Question 1

Which of the following scenarios is the best description of an invalid restraint on trade?

Accepted Answer

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

Question 2

In which of the following cases did the court decide that an agreement not to report the commission of an indictable offence was illegal at common law and therefore void?

Accepted Answer

A) Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42. 
B) Public Service Employees Credit Union Cooperative Ltd v Campion (1984)56 ACTR 39. 
C) St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267. 
D) Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535. 
A) Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42. 
B) Public Service Employees Credit Union Cooperative Ltd v Campion (1984)56 ACTR 39. 
C) St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267. 
D) Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535. B

Question 3

If a contract is found to be illegal at the time of its creation,it will be:

Accepted Answer

A) valid and enforceable. 
B) valid but unenforceable. 
C) valid but voidable. 
D) void and unenforceable. 
A) valid and enforceable. 
B) valid but unenforceable. 
C) valid but voidable. 
D) void and unenforceable. D

Question 4

It is important to understand the differences between illegal and void contracts because:

Accepted Answer

A) they may have different statutory and common law consequences. 
B) they form legal contracts. 
C) they belong to identical contract categories. 
D) all of the above. 
A) they may have different statutory and common law consequences. 
B) they form legal contracts. 
C) they belong to identical contract categories. 
D) all of the above.

Question 5

At common law,contracts in restraint of trade are generally unenforceable because they:

Accepted Answer

A) discourage industry and enterprise and reduce competition. 
B) injure one of the parties by reducing their means of earning a livelihood. 
C) deprive the public of the services of one of the parties. 
D) all of the above. 
A) discourage industry and enterprise and reduce competition. 
B) injure one of the parties by reducing their means of earning a livelihood. 
C) deprive the public of the services of one of the parties. 
D) all of the above.

Question 6

The decision in A Schroeder Music Publishing Co Ltd v Macauley [1974] 1 WLR 1308 was based on the fact that:

Accepted Answer

A) the restraint of trade clause was an unreasonable exercise of the employer's superior bargaining power. 
B) the restraint of trade clause was a reasonable protection of the employer's proprietary interest. 
C) the restraint of trade clause was imposed merely to restrict competition. 
D) arms length bargaining with legal advice on both sides meant there was no inequality of bargaining power. 
A) the restraint of trade clause was an unreasonable exercise of the employer's superior bargaining power. 
B) the restraint of trade clause was a reasonable protection of the employer's proprietary interest. 
C) the restraint of trade clause was imposed merely to restrict competition. 
D) arms length bargaining with legal advice on both sides meant there was no inequality of bargaining power.

Question 7

The decision in Forster & Sons Ltd v Suggett (1918)35 TLR 87 was based on the fact that:

Accepted Answer

A) the restraint of trade clause was an unreasonable exercise of the employer's superior bargaining power. 
B) the restraint of trade clause was a reasonable protection of the employer's proprietary interest. 
C) the restraint of trade clause was imposed merely to restrict competition. 
D) arms length bargaining with legal advice on both sides meant there was no inequality of bargaining power. 
A) the restraint of trade clause was an unreasonable exercise of the employer's superior bargaining power. 
B) the restraint of trade clause was a reasonable protection of the employer's proprietary interest. 
C) the restraint of trade clause was imposed merely to restrict competition. 
D) arms length bargaining with legal advice on both sides meant there was no inequality of bargaining power.

Question 8

A contract that is legal when it is formed but performed in an illegal manner may be:

Accepted Answer

A) valid but unenforceable. 
B) valid and enforceable. 
C) valid but voidable. 
D) void and unenforceable. 
A) valid but unenforceable. 
B) valid and enforceable. 
C) valid but voidable. 
D) void and unenforceable.

Question 9

In the event of a dispute,a contract clause may refer the parties to arbitration.

Accepted Answer

A) True 
 B)False

Question 10

How can the court's willingness to declare a contract illegal or void at common law be reconciled with the courts' determination to respect the notion of 'freedom of contract'?

Accepted Answer

The court's willingness to declare a con

Question 11

A term in a contract that attempts to exclude the implied terms of the Australian Consumer Law is void and unenforceable.

Accepted Answer

A) True 
 B)False

Question 12

When a contract is legal at its creation but subsequently becomes illegal:

Accepted Answer

A) remedies are never available to the guilty party. 
B) remedies are available to the guilty party as long as the innocent party receives their remedies first. 
C) remedies are sometimes available to the guilty party. 
D) remedies are always available to the guilty party. 
A) remedies are never available to the guilty party. 
B) remedies are available to the guilty party as long as the innocent party receives their remedies first. 
C) remedies are sometimes available to the guilty party. 
D) remedies are always available to the guilty party.

Question 13

In which of the following cases did the court decide that the contract was valid but illegal as performed?

