AN INTRODUCTION TO STUDYING LAW UNITS

How to approach assessment tasks

1. Approaching the hypothetical legal problem
One of the most common forms of assessment of law units is to ask students to unravel hypothetical legal
problems. Generally speaking, you are given a story to read which ends badly (or less well) for one or more
of the parties. Your task is (usually) to “advise” the parties or “discuss” their rights and obligations. Your
advice (or the legal discussion) must be based on the law (cases or legislation). For this reason, from the
start of the course, you are “invited” to read legal cases (or, more correctly, summaries of legal cases) and
legislation. If you absorb the lessons of the first topic, you will appreciate the significance of case law in a
common law legal system – in a nutshell, precedents matter!
Therefore, before you can unravel a legal hypothetical (for a tutorial or for a piece of assessment or
to enable you to participate actively in lectures), you should be familiar with the cases. In this instance,
“familiar” means you need to know what happened (the facts), what the outcome was (the decision) and
the reason for that decision (the legal principle or ratio decidendi). Therefore, in practical terms, to “read”
a case properly you should:
▶ identify the material (relevant) facts;
▶ identify the legal issue(s) that arise from those facts (is the question about the duty of care of
occupiers or insolvent trading and directors’ duties or remedies available for breach of the consumer
guarantees?);
▶ make the argument that each side would have made (in every case, there is a reasonable argument to
be made by each side (no-one goes to court (especially an appeal court) without a chance of success));
▶ note what decision the court reached; and
▶ note the reasoning of the court (the legal principle or “ratio decidendi”).
Having studied the cases in this way, the next question is how to approach the hypothetical problem
itself. First, you read the story carefully. Be clear about what has happened. Then identify the legal issue(s)
raised in the story. Once you have isolated the issue(s) you need to discuss/explain the relevant law or legal
principles referring, wherever possible, to the source (cases and/or legislation) of the law. Finally, and most
importantly, you must apply that law to the facts and come to a conclusion about the rights and obligations
of the parties.
Provided, in the course of your answer, you touch these bases (identifying the issues, discussing the law
and applying the law to the facts), the precise path you follow and the writing style is a matter for you.
You may choose to start at the beginning (“There are three relevant issues to discuss. The first is…”), or
you may prefer to start with your conclusion and work backwards (“I believe that X is liable for breach
of contract for the following reasons…”) – the important thing is that your “advice” is clear, logical and
well-supported.

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2. Writing tips
Whilst we encourage you to find your own voice, the following tips will ensure you are not singing
off-key:
1. Plan your answer. A  well-planned, well-structured answer will always do better than one that
“spontaneously arises” or is the product of a “stream of consciousness”. If your answer lacks plan-
ning and structure, it is more likely to contain irrelevant or illogical material.
2. Canvas all the relevant issues, not simply the major one. Marks are allocated for each relevant
issue so make sure you give proportionate time to each one. At the same time, you should resist the
“shopping list” approach to answering questions – covering every aspect of the law on a particular
point because of a fear you may leave something out. Be brave: stay relevant.
3. Don’t repeat or rewrite the question. This is a waste of time for which no marks are given. Instead,
a brief introduction setting the scene is a useful device – it gets you off to a good start and indicates
to the examiner where you are heading. It need only be brief. For example, “I am asked to advise
P whether he has any rights against the partnership. In order to do this it is necessary to (a) decide
when the partnership began; (b) identify the partnership property; (c) decide when the partnership
came to an end; and (d) decide whether appropriate notice of dissolution was given”.
4. Explain yourself. Ensure that you support your propositional statements (“this action constitutes a
breach of contract” or “there is a breach of the duty of care” or “this constitutes a breach of s 18”)
with evidence. To insert the conjunction “because…” is a useful strategy which ensures you explain
your bold propositions.
5. Don’t include too much information. In particular, when discussing relevant precedents do not
include a summary of the facts of the cases. If there is a critical fact or two, state it concisely and
move on to the argument or analysis. There is never a need for a case summary.
6. Objective advice. In most hypothetical problem questions, you are asked to “advise”. This should
be done “objectively”; you are not usually being asked to be an advocate for one party. Provide an
answer that considers both sides and comes to a reasoned conclusion, even if it is not what your
client would like to hear!
7. Write good English. Be clear and concise. Do not overwrite and do not use words just because you
think they sound “lawyerly”. Good lawyers (and, a fortiori, good, non-law undergraduate students)
write and speak in plain English: they do not use words like “aforementioned”, they do not use
Latin and they know that only the Marx Bros say “the party of the first part alleges that the party
of the second part….”. Grammar and spelling are important so do the very best you can.

