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700254-Enterprise Law

Question

Answered

Question 1

Ross and Demelza decide to go into business together following the completion of their Mining studies at university. After extensive market research they write up a business plan for a Mining business to be named Poldark Mining and register an ABN.

Demelza had saved $100,000 from previous work which she contributes as start-up capital. Ross doesn’t have any savings but contributes his truck, drilling and mining equipment. They agree to lease a small warehouse space from which to operate the business.

The pair agree that both:

• Ross and Demelza will do aerial surveying for clients;

• Ross will do the drilling and digging;

• Demelza will manage all online research, customer enquiries and billing; and

• Profits will be split 50:50.

After the first two months of operations, they are struggling to keep up with the orders and decide to hire Bronwyn to also undertake drilling and digging

Over the next month the following events unfold:

a) Without asking Demelza, Ross orders a new drill from Warleggan Drills believing that the drill will dig deeper and faster, however, Demelza says she never would have agreed to this if she had been asked. Warleggan Drills has demanded payment of the outstanding invoice of $15,000 from Demelza.

b) Whilst drilling on site, Bronwyn cuts through a power line (she is ok, but her hair is a little frizzled). This causes $10,000 damage to a local business: Dwight’s Medical Service.

c) Without consulting Demelza, Ross started a separate oil drilling business. So far Poldark Mining haven’t drilled for oil as it would increase their insurance costs, however, Ross and Demelza have previously discussed the lucrative nature of breaking into the oil industry.

Discuss Demelza’s potential liability. Support your response with relevant legal (case and or legislation) authorities.

Question 2

Miriam lives in a small town in rural New South Wales. She is an avid fan of the band “Franz Ferdinand”. When Miriam heard that thy were coming to Sydney bought a ticket for a Sydney concert on 22 August 2020, which cost her $750.00. The show was for one night only.

Wanting to make the concert a memorable event for herself, Miriam decided that she would be chauffeur-driven from her home to Sydney and back on the day of the concert. To this end, she contracted Kapranos Kars, and spoke with the owner, Jacqueline Kapranos, about the concert, describing her passion for Franz Ferdinand, and her admiration for the band. She said that she wanted Kapranos Kars to drive her to the concert and back in their stretch-limousine. Kapranos Kars offered to take the job for $2,000.00 and Miriam agreed. It was further agreed that Miriam would pay a deposit of $750.00 immediately, and the balance on the day of the concert.

When Miriam arrived at Kapranos Kars’s place on 22 August 2020, she was told by Jacqueline’s husband that she had just left on another job which was more profitable than the job he had agreed to do for Miriam

Miriam was devastated, as there was no other means by which she could get to the concert in Sydney, and it was clear that she would miss the concert.

To make matters worse, Miriam discovered the next morning that the seat that she had been allocated had been selected as the ‘Door Prize’ winner. This prize was unadvertised and was a spontaneous gesture by the band to their dedicated fans, and would have entitled her to meet the cast and to be presented with a framed and signed photograph of them. Unfortunately, a pre-requisite of the door prize was that she had to be in attendance at the time of drawing, or it would be forfeit. She has later discovered that such a photograph would have fetched a price of $10,000 on the collectibles market.

Miriam seeks your advice as to what damages (if any) she might obtain against Kapranos Kars for breach of contract

Question 3

Consider the scenario below, then write your answer to the four-part question that follows. You must answer all four parts of the question.

Andrew places the following listing on Gumtree:

In each of the separate scenarios below, advise Andrew as to whether an agreement has been reached for the purpose of creating an enforceable contract. Explain your reason(s) for reaching this conclusion with reference to legal authorities where appropriate.

i. Peter calls Andrew and states that he is interested in the Chickens. They arrange a time for him to come and inspect them. After picking them up (they are very tame) and cuddling them for about 2 minutes, Peter says, “I’ll take them” and walks off to his car before Andrew has a chance to reply.

ii. James sends an email stating he is prepared to pay $100 for the chickens but will not be able to pick it up until 20 December 2020. Andrew replies stating he can have the chickens for $100 but would need them gone by 15 December 2020 at the latest. James says he will collect them on 15 December 2020 but is now only prepared to pay $90. Andrew responds by saying: “Yes, great news about the 15th, if you can make it $95 you’ve got yourself a deal.” James emails and agrees. 

iii. Tim emails Andrew late one night to say he will buy the chickens for $120 and pick them up on 5 December 2020. When Tim wakes up the next day, he realises he has no room for them and immediately emails Andrew stating that he is no longer interested in buying them. Andrew doesn’t see Tim’s second email and replies to the first one, stating: “It’s a deal.” (5 marks) iv. Amanda telephones Andrew (who doesn’t answer) and leaves a voicemail message saying she is on the way with $120. She says she will leave the money in an envelope under the doorstep if he is not home. 

700254-Enterprise Law

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