Commercial Law – Assessment 1

Part A

1. In what court was the case heard?

New South Wales Supreme Court, Equity Division

2. Name the judge and explain his title.

Judge Rein A. J.

3. Name the plaintiff and defendant and counsel representing them.

Peter Smythe (Plaintiff)

B. Kasep (Plaintiff’s Counsel)Vincent Thomas (Defendant )

D. M. Loewenstein (Defendant Counsel)

4. What particular circumstances led Rein AJ to doubt the credibility of the defendant’s version of events?

Inconsistency in plaintiff’ account of events and agreements done. For instance, the defendant claims to have mentioned of selling the aircraft only after inspection by the buyer, which was not mentioned on eBay website.

5. The defendant argued there was no binding and enforceable agreement, what were the components of the defendant’s argument.

First, the defendant claimed that eBay was did not work like the traditional auction. Second, none between the defendant and plaintiff had written agreements on the aircraft purchase.

6. How is agreement reached in a traditional auction?

Highest bidder agrees to buy the auctioned good at fall of the hammer.

7. What differences did Rein A J outline between a traditional auction and an on-line auction?

There is human agent in traditional auction, auctioneer serves as seller’s agent, and the seller can withdraw a good from the auction anytime before fall of the hammer.

8. What did Rein A J regard in an eBay auction as the equivalent of the fall of the hammer in a traditional auction; and what is the significance of each?

Close of bid session and the appearing of “won” message on buyer’s screen.

9. Why did Rein A J believe an order for specific performance of the contract appropriate in this case?

Nature of the bargain, the good was of high quality, vintage and an unusual item in the auction.

10. Why was the final order not made in this hearing?

More deliberations with both sides counsel.

11. Why was the matter heard in the Supreme Court?

Complexity of the case—defendants and plaintiff were from different regions (court jurisdictions) and the auctioneer (eBay) from another country.

Part B

1. Has Tom reached an agreement?

Tom and Dick did not have a contract regarding sale of motor cycle. They had just discussed over the matter but failed to agree on final price, Tom insisted on selling sit for AU$ 5000, whereas the later insisted could only part with AU$ 4500. Tom thus has no claim on the motor cycle even after raising his bid by 500, to AU$ 4500. In addition Tom had not expressed opinion that he would be reconsidering or raising his bid on the motor cycle. Had that been the case, there could have been obligated (under an agreement) to consider Tom’s new bid before accepting another one from any other interested party. In this regard, Dave is free to sell his motor cycle to another individual (Theodore 2006).

2. Is Lotty obliged to share the lottery winnings amongst the group?

Lotty is obligated to share lottery winnings with rest of the group as per the agreement made previously. After all, the group had entered into and agreement that all individuals had to abide, including her. She has no legal reason to abandon the verbal agreement, which she is part. In fact, her share of winnings does not go beyond the contributed share on ticket price. However, Lotty understands well that there was no written agreement between in the group regarding sharing of any winnings. There was a verbal agreement that was never put in writing. In addition, Lotty understands that the lottery company recognizes the ticket buyer, whoso the one is provided with entire winnings. Lack of written agreement means that rest of the “winning team” cannot convince the lottery company so it could split winnings check. The team will thus have to contend with getting nothing from their winnings. However, they could try to express their grievances to the lottery company, as well as authorities regarding Lotty’s actions. Though such attempts would be futile without evidence of their agreements, they could succeed in bringing the issue into public arena, and possibly have Lotty own up and share. The group indeed has very limited routes of having Lotty commit to the previously made agreement (Jack 2004).


Jack, M 2004, Freedom to Design and Freedom to Play in Virtual Worlds, Virtual Liberty publisher, London.

Theodore, J 2006, Finding a Place for Virtual World Property Rights, Westbrook, New York.