Question: 1. Jimmy is an eighteen year old university student. He is well-known around campus for his intelligence, but more particularly because he is very thin. Everyone always wonders if there is something wrong with Jimmy. But for many years, Jimmy has tried to put on weight without any success. One day, after a certain young lady commented on how skinny he was, Jimmy returned home early from university and turned on the television. At that time, there was an infomercial running for a new meal replacement product called "Massive Freak". This infomercial made several statements to the effect that Massive Freak Co guaranteed any person who drank Massive Freak (in accordance with the directions on the packaging) three times a day in substitution of meals for 14 days would gain 20% of their body weight. The ad stated that the company would pay $5,000 to any person who took the Massive Freak Challenge and failed to gain 20% of their body weight after 14 days. Jimmy decided this would be a perfect solution to his problem, and set out to take up the challenge. He telephoned the number on the screen and ordered Massive Freak for the introductory offer of $299 for 14 days' supply (plus postage and handling).
The 14 day supply of Massive Freak arrived at Jimmy's house on 1 June, 2014. He consumed Massive Freak Drink in accordance with the directions from 2 June-15 June, 2014. Due to a change in marketing strategy, Massive Freak Drink Co decided to scrap the Challenge and this particular advertisement was withdrawn from television on 10 June, 2014. From 11 June 2014, Massive Freak Drink Co reverted to showing its previous infomercial. For a week, the infomercial also featured a voiceover stating 'The Massive Freak Drink Co Challenge is now over, but your new massive life can begin today!'As Jimmy was putting on weight and consuming enormous amounts of calories, he was full of energy he was rarely at home during the two week Challenge period. As a consequence, Jimmy did not see the new infomercials with the voice-over stating that the Challenge had ended. At the start of the Challenge, Jimmy's weight was 40kg. At the end of the 14 days, Jimmy weighed 44kg. More depressed than ever, he remembered the promise made by Massive Freak Drink Co to pay $5000 to anyone who did not gain 20% of their body weight. Jimmy planned to put the money toward personal training sessions.
Jimmy telephoned Massive Freak Drink Co on 16 June 2013, only to be told by a representative of the Co that the ad campaign had been scrapped and, in any event, the offer of money was not serious and merely part of a sales drive. Jimmy wants to sue Massive Freak for breach of contract. He is demanding payment of the $5000. Massive Freak Co denies it entered into a contract with Jimmy. It says the Challenge was a mere sales puff and was not intended to be taken seriously. It says such advertising techniques are common. Massive Freak Co says that, even if the court finds that the Challenge did constitute an offer that was capable of acceptance, the offer was revoked before Jimmy performed his end of the bargain, and this means the Massive Freak Co is under no obligation to pay the money to him. Jimmy seeks your advice. He wants to know whether he has a valid and legally binding contract with Massive Freak and therefore whether he can sue them for a breach of contract.
2 Jonathon is a shop owner in a small town in Western Australia. He regularly buys the goods which he then sells to the local population from a wholesale supplier in Perth, under an arrangement which has suited both parties for many years. He has become well known in the district for the purity of the flour which he sells and which includes special and secret ingredients, such that other trades people come from hundreds of kilometres around to buy it to use it for "home made" bread and scones. Bob has a small bakery and specialises in "home made" scones and bread rolls. He attributes much of the popularity of his business to the quality of the flour which he helped Jonathon to develop, and which he buys from Jonathon under a written contract. Jonathon's supplier in Perth is subjected to a raid by the health inspectors and is closed down because several large cockroaches were found in the flour bins. As a result, Jonathon has to find a new supplier, and quickly.
He is unable to find one capable of making the special blend of flour he is famous for, and he elects to purchase regular flour in bulk from a large supermarket, at a significantly lower price than he had previously paid. He decides not to tell anyone, and reaps a significantly increased profit as a result. Bob's business starts to fall off, and after 6 months he does some market research which indicates that it is because his food "no longer tastes as good". He does some further checking and discovers that Jonathon has been supplying different flour to that specified under the contract. When he raises the issue with Jonathon, the answer that he receives leaves him dumfounded. Jonathon indicated that perhaps the presence of the cockroaches gave the flour its distinctive flavour, and that if Bob kept silent on this, they could share the increased profit.
a) what rights, including compensation, does Bob have against Jonathon?
b) does Jonathon have any rights against his Perth supplier?
c) does Bob have any rights against the Perth supplier?
d) What answer should Bob give to Jonathon?
3 Amanda agrees to sell a house to Charles under an agreement which provides that:
a. The sale is to be completed by no later than 30 June 2010;
b. The house is to be certified clear of termites by Amanda prior to the date the sale is completed;
c. the total price is to be $400,000; and
d. the sale is conditional on Charles' finance being approved by the Common wealth Bank.
On 25 June 2010, Charles' solicitor contacts Amanda and advise her that there will be a delay in settling the contract, as although the finance has been approved by the Commonwealth bank, it will not be available until the first day of the new financial year, that is 1 July 2010 (the day following the scheduled completion date). Amanda however has been unable LO have the house checked for termites and will not, as a result be able to complete her own obligations under the contract. She decides not to say anything at all to Charles. On 26 June 2010, Amanda receives an offer of$550,000 for the house from John, with an offer of immediate cash settlement. She instructs her solicitor to advise Charles that the sale is off, citing anticipation of a breach by Charles (considering that he would fail to comply with the specified terms of the agreement) as grounds. She further instructs her solicitors to complete the sale to John immediately. · Charles seeks your advice as to his rights against Amanda, including any compensation which may be involved· Can Charles take any action against John? If so, what?
4 Sarah and Jemima took a two year lease of premises in the Shopping Centre. They started their own organic vegetarian café. Their enthusiasm made up for their lack of experience and soon they were booked out every day for lunch and dinner. Their success was a great achievement given neither of them had every learned to read or write because of some undetected learning difficulties they had as children. As their lease is due to be renewed, they would like to renew it for another five years. Sam, the Centre manage, has told them they will only get a new lease with a 200% increase. Sarah and Jemima tried to discuss the matter with him but he is unwilling to negotiate. He tells them that they "can take it or leave it" and points out to them that this is the only shopping Centre in town. Sarah and Jemima enter into the new lease but, after struggling with the downtrend in their business, seek to get out of the lease. Sam will not allow them to do so and says they have another four years to run on the lease and that they can either stay there and pay or move out and still pay the balance owing under the lease. Can Sarah and Jemima successfully argue they should be able to avoid this contractual obligation???
5 Reggie is a home builder of extreme talent, although he is unable to read and write. In August last year he entered into an agreement to build a house for Bob, to be finished by the end of January this year. The total cost of the building is agreed to ne $250,000. The agreement was subject to the execution of a formal contract, which Bob drafted. Reggie then asked Bob the terms of the agreement to which Bob replied they were as agreed. Reggie completes the build on 31 January, the agreed date. However, when he receives payment he only gets $225,000. When Reggie questions this, Bob tells him that $25,000 was deducted as a default payment because the house was not completed on time - as per the written terms of the contract. Can Reggie recover the $25,000?