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1. If an adult entered into a contract without realizing that he was dealing with an infant, would the adult be in a position to enforce the agreement? Would your answer to this question apply under all circumstances?

2. If a minor or infant is engaged in business, how are the courts likely to view business contracts entered into by the minor?

3. Identify the three major classes of contracts considered to be in restraint of trade.

4. How does the capacity to contract of a minor differ from the capacity to contract of an insane or drunken person?

5. What are the limits on the powers of a “special-Act” corporation to bind itself in contract?

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Week 1 Question (10 marks) Differentiate between a sole trader, company and a partnership. Support your answer to this by citing the advantages and disadvantages of using each business structure. (10 marks) Week 2 Question (10 marks) Teresa and Alison operate a partnership making and selling jam. A reduced supply of fruit has resulted in a fall in sales. Alison purchased a large supply of glass jars that must be paid for within 30 days. The funds are not available to meet this expense. Teresa was not consulted when Alison bought the jars and insists that Alison pay for them out of her personal savings. What do you think will be the legal consequences here resulting from Teresa’s decision not to consult Alison? (10 marks) Week 3 Question (10 marks) Provide a case summary of the case “Salomon v Salomon & Co Ltd [1897]” using the IRAC method. What was the significance of this case law in relation to the legal concept of separate legal entity? (10 marks) Week 4 Question (10 marks) When can the corporate veil be lifted under the Corporations Act to make directors liable for corporate debts? (10 marks) Week 5 Question (10 marks) Provide a case summary of the case “Lee v Lee’s Air Farming Ltd [1960] UKPC 33” using the IRAC method. What legal principle came out of this case in relation to why the court lifted the corporate veil in this case?

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