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LAW2480/LAW2498_2050_Final Assessment Task 1 ASSESSMENT COVER SHEET COURSE CODE: LAW2480/LAW2498 COURSE DESCRIPTION: Business & Corporations Law ASSESSMENT DATE: 4/11/2020 ASSESSMENT START TIME: 2pm ASSESSMENT DURATION: 2 Hours + 15 Mins Reading Time + 15 mins uploading time TOTAL number of pages (incl. this cover sheet) 4 pages ALLOWABLE MATERIALS AND INSTRUCTIONS TO CANDIDATES 1. Students must write all answers in a separate word document. 2. This is an open book assessment - all materials permitted 3. This assessment contains three questions. Attempt ALL questions and ALL parts of the questions. Questions may be answered in any order but should be numbered correctly. Commence each question on a new page. Word limit: Your answer to each question should not exceed 1,000 words (+ 10%). This means that your submission of the answers should not exceed 3,000 words (+ 10%) in total 4. This exam paper is worth 50 marks & comprises 50% of the total marks allocated in this course. 5. This is an individual assessment and it must be your own work. Plagiarism will attract a heavy penalty and will be reported to the University for investigation. 6. Submission: please submit your answer through Canvas in word format, not pdf. LAW2480/LAW2498_2050_Final Assessment Task 2 QUESTION ONE Answer all of the following short answer questions. Refer to relevant cases and statutory law in your answers where appropriate. REQUIRED: a. Explain the difference between an illegal contract at law, and a contract which is performed illegally? Support your answer with the law. (2.5 marks) b. What are the key legal characteristics of a proprietary company? (2.5 marks) c. Explain the statutory law of misrepresentation per the Australian Consumer Law, and provide an example? (2.5 marks) d. Explain the difference between a direct and an indirect contract, when a company contracts with an outsider? (2.5 marks) Total (2.5 + 2.5 + 2.5 + 2.5 = 10 marks) QUESTION TWO Explain the difference between a non-circulating security interest and a circulating security interest, and state your opinion as to which is better security. Support your answer with the law and examples. Refer to relevant case law and/or statutory law in your answer, where appropriate. (5 marks) Total (5 marks) ASSESSMENT CONTINUED ON NEXT PAGE LAW2480/LAW2498_2050_Final Assessment Task 3 ASSESSMENT CONTINUED QUESTION THREE Read the following scenario and answer all of the following questions. Refer to relevant cases and statutory law in your answers where appropriate. Refresh Ltd (‘Refresh’) is an unlisted company specialising in property development. The directors are Aaron (the CEO), Tina (Financial Director) and Chrissy (Director of Operations). In a directors meeting in March, 2019 the directors discuss the slightly depressed real estate market and note that prices remain low. As such, they discuss acquiring land now and holding it for future property development. Robert, a cousin of Aaron, owns a block of land in the eastern suburbs of Melbourne, currently advertised for auction with no list price. Robert is under financial pressure from the bank to repay the loan on the land and is therefore keen to sell it. Aaron brings the ad to the attention of the Board, who express interest in acquiring the parcel of land. Aaron does not disclose his relationship to Robert. The board unanimously vote in favour of the company acquiring the land for $450,000 which represents a much higher market value, and is higher than the debt that Robert owes the Bank. The other two directors know that land prices are depressed and do not obtain an independent valuation of the property. To acknowledge his gratitude, Robert gives Aaron $5,000 so he can take his family on holiday. Three months after acquiring the property, the directors learn that the land is full of termites and contains contaminated soil. Its commercial value is actually about $250,000. In a separate matter, Refresh Ltd are looking to engage a landscaping and architectural firm to design plans for their new buildings. As it happens, Tina’s brother Spiros owns an architectural firm. The board delegates to Chrissy the role of obtaining quotes from at least three architectural firms. Over lunch, Tina asks Chrissy how everything is going and Chrissy explains that she has obtained two quotes so far – one for $80,000 and the other for $69,000. Tina recommends her brothers firm, but does not advise it is her brother. That afternoon, Tina tells Spiros what the other architectural firms have quoted. This allows Spiros to offer a lower price of $65,000, but only valid for 24 hours. Because this is the cheapest quote and Chrissy does not want to miss out, she immediately signs on behalf of the company. Later that week she explains this transaction at the April board meeting. Tina does not attend the board meeting, or vote, as she is away on holiday. This is her fourth missed meeting in less than a year. She has not told the Board that her brother was planning to submit a tender. QUESTION THREE CONTINUED ON NEXT PAGE LAW2480/LAW2498_2050_Final Assessment Task 4 QUESTION THREE CONTINUED QUESTION THREE Respond to the scenario based problem and answer all the following questions. Refer to relevant cases and statutory law in your answers where appropriate. a. Explain whether the contract entered into by Chrissy on behalf of Refresh is valid and legally enforceable? (5 marks) b. Explain whether any directors have breached their duties, and whether any valid defences apply. Include reference to any applicable penalties. Support your answer with reference to statutory and case law. (20 marks) c. Explain what the likely consequences for the directors may be, if the company enters into administration? (5 marks) d. Explain what the likely consequences for the directors may be, if the company enters into liquidation. Would a liquidator identify any transactions which can be clawed back? (5 marks) Total (5 + 20 + 5 + 5 = 35 marks) Assessment Total (10 + 5 + 35 = 50 marks) END OF ASSESSMENT Note: For all questions you must refer to the relevant cases and statutory law in your answers.