Posted: September 2nd, 2015

Rights and liabilities.

James Chung, a 17 year old Accounting student at Sydney La Trobe University, buys a second hand motor car. As there is no public transport from his home to the university he needs the car in order to attend lectures. The car has a radio but no stereo sound system. Because he would like to listen to his favourite CD collection while driving, he approaches Car Hi Fi and buys a stereo sound system. He signs an agreement with Car Hi Fi stating that price will be paid in three (3) instalments of $500 each. James pays the first two instalments and fails to pay the final instalment.

Scenario 2 (7 Marks)

James, who recently turned 18, drives his car to Sydney CBD. He parks at a privately run car park. A sign displayed at the car park entrance reads:

‘Cars parked at owners’ risk’.

The clause printed at the back of the parking ticket reads:

‘Management is not liable for any loss arising from theft or other damage however caused’.

On James’s return, he discovers the stereo sound system equipment is missing. The parking lot management denies liability.

Scenario 3 (6 marks)

James is experiencing financial difficulties and asks Rose, his aunt, whether he could paint her house for $2000. Rose agrees. After James finishes painting the house, Rose tells him she is very satisfied with his work but refuses to pay him. Rose tells James that she does not have to pay him because they are relatives and that James’s father owes her $2000 for money she lent him two years ago


Advise James of his rights and liabilities, if any, under the law of contract in the three scenarios.

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