The main function of the Australian Parliament is

to:
Enact laws according to the Australian
Constitution.
Determine State government policies.
Protect the rights of the citizens.
Inform the citizens of their rights.
Laws made by parliaments are called statute law.

Which of the following is a purpose of a hierarchical

court structure?
All of the options.
A hierarchy of courts provides a system of appeals through
which dissatisfied litigants may appeal from a decision of a
lower court to a high court to have the matter reconsidered.
A hierarchy of courts is instrumental in the building up of
precedent.
A hierarchy of courts allows different forms of hearing
according to the gravity of the case.

TRUE - False
Which of the following statements best reflects the
doctrine of precedent?
All previous decisions must be similar.
Cases with different facts should be decided in a similar
manner.
Cases with similar facts should be decided in a
similar manner.
All previous decisions must be followed.
What is the meaning of the term "court hierarchy"?
The horizontal arrangement of courts within Australia.
A vertical system of appellate courts.
The supreme courts of the various states and
territories.
A tiered court system within each particular
jurisdiction.
Business law is primarily about civil disputes
which result in remedies for the successful party
and liabilities for the losing party. Which of the
following are examples of aspects of civil law
relevant to business?
Business entities law.
Tort law.
Contract law.
All of the options.
Is the High Court a State court, that is located
within the State court hierarchy, or is it a Federal
court, that is located within the Federal court
hierarchy?
The High Court is both a state court and a federal
court.
The High Court is a federal court located within the
federal court hierarchy.
The High Court is neither a state court nor a federal
court.
The High Court is a state court.

(Which of the following is NOT one of the purposes of

having a Hierarchical Court structure?)
Which of the following is NOT one of the advantages of
ADR (Alternative Dispute Resolution) over formal
litigation?
ADR is less expensive than formal litigation.
ADR is less intimidating than formal litigation.
ADR is more authoritative than formal litigation.
ADR is more likely to be heard quickly than formal litigation.
Which of the following statements is the best definition
of the concept of 'Justice'?
A branch of English law which developed hundreds of years
ago when litigants would go to the King and complain of
harsh or inflexible rules of common law.
A rule of conduct made by the state and backed by the
threat of coercive sanctions.
Fairness. Conduct or action is both fair and right, given
the circumstances.
A case which establishes legal principles to a certain set of
facts, coming to a certain conclusion, and which is to be
followed from that point on when similar or identical facts are
before a court.
The Australian Constitution is a very important piece of
legislation that is:
The law that regulates how Australia is governed.
The law which regulates commercial transactions.
A set of citizen rights.
The story of the Australian legal system.
Which of the following matters fall within the original
jurisdiction of the High Court?
Appeals from State Supreme Courts.
Disputes between individuals over land within one State.
Disputes relating to the constitutions of individual States.
Disputes between States.
The rules of equity:
Complement the common law.
All of the options.
Provide a wider range of remedies than the common law.
Are based upon the concept of fairness.

In Australia, the common law system is the

system of law. False - True.
Which of the following is an objective of the
High Court?
To hear cases involving indictable offences
against the laws of the Commonwealth.
To guard and interpret the Australian
Constitution.
All of the options.
To serve as a final court of appeal within the
Australian legal system.
In Australia the law is derived from several
sources. Which of the following are the two main
sources of the law in Australia?
Common law and Statute law
International law and Treaties.
Private and Public law.
All of the options.
Business law is primarily about civil disputes
which result in remedies for the successful party
and liabilities for the losing party. Which of the
following are examples of aspects of civil law
relevant to business?

A promise to keep an offer open for a specified period:

Is not enforceable unless supported by the offeror's
consideration
Is not enforceable unless made in writing
is not enforceable unless supported by the offeree's
consideration
is not enforceable
A court will enforce an agreement:
if a reasonable person would believe that an agreement
had been reached based on the conduct of the parties
only if both parties intended to reach an agreement
by ascertaining the actual subjective state of mind of each
party
only if there has been an actual 'meeting of the minds'
Which of the following statements in respect to
determining when an agreement is a contract is NOT

sometimes the law implies the existence of a valid contract

the courts are not concerned the intention of the parties
is a private matter
the parties are in an agreement do not always intend to
create legal relations.
it is generally not necessary that a contract be in writing to be
enforceable
Which of the following is NOT one of the three essential
requirements of a contract?

