Vladimir is a successful business person. He owns the Lew Hoa Shopping Complex at Norton Place. He has several shops vacant in the complex. Vladimir’s shopping complex Managing Agents place the following notice on the Lew Hoa Shopping Complex Notice Board in Norton Place on his behalf:
“Shop available for lease. Good rates, electricity included. Contact Vladimir, MOBILE: 005566779”.
Sasha is anxious to find a venue to sell her range of dresses. She reads the notice and telephones Vladimir seeking a meeting with him. At the meeting on June 1st Vladimir says that his terms of the lease are $1,000 per week for a 12 months lease but the tenant is to pay all outgoings including electricity. Sasha protests saying that the advertisement promised that all electricity charges would be included in the rental payment. Vladimir just shrugs his shoulders and says, “This is my offer. Go away and think about it. You had better get back to me soon by email as there is a lot of interest in the premises and I am actively looking for people as well”. Sasha leaves the meeting and goes home.
(i) Do you consider that Sasha would succeed in a claim to the effect that Vladimir should be bound by the advertisement on the Notice Board? Illustrate your answer with decided common law cases, providing the basis of your reasoning.
On the 5th of June, that is 4 days after she had the meeting with Vladimir, Sasha decides to accept the offer that he had made verbally to her at the meeting. She writes out a letter in her own handwriting a letter to Vladimir accepting the offer. Sasha signs the letter, puts it in an envelope, affixes a stamp and posts it in a post box outside her local post office at 4 pm on 6th June.
On the same day that is the 6th of June, Vladimir makes his weekly visit to ‘The Cossacks’ a local rugby club of which he is a prominent member and to which he has donated a lot of money. At the club Vladimir meets a fellow member , Milo. Milo says to Vladimir that he has some spare capital and would like to start up a business. Vladimir wants to be thought of as a good fellow and tells Milo that he has a shop vacant which would be ideal. He offers it to Milo for a year’s lease at $1,000 per week. Vladimir also says, “As a favour to you, Milo, I will pay all the electricity outgoings for the shop”. “That’s beaut. I accept your offer.”
When Vladimir comes to his office on the 7th of June, he finds Sasha’s letter dated 5th June accepting his offer waiting for him. Vladimir immediately telephones Sasha and says, “Sorry, Sasha you are too late, I have already leased the shop”. Sensing Sasha’s disappointment, he adds, “I told you to be quick, didn’t I ?”
(ii) Sasha consults you saying that she desperately wants the lease of the shop. What advice would you give her? Once again, provide the basis of your reasoning outlining the legal principles.
Vladimir then starts up a conversation with Roberto another member of his football club. Roberto is anxious to start up a small business of his own. Vladimir offers him a shop fitted out as a coffee shop. The agreed rental is $1,000 per week. Roberto signs the lease. Business is not good and Roberto becomes worried when he sees other shopkeepers leaving the complex. He asks Roberto whether his rent can be reduced to $500 per week. Vladimir agrees in a conversation with Roberto at the club. There is no formal acknowledgement of this arrangement. For the next 20 weeks, Roberto pays the reduced rental and Vladimir accepts it. Vladimir hears a rumour that Roberto is going to give notice to terminate the lease. Vladimir is annoyed at this and sues Roberto in the Local Court to recover $10,000 “arrears in rent”.
(iii) Advise Roberto as to his legal position. You should cite relevant case law and provide the basis of your reasoning.