ASSIGNMENT QUESTIONS -
Question 1 -
Booth, a merchant banker, paid his friend Hains, a director of several Australian listed companies, $18,000 for "inside information" which he intended to use in determining how to invest his client's funds. Insider trading is a criminal offence pursuant to the Corporations Act 2001 (Cth), s 100G. Hains has since failed to provide any information to Booth and has indicated that he has no intention of ever doing so.
Advise Booth as to whether he can recover the $18,000 already paid.
Questions to consider in answering Question 1:
What is the purpose of the contract?
Is it contrary to public policy?
Does it fall within one of the classes of contract illegal at common law?
Will Booth be able to recover his money?
Are the parties in "in pari delicto"?
Question 2 -
In 1957 Nestlé had a promotion under which it sold hit singles for 1s 6d plus three Nestlé chocolate wrappers. The copyright holder sued Nestlé for royalties based on the "ordinary retail selling price" of the goods under s 8 of the Copyright Act 1986 (UK). Nestlé argued that the royalty should be based on 1s 6d only. The copyright holder accordingly alleged that the royalty should be based on 1s 6d plus the value of the wrappers since they comprised part of the consideration for the record.
Who was right?
Questions to consider for Question 2:
Is there consideration present?
If there is consideration present, does it have some value that the law will recognise?
Does the consideration need to be adequate as well as have some value?
See Chappell & Co Ltd v Nestle Co Ltd where Lord Sommerville remarked that (at 114) "...a contracting party can stipulate for what consideration he chooses. A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn."
Assessment Criteria -
- Written presentation
- Identify the issues of the problem
- Explain the relevant law relating to the problem
- Discuss the potential legal arguments relating to the problem
- Summarise a balanced conclusion to the issues of the problem