Tort law.
Business entities law.
All of the options.
Contract law.

a. an agreement in writing and signed by the parties

b. the intention that the agreement be legally enforceable
c. consideration
d. an agreement between two or more persons

Which of the following matters fall within the

original jurisdiction of the High Court?

Which of the following situations is likely to be seen as

an offer rather than an invitation to treat?

Disputes relating to the constitutions of individual

States.
Disputes between individuals over land within one
State.
Disputes between States.
Appeals from State Supreme Courts.

a. a catalogue containing a description of "Business Law" and

the statement "special offer! Only $79.99"
b. a copy of 'Business Law' in the window of a book shop with
a price tag attached to it
c. a poster advertising 'Business Law' at a reduced price
d. an email containing the question 'Can I buy your copy
of 'Business Law' for $20.00?'

Civil Law is best defined as which of the

following types of Law?
Laws based on the Bible.
Codified laws.
Laws made by sovereigns.
Laws based on the Koran.

Which of the following statements is correct in respect to

the nature of a contract?
a. not all contracts are agreements
b. the terms 'contract' and 'agreement' mean the same thing
c. a contract is a type of agreement
d. an agreement is a legally enforceable contract

Which of the following is NOT one of the legal

consequences of affective acceptance of an
offer?
a. the offer cannot be revoked
b. the parties intend the agreement to be legally
enforceable
c. the parties have reached agreement
d. The offer cannot be rejected
A unilateral contract is one where:
a. a person is obliged to pay a reward for a voluntary
act carried out by the other person
b. one person becomes obligated to carry out a
promise if the other person performs a required
act
c. there is only one person bound by the contract
d. only one person has any obligations
In relation to contract law an invitation to treat is
best described as:

The sources of contract law in Australia include:

Australian statute law
principles of equity
All of the options
Australian court decisions
English case law adopted by Australian courts
In Carlill v Carbolic Smoke Ball, the advertisement placed
by the company was:
a statement of intention
none of the options
an invitation to treat
an offer

Which of the following is NOT an example of a contract?

the hiring of an employee
the lease of a house
the payment of tax
the purchase of food from a takeaway

a. an offer to accept an offer

b. an offer to offer an offer
c. an offer to consider offers
d. and offer

Which of the following is the best description of

consideration in the context of contract law>

In which of the following cases involving

business or commercial agreements did the court
decide that the wording of an advertisement may
indicate an intention of the advertiser to create
legal relations?

all of the options

something of value passing from one party to another in
return for a promise to do something
an offer by one party is an acceptance by the other
the parties must intend that their promises create legally
enforceable obligations

a. Jones v Vernon Pools Ltd

b. Rose and Frank Co. v Crompton and Bros Ltd
c. Carlill v Carbolic Smoke Ball Co.
d. Edwards v Skywards Ltd
An offer is not terminated by:
a rejection of that offer by the offeree
a request for more information by the offeree
a counter-offer by the offeree
a qualified acceptance by the offeree
When a merchant advertises their products, the
courts generally presume that
the merchant intended any contract with a purchaser
to be legally binding
the merchant intended their statements to be legally
binding
the merchant did not intend to immediately create
legal relations with viewers of the advertisement
the merchant did not intend to enter into contracts
with purchasers of their products

Which of the following statements is the best description

of a 'voidable' contract?
the purpose of the contract contravenes a statute or the
common law
the contract remains valid and binding unless and until it
is repudiated by the injured party
there are no legal rights or obligations from the outset, and
the contract cannot be enforced by either party
the contract is valid on its face, no legal action can be brought
on it
Which of the following statements is the best description
of an 'illegal' contract?
while the contract is valid on its face, no legal action can be
brought on it
the purpose of the contract contravenes a statute or the
common law
the contract remains valid and binding unless and until it is
repudiated by the injured party
there are no legal rights or obligations from the outset, and
the contract cannot be enforced by either party.

