LAW 204 and LAWS 104 CONTRACTS

Notice to Students Final Exam

This information is given to students as guidance to preparation for the final exam.

General

The final exam is a formal sit-down open book exam of 3 hours duration plus 10
minutes reading time (during which notes may not be made on the exam paper).
The exam represents 60% of the final mark for the unit.

The exam paper must not be taken away by students. All answers are to be
written in the same exam booklet, with students clearly identifying the question
(or part thereof) they are answering. Students may ask the invigilator for a
further booklet if necessary. Indicate clearly in the second booklet which question
is being included or continued.

Since this is an open book exam, students may bring in any materials except MQ
University library books. The notes that students are permitted to bring into the
exam room includes typed as well as handwritten notes. There is no limit to the
amount of books or notes that may be brought in, and students are to take those
notes with them when they leave the exam room. Dictionaries are allowed.

It is university policy that no bags of any kind will be allowed into the exam room.
Students will have to carry into the exam room only those materials that are
allowed for exam purposes, and all bags (containing personal items such as
mobile phones etc) must be left outside.

Cases need not be cited in the exam. Students should refer to cases in a
shorthand way for speed and convenience (eg Waltons v Maher or simply Carlill).
Statutes should be referred to by name once in each question (eg Frustrated
Contracts Act NSW) and thereafter in a shorthand manner (eg s 13 of the Act or s
13 of FCA).

Students should aim to bring into the exam room as little as possible. The main
items should be the text, lectures and notes prepared for the exam. It would be
ideal to have all the important areas of law reduced to single sheets with relevant
bullet points, cases etc for quick and easy reference.
1

Format
The exam paper will comprise five (5) questions. Students must attempt four (4)
questions only. Each question is worth 15 marks. Questions 1 4 will be made up of
hypothetical problem questions. In each of these, students must attempt the entire
question (which may be in two unrelated parts). Question 5 will offer an internal choice
of four essay or theoretical generic questions, of which students must answer only one
(if they choose to answer this question at all).
Material
As outlined in lectures and tutorials, all unit topics are examinable and eligible for
assessment by way of the final exam. This does not mean that every topic will necessarily
be in the final exam, although students are encouraged to prepare their own notes
(based on lectures and prescribed reading material) highlighting the key legal tests, cases
and provisions that need to be met. These notes can serve as the basis for law to be
explained and applied in the hypothetical problems, but also as the basis for essay
questions as well.
For hypothetical problem questions, the basic outline of the legal problem solving model
(issue, law, application, conclusion) is a recommended and reliable approach.

Specimen Question (Hypothetical)

Below is a hypothetical problem question from the Tutorial Program and a guidance
answer (not a model answer) as a guide to the style and nature of the hypothetical
problem questions that students may expect in the final exam. Some questions may
involve more than one legal issue.

Sally offered to sell to Betty that unsigned painting which you have always liked. It was
agreed that the price for the painting of $1,000 included Sallys costs of having it cleaned
and restored. The restorer discovered that there was another painting beneath the one
which was the subject of the sale, which turned out to have been painted by a famous
French impressionist painter and was worth approximately $1million.
Sally claims that she does not have to deliver the painting to Betty on the ground that the
contract between them is either void ab initio or voidable.
Betty seeks your advice as to whether Sallys claim is correct.
2

Guide to Solution

This problem invites consideration of the principles of mistake both at common law and
in equity. On the basis that both parties assumed the subject matter of the sale was the
cheap unsigned painting and not any valuable masterpiece, it appears that Sallys claim is
to be based upon the principles of common mistake. Several issues are then relevant.
To have the contract declared void she would need to argue there was a common
mistake by the parties about a material fact. This may be difficult because the mistake
seems to be about an attribute of the subject matter of the contract, namely its value.
Perhaps she could argue, in line with the reasoning in Associated Japanese Bank v Credit
du Nord, that there was a breach of an implied condition precedent, for example that the
painting was not painted by anyone famous or that it contained only one piece of work.
In the light of cases such as Bell v Lever Bros and Great Peace Shipping v Tsavliris it appears
the contract is not void ab initio as the mistake is one only as to the nature or value of the
subject matter of the contract and not one as to the existence of the subject matter.
Refer also to Leaf v International Galleries.
It is then arguable that the contract could be voidable in equity pursuant to the principles
in Solle v Butcher. Equitable mistake would require proof that a common mistake was
made about a fundamental material fact, that no party was at fault, and that it would be
unconscionable to enforce the contract. The facts of this hypothetical could support such
an argument.
However, in light of the Great Peace Shipping case, which over-ruled Solle v Butcher, it is
clear that rescission of a contract in equity for common mistake is no longer possible, at
least in English law. The Queensland Court of Appeal endorsed the Great Peace Shipping
decision in Australian Estates v Cairns City Council. However, in the first instance decision
in New South Wales of Classic International v Lagos, the principles in Solle v Butcher were
applied and a rescission of a contract for common mistake was upheld.
If the transaction occurred in NSW, it would seem at present that equitable mistake may
assist Betty in avoiding the sale.

Specimen Questions (Essay)

Below are two specimen essay questions as a guide to the style and nature of the essay
or theoretical questions that students may expect in the fifth question of the final
exam.

1
In the late nineteenth century, Sir Frederick Pollock wrote that [a]n act or forbearance
of one party, or promise thereof, is the price for which the promise of the other is
bought, and the promise thus given for value is enforceable. How would you express
this statement in contemporary Australian English, and does it provide a sound basis for
a working definition of consideration?
2
Empirical research has shown that lawyers and business people have divergent interests
in the making of contracts. How would you describe the main differences, and what in
your view does this say about the role of contract law in contract practice?

Ilija Vickovich
Unit Convenor
21 May 2014