Part1: 40 marks

Q1: 20 marks
Contract Law 🡪 Offer or invitation to trade?
Like Cat Dog advertisement 🡪 offer or not 🡪
Is it a legally binding contract?
Acceptance? Is it still legally available for the creating a contract?
For the consideration, should the award be given?
🡪Smoke ball Case

Part2
Short question: 20 marks
1. Law vs ethics 10 marks
2. What is postal rule, the situation of acceptance? What is the exception? 5 marks
3. Source of Hong Kong Law 5 marks

Q2 15 marks
a) Agency Law 🡪 agency included in the contract 5 marks
b) Case about bribery 10 marks
1. There is a bribe or not
2. What is the law required?

Q3 25 marks
a) Misrepresentation 🡪 lying to people enter contract 🡪 legal advice 🡪 e.g., Judy 12
marks
b) Money laundering 🡪 Stages of laundering 8 marks
c) Concept of Bills of exchange 5 marks

Q4 20 marks
a) Employee laws 🡪 Pregnancy 5 marks
b) Case of contract law & sales of good ordinance 15 marks
🡪 Products have defect -🡪 exception cost

1. Contract law 20 marks

Offer 🡪 15marks
when offer is made by one party, and he is going to keep his/her promise of the offer.
Offer should be definite promise by the offeror to the offeree with an intention to be
bound by such promise without further negotiation.
It is a unilateral contract since they are showing the sincerity by doing it…. It is the
intention for A to keep the promise since they are fully preparing the reward for the
offeree.
In response to the specific action request made by offeror, offeree performed exactly
the requested act (which represented offeree accepted the offer by conduct).
Then, a binding contract arises at the same time at the moment the offeree
performed the requested act (i.e., acceptance by conduct)
Performance of contract remains outstanding unilaterally on an offeror when the
contracts forms. An offer may be communicated to a definite person, to some
definite class of persons or to the world at large e.g an advertisement.
Supporting case: (per Carlill vs. Carbolic Smoke Ball, 1893)
Postal Rules: 5 marks
Postal Rule: by which a contract is formed at the time of posting a properly stamped
and addressed letter (or use telegram) of acceptance even if the letter is lost in the
post where it is reasonable to use the post for offer and acceptance.
It is applicable to non-instant mode of communication methods
In addition, Letter or telegram are non-instantaneous communication methods.
Exception case:
1. Where actual communication to the offeror (or its authorized agent) is required
as specified in the offer.
2. the letter of acceptance is wrongly addressed or insufficiently stamped (offeree’s
fault)
3. It is “unreasonable” to use post for acceptance (e.g. offer made by phone/fax,
while acceptance through sending letter)
4. Not apply to communicate the offer withdrawal, which requires actual
communication to the offeree.

2. Law system 🡪 Source of Hong Kong law + Law vs ethics 15 marks

Source of HK laws:
1. Basic law 🡪 mini constitution: function as a constitution in Hong Kong which
other law could not contravene to basic law.
160 articles, 9 chapter, 3 Annex.
Article 8:
The laws previously in force in Hong Kong, that is the common law, rules
of equity, ordinances, subordinance legislation and customary law shall be
maintained, except for any that contravene this law, and subject to any
amendment by the legislature of the Hong Kong Special administrative region.
Article 18:
The laws in force in the Hong Kong Special Administrative Region shall be
this Law, the laws previously in force in Hong Kong as provided for in Article 8
of this Law, and the laws enacted by the legislature of the Region.
National laws shall not be applied in the Hong Kong Special Administrative
Region except for those listed in Annex III to this Law. The laws listed therein
shall be applied locally by way of promulgation or legislation by the Region.

2. Legislation: statute law, are all written laws. If the legislator wants to create a
law, they should go through the procedure of legislature of HKSAR.
3. Customary law: local law consisting of customs that are accepted as legal
requirements or obligatory rules of conduct such as practice and beliefs.
4. National law: should be applied in HKSAR except the law listed in Annex III of
basic law
5. Common laws may well be created by the judges and rules of equity is a more
 flexible for the judgers to provide appropriate remedy.

Ethics vs Law:
Laws: Binding rules, u may be punished if u does not obey it.
Ethics: not binding, no legal consequence, it was voluntary comply the
standard/rules. E.g We have to follow MTR by-laws, but not obliged to give seats to
person in need. Even we do not give seat to them, it is acceptable in law and also no
punishment.

Law: lower standard, it is not violated the laws even the employer assigns heavier
workload with the minimum hourly salaries to their workers.
Ethics: higher standard such as distribute a reasonable workload with their salaries.

Laws: with comprehensive system to pass and enforce laws, there is a restriction for
their behavior such as murderer or the action which harms social interest.
Ethics: no system to regulate the enforcement which means there are no restriction
for the people not following the ethic.

Laws: explicitly recorded and announced to public

Ethics: May either recorded in written form or implicit in individual or group’s mind

Law: Consistently applied to all in the society which is a more objective way
Ethics: Can have different standard if u belongs to different group (less objective,
more subjective way).