3. Worked examples
To help you appreciate that there is no great mystery to it, we provide answer guides to three legal
hypotheticals.

Question 1
Best Guys Pty Ltd, an electrical goods retailer, advertised a range of specials in the newspaper including
this one:
“NEVER TO BE REPEATED OFFERS ON FAMOUS BRAND 65” 4K Ultra HD LED LCD Smart
TV…ready to go from $3500”

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On Wednesday September 19, Ben saw the advertisement and decided he would buy one. He immediately
went down to the store near his home, walked over to Mary, the sales manager, and said that he accepted
the store’s offer, would pay now and take it home in the ute.
However, Mary told him to slow down. “Unfortunately, we are completely out of stock”, she said. She
then said, “The only similar television that I have left is the demonstration model, and you can have that
for $2,000. Not a bad price as they usually sell for around $3,000”.
Ben was very annoyed, believing that he already had made a contract with the store. Nevertheless, he
said that he would think about her offer. Then Mary said, “Look, I’ll hold it for you for two days. Here’s
my business card – just ring or email me with your decision before Friday at noon”. Ben mumbled agree-
ment and left the shop.
The next day (Thursday), Jessie walked into the store and fell in love with the same demonstration
model. Mary said it was “on hold” but when Jessie offered to buy it for $3,000. Mary decided that it was
better (for her) to get a certain sale and sold it to Jessie on the spot.
On Friday morning, at 10.00 am, Ben, who had stopped sulking, emailed Mary, advising her that he
would buy the demonstration model. “I’ll pay for it and pick it up after work”, he wrote. When Mary saw
the email, she immediately rang him and told him that it had been sold. Ben is now enraged and seeks your
advice as to whether he had an enforceable agreement or an option contract with Best Guys Pty Ltd on the
Wednesday or an enforceable agreement on the Friday.

Suggested answer guide

Introductory paragraph. For an enforceable agreement to occur, there must be an offer and an acceptance
of that offer. The main issue in this question is whether Ben and Mary (as the agent of BG) have made an
enforceable agreement either on Wednesday (when Ben visited the store) or on Friday (when he rang and
“accepted” the offer). If Ben is to succeed, he must prove on the balance of probabilities that, either on
Wednesday or on Friday, NP/Mary made an offer that he accepted.
The events of Wednesday. The issue here is whether an enforceable agreement was made on Wednesday
and, if not, whether an option contract was made. For an agreement to have been made, it is necessary to
characterize the advertisement that appeared in the brochure as an offer capable of acceptance and not an
invitation to treat. To be an offer, there must be certainty as to the main terms and an indication, on the
part of the offeror, that, if the person to whom the offer is directed (the offeree) accepts, an enforceable
agreement will be made. An invitation to treat, on the other hand, is an indication that the party is open to
negotiations, open to receiving an offer. The test is an objective one: in the light of all the circumstances,
would a reasonable person regard this particular advertisement as an offer?
There are two considerations that may make it hard for Ben to argue that this is an “offer”. First,
although it is not impossible for an advertisement to be regarded as an offer – see, for example, Carlill’s
case – the common law (the courts) has generally regarded advertisements as invitations to treat only: see,
for example, Harvey v Facey, Partridge v Crittenden and Boots’ case. As the court said in Boots, it would
be commercially inconvenient if an advertisement for the sale of goods or, as in Boots, the display of goods
were to be regarded as an offer to sell to whomsoever “accepts”. If this were to be the position here, there
would be a contract at the moment Ben “accepted” the offer and, in theory at least, if BG could not able to
deliver the goods at that time, it would be in breach.
Second, the wording of the advertisement itself is couched in general terms (no mention of a particular
brand and no firm price is mentioned) so it is unlikely to be regarded as certain enough to be regarded as

