boat. Advise Ben under the law of contract whether a contract has been formed between Azam and Ben with reference to relevant cases and provisions from the Malaysian Contracts Act Question 2 Laurie who is 16 years of age, decides to leave home. She travels to Kuala Lumpur, where she quickly finds herself a full time job at Hallam & Co and a small room in which to live from Mr Jenkins. She pays 3 months rent as deposit for the room. She is not sure whether the job is something that she wishes to be doing for the long term and the room is dirty and long way from work, although it is cheap to rent. She also contracts with Sammy Groceries to be supplied with food supplies to be paid on credit. Laurie now has found a new room at cheaper rent as well as cleaner environment. Laurie seeks to terminate the rental contract Mr Jenkins but is told that the 3 months rental deposit would be forfeited. Laurie also has found a better job nearer her new accommodation and now seeks terminate her job at Hallam and Co. Her attention to brought to a clause in her contract which states that, 1. A part time employee under this contract is bound not to resign at any point of time unless and otherwise such resignation is approved by the Human Resource Manager of the firm. 2. The Human Resource Manager of the firm reserves the right to terminate an employee under part time employment contract without any notice being given prior to termination. She has also not paid Sammy Groceries for one month for the food supplied to her. 2

3 Laurie would like your advice on whether she is bound by the terms the contracts she has entered into. Advise the parties who have contracted with Laurie with respect to their remedies available under Malaysian Contract Law with respect to contract with minors. Question 3 Ahmed sells his car to Mahmoud for RM20,000. During negotiations, Mahmoud takes a look at the car whilst Ahmed gives him some information about it. Ahmed tells him that the car runs well, that it has full maintenance history, that it has had two previous owners and that the odometer shows that the car has been driven for 50,000 km since new. Ahmad adds that based on his experience of having been in the used car business, that a car which only has 50,000km on its mileage for RM20,000 is a real bargain. Ahmad gave his assurance to Mahmoud that the car is in fact road worthy. In fact, the car has had three previous owners, according to the registration documents in Ahmed s possession, and Ahmed had a new odometer fitted to the car when the old one read 80,000kms. The car was involved in a serious accident while drive by its more recent previous owner and had undergone extensive repairs to his frame and structure. The intrinsic paint job and welding work did not reveal this nor did Ahmad. Mahmoud s mechanic now tells him that the damage to engine makes the car not road worthy and dangerous to drive. Discuss Ahmed s potential liability towards Mahmoud, should Mahmoud discover that he has been misled by Ahmed. Question 4 Thomas has a large family and unable to keep up with the laundry demands placed upon him by his family, he engages the services of Ultraclean Ltd. Ultraclean collects dirty laundry from its customers twice weekly. They guarantee that they will return the laundry within 3 days, washed and ironed. They undertake to use only certified friendly to the environment and skin safe products to wash and clean the laundry of its customers. On the back of each Ultraclean collection slip, which each customer receives upon collection of the laundry by Ultraclean, are printed the terms and conditions. These terms include: i. Ultraclean accepts no liability for any loss or damage to anyone, howsoever claused by Ultraclean, its agents and its employees; ii. While every attempt is made to collect laundry twice weekly, pick-up times cannot be guaranteed and Ultraclean reserve the right to alter pick-up times without notice; 3

4 iii. iv. Ultraclean may change their cleaning processes without prior notice; and Ultraclean reserves the right to alter prices without notice. Thomas pays RM200 per week for the service. For the first month everything works well. After that certain problems arise. Due to staff shortages, Ultraclean change the pick-up times to every five days rather than twice a week. For two weeks none of Thomas laundry is returned. He is required to purchase certain items for his household linen and clothing on an emergency basis. Ultraclean begins to use cheap soap powder which causes Thomas wife, Shalini, to develop skin rash. Thomas is injured when the Ultraclean van driver reverses into him in the driveway. Discuss whether the Thomas is bound by the terms of the contract as well as the exclusion clause imposed by Ultraclean. Question 5 Yasni and Zoe are university students. They attended a music festival organized by XS Sdn Bhd (hereinafter referred to as XS ). XS booked a local school with a large football field as venue for the music festival. They erected a large tent in front of the stage to shade the people attending the music festival. Due to the large crowd that had purchased tickets to the festival, XS decided that there will be no chairs placed at the venue.they felt that people could stand and watch. They did however provide straw mats for the first 200 people who bought tickets as part of an early bird package. At the start of the festival, it was estimated there were some 3000 people at the football field. It was known to XS that the venue that the field and the tent could support approximately 2000 people comfortably, but since it was a music festival, XS believed that it was not necessary to take additional precautions with respect to the tent as well as crowd control. Yasni and Zoe were part of the first 200 people who bought the tickets and they received the straw mats. On the day of the festival, Yasni and Zoe were early at the venue. They found a place near the stage, laid their straw mats and sat down. During one of the performance by a band at the festival, the supports for the tent came loose because it was not fitted properly by the contractor hired by XS. As the tent collapsed, the crowd went into a state of panic and people began to stampede attempting to escape the falling tent. Those sitting on the ground, including Yasni and Zoe, suffered injuries due to people falling unto them trying to escape the venue. Yasni suffered severe head and neck injuries as well as injuries to his limbs. After the incident he spent many months in hospital and despite the best efforts of the medical team at the hospital, he was paralysed neck down. Zoe died during the incident. She died as a result of people falling and stepping on her. The post-mortem report from the hospital stated that her neck was broken during the stampede. Yasni s and Zoe s family seek to make a claim in negligence against XS. Discuss whether they would be able to succeed in applying the principles of negligence to 4

5 their claim. Also consider whether there would be any defences that XS would be able to rely on, in the event a claim could be made. Question 6 Marcus was employed as an Client Account Manager at SDK Sdn Bhd as a Manager with a monthly salary of RM5,500. He began work on 10th October SDK Sdn Bhd is an investment company that deals with stock trading and unit trust. Marcus duties as am employee included the handling of client funds for investments. The contract of employment stipulated that, Confidentiality 1.4 You are aware that in the course of your employment you will have access to and be entrusted with information in respect of the business and finances of the Company and its dealings, transactions, and affairs all of which information is or may be confidential. 1.5 You will not (except as authorized or in the proper course of your duties) during or after the period of your employment divulge to any person whatever or otherwise make use of (and will use your best endeavours to prevent the publication or disclosure of) any trade secret or any confidential information concerning the business or finances of the Company or any of its dealings, transactions or affairs or any trade secret or any such confidential information concerning any of its clients, suppliers, agents, distributors or customers. On 16th June 2013, when the auditors for SDK Sdn Bhd found that there were discrepancies with in the client accounts handled by Marcus. They submitted a report to the Directors of the Company that the amount invested by Marcus and the returns made were not consistent with what the clients received under the investment. They also noted that one particular client account handled by Marcus was making more than the investment placed through the company. This person was revealed to be Marcus wife on further investigation. On 18 July 2013, Marcus was summarily dismissed from his employment at SDK Sdn Bhd on the ground of misconduct in breach of clause 4.4 and 4.5 above found in his contract of employment. Marcus was not given an opportunity to explain the discrepancy or why his wife s investment account with SDK Sdn Bhd earned more in returns than other accounts that Marcus handled. Marcus now seeks to take an action against the company for unfair dismissal. Advise Marcus on whether he has a case for unfair dismissal and explain the process which he may initiate under Malaysian Employment Law. ~ END OF PAPER ~ 5