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Question 1:

11 marks

a. Carbord Ltd (C) is a building materials wholesaler. On Monday morning C received a letter containing an order from a regular customer, Home Interiors Ltd (HI), ordering a certain number of gyprock sheets, with measurements, to be delivered to an address in Sydney the following Monday. C immediately posted its confirmation that the order was accepted. This letter would have ordinarily taken 2 days to reach HI’s place of business but, due to a strike affecting Australia Post, the letter was not delivered until Friday afternoon. On Friday morning, having not heard from C, HI, believing C were not able to supply the materials, ordered the same materials from an alternative wholesaler. HI sent a fax on Friday afternoon, before the mail was delivered, to C cancelling the order. HI is now refusing to accept the gyprock sheets from C, or pay for them. Advise Carbord Ltd. (6 marks)

An offer was made from Home Interiors (HI), as they placed an order with Carbord Ltd (C). This was accepted by C and a mail was sent by C to inform HI of the acceptance. However, as a result of Australia Post’s strike, miscommunication between both parties has occurred. The mail was set to arrive within two days of the mail being sent. An email or fax should have been sent during the strike period to ensure HI was notified of the acceptance. Both parties intended to be legally bound by the agreement, initially before the strike occurred. HI placed the order which specified what HI required from C. C then sent a mail back in relation to the offer made; this suggests evidence of consideration. However, there is lack of intention, due to the strike HI was not informed of the acceptance and consideration. HI did send a fax Friday afternoon cancelling their order which means the offer is now invalid. Therefore, this indicates no initial contract as an agreement was formed due to the Australia Post strike and lack of intention. This will result in HI not making any payments to C and C is now liable for the gyprock sheets. For future reference, C should use other sources of communication in order to reach its customers.

b. How would your answer change if the order had been received by email on Monday morning and the return email confirming said order was slow to reach HI due to a hacking incident to HI’s server? The confirmation email entered HI’s server on Tuesday morning, but HI had faxed a cancellation of the order at 4:15 pm the previous day, Monday. (5 marks)

An offer was made by HI, electronically via email Monday morning for an order placement. C accepted the offer the same afternoon via email. However, for the offer to be effective it must enter the other company’s system before it becomes an effective contract. However, due to a hacking incident in the HI server, the email did not enter the system until Tuesday Morning. HI revoked the offer via a fax Monday afternoon. Therefore, the courts can recognise there was no contract between the two parties as HI revoked their offer.

Question 2:

5 marks

Jenny misplaced her personal organiser while at work. She placed a reward notice on the staff notice board. The following day one of her colleagues, Samantha, returned her organiser. Samantha was not aware of the reward notice. Overjoyed at the return of her personal organiser, Jenny said she would pay Samantha the full amount of the reward. Subsequently Jenny changes her mind. Is Samantha entitled to demand the offered reward? Jenny placed an offer, which was a reward notice, on the staff board for anyone who had found her organiser. Samantha did not accept this offer and she did not see the offer on the notice board. Jenny had consideration to pay Samantha the reward as she returned the personal organiser. However, Samantha is not entitled to demand the reward offer as there is no acceptance the offer and lack of intention between the two parties. If Samantha had seen the notice board, she would be entitled to demand the reward offered.

Question 3:

6 marks

Joe purchased a small cafe from Simone. Joe was induced to buy that business by a statement by Simone who said the average takings were $2,500 per week. Two weeks after taking over the business it became apparent to Joe that the shop took no more than $750 per week. Simone’s statement must have been made knowing it to be false. Joe wants to return the business and recover the purchase price. Is Joe likely to be successful. Explain your answer fully. It is assumed an offer was made when Joe purchased the café from Simone, both parties accepted the offer either by email or conversation. Intention was provided as both parties are legally bound by their agreement. There is a lack of consideration within the facts as consideration is what each party promises or provides to the other party. (Gibson, A 2020). However, Simone made a false statement regarding the earnings. Although, before signing the contract did Simone provide any financial statements to Joe displaying the $2,500 earnings a week. Otherwise, were the earnings during a peak time such as Christmas. Simone has misrepresented the cafés weekly earnings to Joe as misrepresentation involves false statements of the past or present fact and which was intended to and did induce the represented to make and agree to the contract (intext ref). It is highly likely Joe will be successful due to misrepresentation from Simone; however, if Simone has included a section in the contract which rules out misrepresentation of the weekly earning, Joe will not be successful.

Question 4:

5 marks

In the course of an internal audit the inhouse accountant discovered that a senior employee’s daughter had misappropriated (stolen) nearly $500,000 from the company. The managing director of the company spoke with the senior employee and threatened to report the matter to the police unless the senior employee agreed to repay the money. The senior employee signed a document acknowledging the debt and a schedule of repayments. She failed to comply with this schedule. The company now wishes to sue her for the amount owing. Will the senior employee succeed in defending the action relying upon duress?

The senior employee entered a contract when they signed the document acknowledging the debt of her daughter and agreed to pay the scheduled payments. The managing director made an offer and the Senior employee accepted the offer. However, she failed to comply with the scheduled payments. Under duress, which is when a party has been forced or threatened to enter a contract against their own will. The threat can be against the individual themselves or can be direct to a family member or an aspect of the business (Gibson, A 2020). In the facts of this case, it states the managing director threatened to report the matter to the police unless she signed the contract, thus threatening the senior employees’ daughter. Although the senior employee signed the legal contract, under duress this contract is exempt. Therefore, the senior employee will be successful in defending their actions under duress....