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an offer. The use of the word “offer” is not conclusive – it depends how a reasonable person would regard
the advertisement as a whole: see, for example, Schuler v Wickman Tools. Carlill can be distinguished
because the company went one step further than BG – it made a specific promise to reward anyone who
contracted the flu after using the smoke ball as directed and it placed money in the Alliance Bank “to
show its sincerity in the matter”. For these reasons, the advertisement should be regarded as an invitation
to treat.
Ben’s “acceptance” is therefore, in fact, an “offer” (to purchase the television). In effect, he is offering to
purchase the television on the terms he has outlined. At this point, Mary responds by offering to sell him a
demo model for $2,000. How do we characterize this response? It is neither a rejection nor an acceptance
of the offer – it is a counter-offer, defined and exemplified in cases such as Harvey v Facey, as an offer from
the offeree in response to the original offer. The effect of the counter-offer is to “kill off” the original offer
and leaves the ball in the court of the other party.
In this scenario, Mary, appreciating that Ben is undecided (about whether he already has a contract
and whether he should buy the demo model), takes a very important step: she promises to keep her offer
(to sell him the demo model) open until Friday at noon. The legal question is whether Mary’s promise
to keep this offer open is enforceable (as an “option”) or is a gratuitous (and therefore unenforceable)
promise? An option gives the option holder a right to purchase at a later time but, in order for it to be
regarded as an option, Ben must have provided some value (i.e. “consideration”) to Mary, in exchange
for the promise to keep the offer open. This is the key to understanding the decision in Goldsbrough
Mort. Unfortunately for Ben, as he has not provided any consideration to Mary for her promise, there is
no enforceable agreement and no option contract concluded on the Wednesday.
The events of Friday. The question now is whether an agreement was made when Ben purported to accept
Mary’s offer on Friday at 10.00 am. The crucial issue is whether, after Mary sold the television to Jessie,
the offer was still on the table. The rule is that an offer will lapse when any time limits have expired (in
this case, noon on Friday) or when it is revoked. An offer can be revoked at any time before acceptance
but revocation is not effective until communicated to the offeree: Byrne v Van Tienhoven. Therefore, until
Mary informs Ben that she has sold the television to Jessie (ie has revoked her offer), he is in a position
to accept her offer. And this he does when he emails his acceptance at 10.00 am (well before the noon
deadline).
Conclusion. Although no agreement (or option contract) was concluded on Wednesday September 19,
an agreement was concluded on Friday at 10.00 am. In not being able to deliver the television, BG
has breached that contract. Ben is entitled to damages to compensate him for the losses (if any) he has
suffered.

Question 2
Sally Bowles owns and operates a very successful song and dance club called the Kit Kat Klub. One evening,
her sophisticated sound system breaks down. She contracts with a sound technician, Cliff Bradshaw, to
repair it. The faulty parts of the system have to be taken to his workshop but he promises that he will return
the next day and have the system up and running so that she will not have to close the club. Unfortunately,
because of Cliff’s carelessness, and lack of punctuality, the sound system is not returned for three days.
Sally looks but is unable to find a substitute system so she has no choice but to close the club for those three
nights. She now seeks compensation for the lost profits (approximately $6,500) for the first two nights she
had to close the club. On the third night, she had contracted with Cosmo Brown, a famous American tap
dancer, to perform and expected to earn an additional $15,000 profit from his appearance. Cliff was not
aware that Cosmo was appearing at the Kit Kat Klub. Sally is also seeking damages to compensate her for

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the embarrassment she has suffered as a result of having to cancel the contract with Cosmo and disappoint
his many fans.
Please advise Sally whether you believe she would succeed in her claims for damages against Cliff.

