Problem Q Wk 7 Cl 1 Damages

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Apr 29, 2024

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1 PROBLEM QUESTIONS – Week 7 Class 1 Extracted from May Fong Cheong, Australian Contract Law: Principles and Cases (Lawbook Co, 2020) Question 1 Tom regularly supplies Henry, a vineyard owner, with custom-made barrels to store and age grapes into wine. Henry ordered five barrels from Tom to be delivered by end June. Henry has had an unexpectedly early crop and needed the barrels urgently. Henry also needed more barrels as he has also recently acquired his neighbour’s vineyard and has found buyers for his wine. Henry calls Tom to increase his orders to 10 barrels but does not mention his new vineyard acquisition, nor his contracts with the new buyers for his wine. Due to the large number of orders that he received, Tom was only able to deliver seven barrels to Henry in early July. The barrels that Tom supplied to Henry were not securely fastened which caused very minor leakages. This however affected the ageing process of the grapes, and the wine produced tasted sour and were not fit to be sold. Henry loses a large amount of profits and also loses his gold certification as a trusted wine supplier. Advise Henry. Question 2 Irene, an avid cook is attracting attention for her culinary skills. Aroma Ltd, a big advertising brand, contacts Irene to design and bake a master cake for the company’s 50th anniversary. Aroma’s director, Sue, tells Irene that the cake must be large and impressive as the event will be heavily publicised and they are hosting well-known clients. Sue also tells Irene that if she does a good job, she can cater for their food packs for all their future advertising events.
2 Irene decides to use a special Japanese technique to bake the cake which requires specialised tools. Irene contacts Fiona, a friend and importer of Japanese products. Fiona assures Irene that her shipment of tools will come on time. The tools are delayed as Fiona forgets to place the orders with her Japanese counterpart, and also because Irene gave Fiona two inconsistent dates as to when Aroma’s event was to take place. Without the specialised tools to apply the special Japanese technique, Irene’s cake was a disaster. Aroma’s guests were critical of Aroma’s 50th anniversary event. Aroma threatens to sue Irene and tells Irene she can forget about catering their food packs. Irene falls into depression lasting over a period of six months. The medical bills amounted to $3000. Advise Irene. Question 3 Wally owns a fleet of cars, which he hires out for chauffeured events. Elaine, a real estate owner, hires Wally’s cars to drive potential clients to view expensive houses in Sydney. Elaine promises Wally that if he upgrades his cars to include mini bars, she will give Wally a three-year contract to chauffeur her clients. Wally estimates that he will get a profit of $120,000 from this contract. Wally spends $80,000 doing the requested upgrade of his cars. With the sudden downturn in the Sydney property market, Elaine’s home inspections have drastically reduced. Elaine enters into another contract with Jim, a competing hiring company offering better hire rates. To respond to these changed circumstances, Wally rebranded his services and secured a contract with a private university for two years for $150,000. Advise Wally whether he has any claims against Elaine.
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