3. Agency Law 5 marks

Duties of agency
1. follow principal’s legal instruction
2. exercise reasonable care and skill in performing duties (eg. real estate agent)
3. acting in “good faith” and in the best interest of principal
(fiduciary relationship exists based on trust and confidence)
4. work with honesty and loyalty to avoid conflict of interest and must not make
a secret profit from the arrangement
5. must not misuse confidential information of principal
6. must not obtain secret commission/bribe from 3rd party without consent
7. must not mix his own financial affairs with those of his principal
Fiduciary duty:
A fiduciary duty is the highest standard of care at. A fiduciary (the “agent”) is
expected to be extremely loyal to the person to whom he owes the duty (the
"principal"): he must not put his personal interests before the duty and must
not profit from his position as a fiduciary, unless the principal consents.
4. Bribery 10 marks
No limit of money would be defined as an advantage according to the prevention
of bribery ordinance. Therefore, the following things can be defined as
advantage:
• Gift, loan, fee, reward or commission
• Employment or contract
• Payment, release or discharge of loan or liability
 • Service of favor (except entertainment)
• Exercise of any right or power
5. Misrepresentation 12 marks
XXX can rescind the contract. His/Her consent is obtained due to representor’s
false statement of fact. The chance of XXX to find out the facts before he/she
enters the contract is not relevant here. He / She has no obligation to search the
truth of the statements.
In fact, if the innocent party (representee) shows before or at the time of the
contract: there was a representation of fact; such representation was false; such
representation was related to a material fact of the contract; and such
representation induced the representee to enter into the contract. Under this
situation, the contract would be voidable by the innocent party. In addition, a
voidable contract is valid when made but can be set aside by the innocent party,
if he/she wants.
Moreover, for the rescission, it is putting both contractual parties into their
original positions as if no contract has been formed. An “equitable remedy”
subject to judge’s discretion. The right to rescind a contract is subject to certain
limitation, such as the parties cannot be restored to their original positions or the
rights of “third parties” have intervened. However, XXX is not involved this kind of
situation so she can probably get money compensation and rescission of
contract.

6. Money laundering 8 marks

Def of Money Laundering:
‘Money Laundering’ covers all procedures which change the identity of illegally
obtained money so that it appears to have originated from a legitimate source. In
short, the process of making illegally gained proceeds (i.e. "dirty money") appear
legal (i.e. "clean").
Def of Terrorist Financing:
‘Terrorist Financing’: carrying out of transactions involving funds or property that
are owned or controlled by terrorists or transactions that are linked to terrorist
activities.
Difference:
For money laundering to occur, the funds involved must be the proceeds of
criminal conduct.
For terrorist financing to occur, the source of funds is irrelevant, i.e. the funds can
be from a legitimate or illegitimate source.
Stages:
1. Placement: physical disposal of dirty cash, a huge collective dirty money
would be put in the financial system. (Placement - The placement stage is the
first stage in the process whereby the cash proceeds of criminal activity enter
into the financial system.)
2. Layering: series of transfer of funds to disguise the origin. For example, the
dirty money would be transferred to a new empty local company X first, and
then the money would be transferred an overseas empty company Y to
disguise the origin of those dirty money. (Layering - The second stage in the
process is the layering stage. This stage is often the most difficult in the
process and can involve the international movement of the funds. The
 overriding objective with this stage of the process is to distance the illicit
money from its source. This objective is achieved by adding layers of financial
transactions to thwart the audit trail so as to cut the link with the original
crime.)
3. Integration: use layered funds to purchase clean legitimate assets such as
luxury assets, financial investment, or industrial investment. (At the
integration stage the previously tainted money is reintroduced into the
legitimate economy.)
7. Bills of exchange 5 marks
Nature of bills:
• In writing - oral evidence not be admitted to contradict unfulfilled or
unconditional nature or terms of a bill
• Addressed by one person to another - drawer and drawee
• Signed by the person giving it - by drawer
• Payable on demand or at a fixed or determinable future time
• Sum certain in money - amount capable of exact calculation
• Payable to a specified person or his order or to bearer
Negotiation of bills of exchange
• If to bearer 🡪 no indorsement
• If to order 🡪 need indorsement 🡪 normally in the back
8. Employee Law 🡪 Pregnancy 5 marks
Pregnancy employee
Cannot fire:
1. the employee has been employed under a continuous contract, and
2. she has served a notice of pregnancy to the employer.
Can fire:
However, the employer is not prohibited from dismissing a pregnant employee
under the following circumstances:
• the employee is summarily dismissed due to her serious misconduct; or
• where it has been expressly agreed that the employment is on probation,
the employee is dismissed for reasons other than pregnancy during the
probation period of not more than 12 weeks.
9. Sales of goods ordinance 15 marks
The Control of Exemption Clauses Ordinance provide provides protection from
unreasonable exemption clauses which exclude “business liability”; and to make
the exemption clause ineffective. E.g.:

When the seller breaches his implied undertaking/terms as to titles (s14 of

SOGO), conformity of goods with description (s15), or quality or fitness for a
particular purpose (s16); when dealing a person as a consumer, this CANNOT be
excluded or restricted by reference to any contract term.

There are some implies condition of the sale of goods ordinance (SOGO)
(1) The goods supplied in the course of business are of merchantable quality; and
(S16(2)). The XXXX is not in merchantable quality as it is not safe and cannot fulfill
the general purpose for which anyone would ordinarily want it to serve,
notwithstanding it was used fairly and reasonably by the plaintiff (s16(2)).
(2) The goods are reasonably fit for the special purpose made known to the seller
or fit for the purposes for which they are sold (s16(3)). As long as the seller knows
the purpose for which the goods are bought, the reliance on the seller’s skill and
judgement in selling goods is implied. Because of that, the purpose is impliedly
made known to the seller the particular purpose for which the XXXX was
required, and the seller must have been aware that the buyer was relying on the
seller’s skill and judgment to supply him with a reliable XXXXX to be given to the
plaintiff (s16(3)).