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LAW 1510 Contract Law

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Question

Case Study

Meg operates a travel agency in Hawksburn called Adventure Tours and put an ad into the local paper:

 “Seeking experienced and adrenaline seeking tour guide with passion for adventure. Submit your resume via the link on our website at www.adventuretours.com.au by 6 August 2018. I would be prepared to offer employment for one year, with an option to renew.”

Jared saw the advertisement. He had been working for years in Canada as a tour guide but had recently returned to Melbourne to look after his elderly mother. Jared submitted his resume and Meg arranged to meet him for an interview at her travel agency on 7 August 2018. Meg outlined the requirements for the job and advised him that Adventure Tours was about to promote a new tour of the Northern Lights in Finland. They discussed Jared’s past experience, which is very impressive, but Meg was concerned about his lack of experience in conducting tours of Finland.

Meg had had no other interest from any other tour guides, so she offered the job to Jared but said, “Why don’t you try it for a bit and we will see what happens. If I don’t think it is going to work out, then I’ll just cancel our contract. I’ll get my lawyer to send you something in writing setting out the terms we discussed. Think about it. If I don’t hear back from you tomorrow, I’ll assume that you are happy with the arrangement and look forward to working with you.“ Before Jared could respond, Meg stood up and ushered him to the door. Jared said good bye and left the travel agency.

Meg didn’t hear from Jared until the end of that week, when he emailed her with a request for a copy of the key for the travel agency. Meg couriered him a copy of the key.  The following week Jared came into the travel agency and Meg watched him familiarise himself with the agency’s procedures. Meg didn’t want to interrupt him so she didn’t communicate with him, other than polite chatter. She thought she would give him a few days to settle in. Meg was very relieved that Jared had accepted the job and phoned her lawyer to ensure that she would send her the formal employment contract for Jared to sign.

On Monday 13th August 2018, Meg arranged for some promotional flyers to be printed to be distributed in the local area to promote the adventure tour. Meg’s niece, Trish, was working part time in a public relations company while she studied at university. Meg asked Trish if she would walk around the local area and distribute flyers into letterboxes and businesses, as well as hand out flyers at university to students looking for an adventure holiday. Meg said, “you know I will be good to you”. Trish replied that this was no problem. Meg gave her two large boxes of flyers and Trish spent a few hours each day over that week distributing the flyers.

At the end of the week, Trish visited Meg at her travel agency and reported that she had done the work and would like to be paid. Meg was shocked that she wanted to be paid. Trish was offended and said that she had spent hours each day completing the task and she had only done this because she believed she would be paid. Meg said she would pay her $20 an hour but then later that day she changed her mind and refused to pay her.

That same afternoon, Meg arranged to meet with Jared at the travel agency to sign the employment documentation. Jared regretfully informed Meg that he had tried all week to see if he could do the job required of him before he accepted her offer but he had decided that the job was not for him. Meg was furious and told him that they had a contract in place and he couldn’t leave her in the lurch during the promotion of the next Adventure Tour.

Jane and Callie were having breakfast at a café on Sunday 26 August 2018. They attended the same university and were in their first year studying law. They discussed how exhausted they were from their intense studying and decided to holiday together at the end of the year. They each suggested holiday destinations but could not agree on a location. Their friend Trish had given Jane the promotional flyer at university and she took it out of her bag to see if she could get any inspiration for travel ideas. She discovered the following information on the flyer:

“Adventure Tours is offering you the adventure of a lifetime. Travel with experts to see the Northern Lights in the northern Lapland region of Finland. One of the best places to see the phenomena of the Aurora Borealis. $2996 per person includes all flights, accommodation, meals, sightseeing tours in a small group of 50 people. Travel dates are 14 December 2018 – 21 December 2018. If you are interested, come visit us at our travel agency located at 123 Main Road, Hawksburn or call 1300 656 464 to apply. Offer ends 5pm 2 September 2018.”

The two friends looked at each other and smiled, agreeing that this was the perfect adventure for them to enjoy together over their summer break from university. They agreed to finalise their bookings within the week.

That afternoon at 1pm, Jane stopped at the travel agency on her way home from university and was delighted to see Meg. She knew Meg from her book club and they chatted about the latest books they were reading. Then Meg asked Jane if she wanted to accept their amazing travel offer. Jane responded, “I do but it is a bit pricey for me. Is there any way I can get it a bit cheaper, perhaps 25% off?” Meg responded that she could offer her a ‘mate’s rate’ of 15% discount as long as she kept it to herself. Meg added, “We can offer you a 7 night tour to Finland to see the Northern Lights in a small group of 50 people maximum. This will include all flights, meals, sightseeing tours and accommodation. The accommodation is all great. There may even be a dog sledding tour with huskies! All you need to do is complete the form on our website and pay via the link attached to the form.”  Jane is thrilled with this information and said, “that is perfect. I’m just going to Chadstone Shopping Centre to buy a jacket I saw for the trip and then I will go home and complete the paper work.”

By 3pm that day Meg was feeling unwell. She closed the office and set up a voice recording that directed callers to the Adventure Tours website to sign up for the Northern Lights tour. The website stated as follows:

Adventure Tours is offering you the adventure of a lifetime. Travel with experts to see the Northern Lights in the northern Lapland region of Finland. One of the best places to see the phenomena of the Aurora Borealis. $2996 per person includes all flights, accommodation, meals, sightseeing tours and a small group of 50 people. Travel dates are 14 December 2018 – 21 December 2018. Click on the information form link. Offer ends 5pm 2 September 2018.”

At 3.15pm Callie rang Adventure Tours and was directed to the website. She filled in her details as required on the information form and paid the fee with her credit card.

At 4pm Jane went onto the website and was distraught to see in bold lettering a notice that said, “Sold out. We are sorry you missed out but we look forward to having you travel with us another time.” She was so upset that she started to cry and could not bring herself to call Callie to let her know. She knew Callie had already booked and she was devastated that she would miss out on travelling with her.

The next day, Callie received an email as follows, “we regretfully inform you that due to unavoidable and unanticipated additional costs, we will be unable to run this tour at our high standards without an additional $500 from each applicant. We trust you understand our predicament.  Please confirm your approval of the additional cost on the link on our website. We look forward to an exciting adventure with you.”

Callie assumed Jane had booked and would pay the additional $500, so she went on to the website and confirmed she would pay the additional $500. She preferred to pay the additional amount rather than not travel with Jane. She then rang Jane to chat about their upcoming trip. Jane had been upset all night about missing out on the booking and told Callie how upset she was. They both agreed that they did not want to travel without each other.

Question

1. Is there a legally binding contract between Adventure Tours and Jared? Explain.

2. Is there a legally binding contract between Adventure Tours and Trish? Explain.

3. Is there a legally binding contract between Adventure Tours and Jane? Explain.

4. Is there a legally binding contract between Adventure Tours and Callie? Explain

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