Decent Essays
Commercial Law
Some Revision Questions from Past Exam Papers
X Ltd imported television sets from Taiwan where they were manufactured by the Taiwan Toy Company. The Taiwan Toy Company has an excellent worldwide reputation for producing high quality, very safe products. One of the television sets developed an electrical fault when being shipped to Australia. The fault could only have been detected if every television set was individually tested by X Ltd.
X Ltd sold the television as one of a consignment to the SupaTV Discount Store, which has now gone into liquidation. Before it went into liquidation SupaTV sold the faulty television to the ABC Advertising Company. ABC used the television set for making presentations to its
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Unfortunately Tartan’s business has not been very successful. The company’s audit for the financial year ended 30 June 2000 revealed that the company had failed to make a trading profit. It further revealed that Tartan’s liabilities were three times its assets, and that it had been unable to pay its suppliers for the last six months. However, these matters were barely discussed at the director’s meeting which immediately followed the audit reports. Instead the directors resolved that the company borrow $2 million to purchase more tartan fabric.
Four weeks after borrowing the $2 million, the company was put into liquidation.
Discuss the liability of the directors.
Holly is a clothing designer and manufacturer. She sells her clothes by direct mail. In January she sent her 2008 catalogue by post to all her customers. One of the customers was Joyce. Joyce filled in the order form provided in the catalogue and posted it off on the 1st March. Joyce ordered three dresses marked at $50 each. Shortly afterwards Holly sent back a letter saying that Joyce’s three dress would be despatched in the next seven days, but that the price of each dress was $250. Unfortunately, the printer had made a mistake when printing the catalogue. Joyce doesn’t want the dresses at $250 each.
Which of the following is the most accurate statement? EXPLAIN your answer.
Holly is contractually bound to supply
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