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MLC707 Commercial And Corporations Law

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Gareth operates a car hire and event organization company. He had entered in to a profitable contract with two tour operators in Melbourne i.e Visit Victoria and Peninsula Tours. The tour operators use the cars for taking their high end customers on a sightseeing tour of Victoria’s top tourist attractions. He is also expanding his business. Over the course of the contract the following events happen.

1. The following happened in regards to the contract with Peninsula Tours. The agreement stipulated the provision of five cars with drivers every day. Due to resignation of drivers and breakdown of some of the cars, Gareth informed Peninsula Tours that he can only provide three cars per day while he recruits additional drivers. Gareth goes ahead and gets the cars fixed and hires additional drivers. He spent nearly $7000. However, after two months Peninsula Tours demanded payment of compensation for the two cars not provided totalling $1200. Is Gareth under legal obligation to pay the compensation? What if Peninsula Tours changes its mind and decides to take the three cars only after Gareth had spent considerable amount of money for fixing the two cars and hiring drivers?

2. In addition to his tour operation business, Gareth also owns an event organisation business. One summer he organised a music concert at a winery in Yarra Valley. For this purpose he hired a Melbourne based Event Rental Pty Ltd to provide large tents, portable stage, electrical sound systems and marquees. Two days before the event, a car delivering the equipment was involved in a serious accident and the delivery items were destroyed. The singer refused to sing given the sub- standard sound system that Gareth brought at the last minute from a neighbouring wine estate. Julie who travelled from inter-state for this occasion to celebrate her birthday is seeking a compensation for the disappointment she suffered in addition to refund. She is seeking $1000 for the disappointment and a refund of $800. Discuss the rights and obligations of the parties in light of the law.
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