Parties to a commercial agreement who do not

with the agreement to be legally binding:

Which of the following statements is the best description

of 'common mistake'?

need not do anything

can expressly declare that they do not intend to
create legal relations
are unable to prevent the agreement from becoming
legally enforceable
can expressly exclude the jurisdiction of the courts

a. one of the parties is mistaken about a material fact

regarding the subject matter of the contract
b. both of the parties are mistaken about a material fact that
is important to the subject matter of the contract
c. both parties have made a mistake about the existence
or identity of the subject matter of the contract
d. one of the parties is mistaken as to the nature of document
they have signed

Which of the following is the best description of

'intention' in the context of contract law

Consideration is sufficient if it is:

something of value passing from one party to another
in return for a promise to do something
all of the options
the parties must intend that their promises create
legally enforceable obligations
an offer by one party is an acceptance by the other

a. the performance of an existing contractual duty owed

to a third party
b. all of the options
c. the performance of an existing contractual duty owed to the
promisor
d. the performance of an existing legal duty

Which if the following actions or conduct is NOT

a requirement of a valid offer?
the offer must be more than a request for information
the offer must be made to a specific offeree
the offer must be kept open if supported by
consideration
all terms must be brought to the notice of the offeree
and followed exactly
Which if the following is the best description of
'agreement' in context of contract law?
the parties must intent that their promises create
legally enforceable obligations
something of a value passing from one party to
another in return for a promise to do something
all of the options
an offer by one party and an acceptance by the
other
In order to be contractually binding on the
parties, an agreement
must be expressed in writing but need not be signed
in all cases
may arise by implication as a result of the
conduct of the parties
must be either expressed in writing or expressed
verbally
must be expressed in writing
Which of the following statements are capable of
being representations (and hence
misrepresentations)
statements of opinion
statements of fact
statements of law
statements as to future conduct or intention

Which of the following statements is the best description

of 'negligent misrepresentation'?
a. a false statement of fact made knowingly, which the other
person relies upon and suffers loss
b. a false statement of fact made carelessly, which the
other person relies upon and suffers loss
c. all of the options
d. a false statement of fact made with the belief that it is true,
which the other person relies upon and suffers loss

Which of the following statements is the best description

of 'mutual mistake'?
a. one of the parties is mistaken about a material fact
regarding the subject matter of the contract, and the other
party takes advantage of this mistake
b. both parties have made the same mistake about the
existence or the identity of the subject matter of the contract
c. one of the parties is mistaken as to the nature of the
document they have signed
d. both parties are mistaken about a material fact
regarding the subject matter of the contract

Which of the following types of contract will not be

enforceable against a minor
a. trading contracts
b. contracts for necessaries
c. where the minor pays cash for goods or services
d. beneficial contracts of service

In Dunlop Pneumatic Tyres Co Ltd v Selfridge &

Co Ltd the court decided that:

In the context of contract law, 'consideration' is defined

as:

a. Dunlop could not enforce the promise made by

Selfridge because Dunlop had given Selfridge no
consideration
b. Dunlop could not enforce the promise because
there was no privity of contract between Dunlop and
Selfridge
c. Dunlop could not enforce the promise made by
Selfridge because that promise had been made to
Dew & Co
d. all of the options

a sum paid by one party for the other party's offer

the act of considering the terms of a contract before agreeing
to them
the price paid by each party for the other party's promise
or performance
the monetary value of a contract

Consideration must be:

a. valuable and either adequate or sufficient
b. valuable and adequate, but need not be sufficient
c. valuable, adequate and sufficient
d. valuable and sufficient, but not adequate
Which of the following classes of persons are
NOT presumed to have limited contractual
capacity?
a. intoxicated people
b. very old people
c. very young people
d. mentally ill people
Unless evidence to the contrary is shown:
a. all contracts are presumed to be legal
b. all contracts are legal
c. all contracts are illegal
d. all contracts are presumed to be illegal
A contract with a minor which is enforceable and
binding on both parties is called:
a. a valid contract
b. a void contract
c. a voidable contract
d. a good contract
A contract entered into by a corporation is
enforceable:
against the shareholders of the corporation
against the corporation as an artificial person
which has the legal capacity of an individual
only if the contract is consistent with the corporation's
constitution
against the directors of the corporation

