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problem 1: Crystal is the proprietor of a tourist agency. On 1st July she visited for the second time Printing World, a company offering printing services. Crystal showed James, a manager of Printing World, a sample promotional brochure that contained the details of four tours organized by her agency and asked James to make 5000 copies of it. James recorded the information in a printing order form and presented it to Crystal for her signature. The form was written in English. One statement (in small print) read: “No refund is allowed in any circumstances and even in case we commit a breach of contract”. After presenting the form to Crystal, James told her that she could ask him any problems about the form. Crystal, who had come to Hong Kong from Mainland China and had never attended school in English, signed the form.

Crystal later received 5000 copies for her promotional brochure from printing World. She found that there were several serious misspelling in all the copies and half of the copies had missing pages. She went back to Printing World, filed a complaint claiming that Printing World had been careless in making copies of her brochure, and demanded a refund, which James refused.

The annual turnover of Printing World is around 60 million HKD while that of Crystal’s business is barely 1 million HKD. Three other companies provide printing services in the same area and they have similar exemption clauses in their printing order forms.

Discuss Crystal’s right to refund, if any.

problem 2:

Part A: On 1st October, Susan inspected a house on sale. Kenny, the owner, told Susan that the house would come with a car park nearby. Susan said: “I prefer to live in a quiet place. I would not buy a house with a noisy environment. Also, I hate to walk a long distance from the house to the car park.’ Kenny replied: ‘As you can see, the surrounding area is quiet.’ He knew, however, that the airport authority had recently changed the flight routes so planes would soon regularly fly over the house about two hundred meters above.

Susan did not see the car park Kenny mentioned. Kenny gave her a brochure when she left. The brochure showed that the car park was in a vacant lot approximately three hundred meters away from the house but Susan had never read it.

On 14th October, Susan informed Kenny of her decision to buy the house. They signed a sale and purchase agreement, prepared by Kenny’s solicitor. A diagram in the agreement showed the location of the car park. After signing the agreement, Susan found the distance between the house and the car park. She also heard about the imminent changes in the flight routes of planes and realized how noisy the area would soon become. She now feels deceived, angry and distressed.

Discuss whether Susan can rescind the sale and purchase agreement with Kenny and recover any loss from him.

Part B:

Sharon has relied on Wilburn, a businessman, for his business advice for many years. A month ago, Wilburn offered to sell his internet-cafe business to Sharon. She agreed. The price she paid was slightly above that of the market. Wilburn did not tell Sharon, however, that wild dogs were always hanging around the place so people were frightened to visit the cafe. Sharon was afraid of wild dogs as well.

Discuss whether Sharon can cancel the deal with Wilburn.

Management Theories, Management Studies

  • Category:- Management Theories
  • Reference No.:- M91266

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