Suggested answer guide

Introductory paragraph. The issue in this question concerns whether Sally is entitled to claim damages
from Cliff. At the outset, it should be noted that the aim or objective of an award of damages for breach of
a contractual term is to place the plaintiff in the position he or she would have been in if the contract had
been performed as expected. These are called expectation losses: Robinson v Harman.
The claim for compensation for loss of profits. In order to be awarded damages for the breach, Sally has
to establish (a) there is a causal link between Cliff’s breach of contract (not returning the sound system as
promised) and her losses and (b) the damages are not too remote from the breach. Here causation is not
an issue: it is clear that “but for” the breach the loss would not have occurred. In terms of remoteness,
Sally must prove that the damages are a reasonably foreseeable result of the breach. Reasonable forsee-
ability is usually considered under the two limbs of Hadley v Baxendale. The first limb concerns losses
that are reasonably foreseeable because they are losses that “arise naturally” or “in the ordinary course
of things”: Victoria Laundry and Parsons. The loss of profit for the first two nights ($6,500) would come
under this limb.
The claim for the losses arising from the cancellation of Cosmo’s performance is different. It may not be
a “first limb” claim (it is not a loss arising naturally because a reasonable person would not expect such a
famous person to be appearing on that night), so it would only be recoverable if it comes under the “second
limb” (actual notice of the particular loss that might be suffered in the event of a breach has been given to
the defendant). There is no evidence that Sally gave Cliff actual notice of the special performance, so it is
unlikely she would be able to recover the $15,000 “super-profit”. Nevertheless, she may be able to claim
the ordinary or natural losses that resulted from the cancellation on the third night.

The claim for compensation for her disappointment and embarrassment. Sally also claims damages to
compensate her for the embarrassment and disappointment she suffered as a result of the breach. There
is no doubting the genuine and authentic nature of Sally’s response when she had to close the Club. The
question is whether she can claim damages to compensate her. In law, possibly because the courts have
not wanted to deal with “hurt feelings”, damages are not generally recoverable for the disappointment,
embarrassment or anger, however genuine, that a plaintiff suffers as a result of a breach. The exceptions
to this rule are where the contract itself is for entertainment or enjoyment (see Dillon or a ski holiday
(see Jarvis)). In these instances, a plaintiff may be compensated. However, as the contract between Cosmo
and Sally was a strictly commercial deal (one that gave pleasure or enjoyment to others), it is unlikely she
will be compensated.

Duty to mitigate. A plaintiff must try to reduce or mitigate the loss that he or she suffered as a consequence
of the breach. It is only necessary to do what is reasonable to try to reduce the lossess but if this is not
done, the damages awarded to the plaintiff will be reduced: Payzu. In this instance, we are told that Sally
did look for a substitute system so it is likely she did enough to try to mitigate her losses. Her damages
would not be reduced.

Conclusion. In conclusion, it is likely that Sally’s claim for loss of profits would be partially successful but
her claim for compensation for her disappointment would fail. Any award would not be reduced because
of a failure to mitigate her losses.

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Question 3
Soon after the same Kit Kat Club reopens, there are more than 200 patrons out on the dance floor. Don
Lockwood is one of them. It is his first night at the Kit Kat Klub. He enters the club the same way every-
body does – walked in the main door and pays $20 to the cashier in the foyer and receives his ticket. He
does not notice the large sign above the entrance door that says in very large, clear print:
“Neither the Kit Kat Club nor its owners, employees or agents will be liable for any loss or
damage to patrons, or their property, howsoever caused, including negligence and/or breach of
contract”.
Don is having the time of his life as he always does when he comes to the Kit Kat Club when all of a sud-
den, without warning, the floorboards give way and Don falls 3 m to the ground below. He breaks his leg
and several ribs and is severely concussed. Sally is aware that the regulations stated that there should be no
more than 100 patrons on the dance floor at any one time but has long ignored that regulation. As a matter
of fact, Sally recently noticed that the boards were wearing dangerously thin in the central area but decided
to delay putting in a new floor until winter (a slow period for the Club). Don sues Sally for damages. Sally
seeks your advice about her liability under the law of contract.