Which of the following statements is the best description

of 'fraudulent misrepresentation'?
a false statement of fact made with the belief that it is true,
which the other person relies upon and suffers loss
a false statement of fact made knowingly, which the
other person relies upon and suffers loss
all of the options
a false statement of fact made carelessly, which the other
person relies upon and suffers loss

In Blomeley v Ryan:
the court granted an order for specific performance against
the farmer
the court held that the farmer was so drunk that his
judgment was seriously affected and this was known to
Blomley, so that as a result he was not in a position to
make a binding contract
the court held that the farmer although drunk, still understood
what he was doing and that as a result the contract was valid
the court held that it would be unfair to enforce the contract
against the farmer

Restraint of trade clauses are generally void at common

law because they:
discourage industry and enterprise and reduce competition
deprive the public of the services of one of the parties
injure one of the parties by reducing their means of earning a
livelihood
all of the options
Which of the following is NOT one of the elements of
promissory estoppel?
it would be unconscionable to allow the promisor to go back
on the promise
the promise sought to be enforced is supported by
consideration
the promisee has relied on the promise
the promisee has acted to their detriment on the basis of the
promise

Contracts between which of the following parties

will NOT be presumed to involve undue
influence?

Which of the following is NOT a requirement of a valid

acceptance to an offer?

between doctor and patient

between parent and child
between husband and wife
between religious advisor and devotee

the acceptance must be absolute and unqualified

the acceptance must be strictly in accordance with the
terms of the offer
the acceptance must be expressed verbally or in
writing
the acceptance must be made in reliance on the offer

In what circumstances will a person be able to

repudiate a contract entered onto while
intoxicated?
where the person was so intoxicated that they were
incapable of understanding the nature of the contract
all of the options
where the contract is not one for necessaries
where the other party knew or should have known
that the person was so intoxicated that they were
incapable of understanding the nature of the contract
Which of the following is the best description of
'unilateral mistake'?
one of the parties is mistaken as to the nature of the
document they have signed
one of the parties is mistaken about a material
fact regarding the subject matter of the contract,
and the other party takes advantage of this
mistake
both parties have made the same mistake about the
existence or the identity of the subject matter of the
contract
both parties are mistaken about a material fact
regarding the subject matter of the contract
In determining whether the parties to an
agreement intended to form a contract, why do
the courts so often rely upon legal
presumptions?
a. because the parties frequently lie about their
intention
b. because parties rarely express their intention
c. because it is rare for both parties to have the same
intention
d. because that is the law
Which of the following terms is also used to describe
the common law?
a. Case law.
b. Precedent law.
c. All of the options.
d. Judge-made law.

For a contract to exist, the agreement must

all of the options
contain a commitment to undertaking to abide by the
agreement
contains promises made between two or more parties
with the intent of creating enforceable legal rights and
obligations
contain a promise which is exchanged for something of
value
The doctrine of promissory estoppel:
a. all of the options
b. can be used to commence a civil action and/or as a
defence to a civil action
c. can be used as a defence to a civil action, but not to
commence a civil action
d. can be used to commence a civil action but not as a
defence to a civil action
Which of the following is NOT a requirement of a valid
consideration?
a. The consideration must be possible
b. the consideration must have some value
c. the consideration must be adequate
d. the consideration must be legal

If a term in a contract is rendered void by statute:

a. the validity or otherwise of the remainder of the
contract and of subsequent transactions depends upon
the intent of the statute
b. only the term in question is void, and the remainder of the
contract is valid
c. subsequent transactions directly related to the void term
are themselves rendered void
d. the whole contract is void

Which of the following statements is the best description of 'non est factum'?
a. both parties have made the same mistake about the existence or identity of the subject matter of the contract
b. both parties are mistaken about a material fact that is important to the subject matter of the contract
c. one of the parties' to a contract is mistaken as to the nature of the document which they have signed
d. one of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party
takes advantage of this mistake
Which of the following statements is the best description of a 'condition'?
a. a term in a contract which must be satisfied before a contract can come into existence
b. a term in a contract which provides that the contract will terminate on the happening of a particular event
c. a term in a contract, the consequence of breach of which cannot be determined until after the breach has occurred and
the seriousness of the effects of the breach cab be ascertained
d. a term in a contract, non-performance of which may result in a rescission of the contract and/or damages to
the plaintiff
Which of the following statements is the best description of a 'warranty'?

