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For the past five years ACME Pty Ltd (“ACME”), a company that specialises in the building of low-cost housing, has entered into one-yearly contracts with Big Bricks Pty Ltd (“Big Bricks”) for the supply of house bricks.  Each of these contracts has been preceded by protracted negotiations in which new terms and conditions have been agreed between the parties.  In the most recent set of negotiations, for a proposed contract in 2014, the parties had agreed on the type and quantity of bricks to be supplied.  The specified quantity easily exceeded Big Brick’s expectations, bearing in mind previous contracts.  ACME thereupon sent Big Bricks a letter of intent which includes the following statement: “As per negotiations we intend to contract with you, purchasing 2.5 million bricks (type agreed) for the year 2014 at a price to be confirmed.”  Big Bricks purchases additional machinery in order to manufacture the increased quantity of bricks and goes into immediate production.

Consider the legal position of the parties if negotiations between them break down and ACME refuses to purchase any bricks from Big Bricks

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Tellus molestie nunc non blandit massa enim nec dui. Tellus molestie nunc non blandit massa enim nec dui. Ac tortor vitae purus faucibus ornare suspendisse sed nisi. Pharetra et ultrices neque ornare aenean euismod. Pretium viverra suspendisse potenti nullam ac tortor vitae. Morbi quis commodo odio aenean sed. At consectetur lorem donec massa sapien faucibus et. Nisi quis eleifend quam adipiscing vitae proin sagittis nisl rhoncus. Duis at tellus at urna condimentum mattis pellentesque. Vivamus at augue eget arcu dictum varius duis at. Justo donec enim diam vulputate ut. Blandit libero volutpat sed cras ornare arcu. Ac felis donec et odio pellentesque diam volutpat commodo. Convallis a cras semper auctor neque. Tempus iaculis urna id volutpat lacus. Tortor consequat id porta nibh.

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