Accepted Answer

A) St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267. 
B) Pham v.Doan [2005] NSWSC 201. 
C) Anderson Ltd v Daniel [1924] 1 KB 138. 
D) Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42. 
A) St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267. 
B) Pham v.Doan [2005] NSWSC 201. 
C) Anderson Ltd v Daniel [1924] 1 KB 138. 
D) Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42.

Question 14

The primary distinction made between a 'void' contract and an 'illegal' contract is that:

Accepted Answer

A) money paid or property transferred under a void contract may be irrecoverable. 
B) money paid or property transferred under an illegal contract may be irrecoverable. 
C) illegal contracts carry penalties for violation. 
D) a void contract will not be enforced by the courts. 
A) money paid or property transferred under a void contract may be irrecoverable. 
B) money paid or property transferred under an illegal contract may be irrecoverable. 
C) illegal contracts carry penalties for violation. 
D) a void contract will not be enforced by the courts.

Question 15

An employee in possession of secret information belonging to their employer is under a duty to keep it secret.

Accepted Answer

A) True 
 B)False

Question 16

Discuss the factors that determine whether a restraint of trade is reasonable.

Accepted Answer

Factors that are taken into account in d

Question 17

Which of the following factors are relevant to the validity of a restraint of trade clause in a contract of employment?

Accepted Answer

A) Whether the employee has acquired skills or information belonging to their employer. 
B) The relative bargaining powers of the parties. 
C) The area and duration of the restraint. 
D) All of the above. 
A) Whether the employee has acquired skills or information belonging to their employer. 
B) The relative bargaining powers of the parties. 
C) The area and duration of the restraint. 
D) All of the above.

Question 18

Contracts in restraint of trade are regarded as prima facie void.

Accepted Answer

A) True 
 B)False

Question 19

Contracts that are binding in honour only but attempt to oust the jurisdiction of the Courts are valid.

Accepted Answer

A) True 
 B)False

Question 20

A clause in a contract which provides that the courts may not be used to resolve any disputes between the parties is:

Accepted Answer

A) void at common law. 
B) illegal at common law. 
C) referred to as a 'restraint of trade' clause. 
D) by its very nature incapable of being enforced by the courts. 
A) void at common law. 
B) illegal at common law. 
C) referred to as a 'restraint of trade' clause. 
D) by its very nature incapable of being enforced by the courts.

Exam 12: Is the Contract Legal

Which of the following scenarios is the best description of an invalid restraint on trade?

In which of the following cases did the court decide that an agreement not to report the commission of an indictable offence was illegal at common law and therefore void?

If a contract is found to be illegal at the time of its creation,it will be:

It is important to understand the differences between illegal and void contracts because:

At common law,contracts in restraint of trade are generally unenforceable because they:

The decision in A Schroeder Music Publishing Co Ltd v Macauley [1974] 1 WLR 1308 was based on the fact that:

The decision in Forster & Sons Ltd v Suggett (1918)35 TLR 87 was based on the fact that:

A contract that is legal when it is formed but performed in an illegal manner may be:

In the event of a dispute,a contract clause may refer the parties to arbitration.

How can the court's willingness to declare a contract illegal or void at common law be reconciled with the courts' determination to respect the notion of 'freedom of contract'?

A term in a contract that attempts to exclude the implied terms of the Australian Consumer Law is void and unenforceable.

When a contract is legal at its creation but subsequently becomes illegal:

In which of the following cases did the court decide that the contract was valid but illegal as performed?

The primary distinction made between a 'void' contract and an 'illegal' contract is that:

An employee in possession of secret information belonging to their employer is under a duty to keep it secret.

Discuss the factors that determine whether a restraint of trade is reasonable.

Which of the following factors are relevant to the validity of a restraint of trade clause in a contract of employment?

Contracts in restraint of trade are regarded as prima facie void.

Contracts that are binding in honour only but attempt to oust the jurisdiction of the Courts are valid.

A clause in a contract which provides that the courts may not be used to resolve any disputes between the parties is:

Legal Foundations

Legal Systems

How Law Is Made: Precedentstatute Law

Civil Liability: the Law of Torts and Negligence

Applications of Negligence to Business

Introduction to Contracts

Agreement Between the Parties

Intention to Create Legal Relations

Consideration

Capacity of the Parties

Genuine Consent

Terms of the Contract

Rights and Liabilities of the Parties,discharge and Remedies

Remedies in Contract

Statutory Consumer Guarantees and the Australian Consumer Law

General and Specific Consumer Protections Under the Acl

Introduction to Companies and Incorporated Associations

Agency

Partnerships

Choosing a Business Entity

Other Business-Related Torts

Insurance

Sale of Goodsbusiness to Business

Property and Mortgages

Intellectual Property

Ethics and Business Practice

Criminal Law in a Business Context

Competition Law

Insolvency and Debt Recovery

The Work Environment and the Employment Relationship

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