a. a term in a contract which provides that the contract will terminate on the happening of a particular event
b. a term which must be satisfied before a contract can come into existence
c. a term in a contract not essential to the main purpose of the contract, non-performance of which will not entitle
the plaintiff to rescind the contract
d. a term in a contract, non-performance of which may result in a rescission of the contract and/or damages to the plaintiff

The most significant difference between a 'void' contract and an 'illegal' contract is that:
a. money paid or property transferred under a void contract may be irrecoverable
b. illegal contracts carry penalties for violation
c. money paid or property transferred under an illegal contract may be irrecoverable
d. a void contract will not be enforced by courts

When is a particular statement more likely to be a term of the contract than a mere representation?
a. the statement was made with the intention of preventing the other party from finding any defects
b. both parties placed considerable importance on the statement
c. the other party was asked to check over and verify the statement
d. a long time has passed between the making of the statement and the final agreement

Which of the following restraint of trade would NOT be likely to be valid?

a. a restraint upon a solicitor from carrying on a business in the same city for one year after the sale of the practice
b. a restraint upon a vendor of a business from carrying on a similar business within the same district in the next 3 years
c. a restraint upon a vendor of a business from carrying on a similar business anywhere for the rest of his life
d. a restraint upon an employee from divulging trade secrets

Which of the following statements is the best description of an 'innocent' misrepresentation?

a. a false statement of fact made carelessly, which the other person relies upon and suffers loss
b. all of the options
c. a false statement of fact made with the belief that it is true, which the other person relies upon and suffers loss
d. a false statement of fact made knowingly, which the other person relies upon and suffers loss

Which of the following statements is the best description of 'undue influence'?

a. the improper use of a position of influence or power to induce a contract

b. the improper use of violence to induce a contract
c. all of the options
d. the improper use of superior bargaining position to induce a contract

Which of the following statements is the best description of 'unconscionability'?

a. the improper use of position of influence or power to induce a contract
b. the improper use of a superior bargaining position to induce a contract
c. the improper use of violence and threats of violence to induce a contract
d. all of the options

In which of the following cases did the court decide that provided a restraint of trade clause is reasonable it will
not be void and unenforceable?
a. Anderson Ltd v Daniel
b. Public Service Employees Credit Union Cooperative Ltd v Champion
c. Parkinson v College of Ambulance Ltd
d. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd

Which of the following situations appear to involve 'undue influence'?

a. a woman gave all of her property to the religious order of which she was a member
b. an elderly Italian couple sign a mortgage in favour of a bank guaranteeing their son's debt, the bank manager knows
the couple are unaware of the son's financial difficulties
c. all of the options
d. a man induces another to sign a contract by telling him that if he did not, he would report his son to the police for
committing a criminal offence

A clause in a contract which provides that in the event of a dispute neither party may use the court system to resolve
the dispute is:
illegal at common law
referred to as a 'restraint of trade' clause
void at common law
by its very nature incapable of being enforced by the courts
In Commercial Bank of Australia v Amadio which of the following was NOT a reason why the bank was considered to
have acted unconsionably?
the bank was in a superior bargaining position and hence the Amadios were in a weaker bargaining position
the bank exercised economic duress
the bank took advantage of the Amadios' special disabilities
the bank did not explain the real financial position of the son whom his parents were trying to help

A restraint of trade contract will be void if:

the geographical extend of the restraint is too wide
any of the options
the time for which the restraint is to apply is too long
the restraint does not apply to a proprietary interest of the person applying the restraint
In which of the following situations is the plaintiff least likely to succeed in claiming unconscionability on the part of
the defendant?

the plaintiff was elderly

the plaintiff was illiterate
the plaintiff sought independent legal advice
the language of the transaction was complex