Suggested answer guide

Introductory paragraph. The main issue in this question concerns the effect of the exclusion clause. There
are two main issues here – the first is whether the clause is in fact part of the contract; the second is to
interpret the words of the exclusion clause to determine if it protects Sally. It is worth noting at the outset
that the courts (and parliament) regard exclusion or limitation clauses with a healthy scepticism, particu-
larly when the contract, as here, is a non-commercial one, is not the product of a genuinely negotiated
agreement and where the clause is harsh or unusual in scope. In such cases, the courts will attempt to raise
the bar on incorporation and read down the words of the clause so as to limit its scope.
Has the exclusion clause been incorporated into the contract? Where a person signs a document that is
known to contain contractual terms they will normally be bound by the signature regardless of whether
they were aware of the terms. Where, as here, the document is not signed, the question is whether Sally
provided reasonable notice of the term. In order for the notice to be reasonable, notice of it must be pro-
vided before or at the time the contract was made. In Thornton and Olley, the defendants failed because
notice of the exclusion was not provided until after the contract was made (when the ticket was issued
in Thornton’s case and in the foyer of the hotel in Olley’s case). In this particular problem, the exclusion
clause was above the entrance door of the Club and was in large clear print and did not contain the harsh,
unusual or onerous terms that would have required something special by way of notice: Interfoto. In addi-
tion, because Don has been to the Club before, it will be easier to establish that a reasonable person would
have or should been aware of the clause. For these reasons, it is likely that a court would find that notice
was reasonable – the clause is incorporated into the contract
Does the exclusion clause protects Sally? Bearing in mind the point made earlier that the courts are hostile
to exclusion clauses (at least in consumer-type transactions) and interpret ambiguities or uncertainties
contra proferentum, we need to carefully consider the words of the clause. When interpreting contractual
terms, including exclusion clauses, the approach of the courts is to give effect to the objective intention of
the parties and to give the words their natural and ordinary meaning … not twist them in order to reach a
desired outcome. Here, the clause excludes liability “…for any loss or damage to patrons, or their property,
howsoever caused, including negligence and/or breach of contract”. In clearly excluding loss that arises as

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a result of breach of contract and negligence the clause has the effect of protecting Sally from any breaches
of contract (such as an implied term that the premises be reasonably safe) and for negligence (for breach
of a duty of care owed by an occupier to guests or visitors).
However, the law has long said that exclusion clauses will not normally be construed as limiting or
excluding liability for acts done that are well outside the terms or the scope or the “four corners” of the
contract, in the sense that the parties would not have contemplated the act. Such actions are sometimes
labelled fundamental breaches. There is no general rule that a fundamental breach cannot be protected by
a well-drafted exclusion clause. However, normally such acts would not be protected because, the courts
say, it would not have been consistent with the objective intention of the parties to exclude liability if
such an act were to occur. The courts are particularly concerned where such actions are carried out in the
context of consumer-type transactions (such as Sydney City Council v West where the act of the employee
in handing the keys of West’s car to a rogue was construed as outside the “four corners” of the contract)
rather than in commercial contracts (such as Photo Productions where the clause protected the defendant
from an act (lighting an unauthorized fire and burning down the factory) that was, on the face of it, a
fundamental breach). In this particular problem, we can ask whether the actions of Sally – in breaking the
building regulations (by over-crowding the dance floor) and ignoring the state of the floorboards (in what
might be described as a reckless manner) – has committed an act that goes beyond the four corners of the
contract and is therefore not protected by the exclusion clause. In this context, it is unlikely that her actions
are protected by the exclusion clause.

Approaching the research question

1. Introduction
As with any other piece of writing, a research paper must be logically structured and present a coherent
answer to the question. The answer must not be a simple summary of the material you have assembled –
you must demonstrate an understanding of the material and answer the question in a confident and indi-
vidual way. To do this, you must follow the following steps:
▶ Carefully consider and interpret the question – what is it I am expected to do?
▶ Research the topic and assemble relevant materials (some of which will be used but much of which
will not).
▶ Write a coherent and well-structured paper that shows to the reader/examiner that you have
understood the question and conducted your research thoroughly.

2. Consider and interpret the question

It is obviously a vital part of any essay to answer the question you have been asked. You need to be rig-
orous here – assess precisely what the question is about and answer it accordingly. Don’t simply identify
the general area of law (eg negligence) and summarise the relevant material. Sometimes, it helps to clarify
the topic if you re-form the question in your own words under the heading “what the question asks me to
do”, noting:
▶ Any statements or propositions in the question.
▶ Any implicit approach or angle that is expressed or implied in the question itself (eg there has been a
suggestion that s 18 of the Australian Consumer Law has gone too far …).

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