700254 - Enterprise Law - Business Entities - Terms of Contract - Law Assessment Answer

700254 - Enterprise Law - Business Entities - Terms of Contract - Law Assessment Answer

Task:

Question One (Contract law) – 700254
Daniel owned a home in Castle Hill and wanted to have the area around his new swimming pool paved and landscaped. He contracted with Brandon, a local landscaper, for the work to be done on the basis that Daniel would supply, at his own expense, all the necessary plants, materials and supplies, and that Brandon would supply the labour and any equipment and machinery necessary to do the job. Brandon’s fee under the contract was $40,000, to be paid upon completion of the work.
In the course of the work it was realised that Daniel had over-ordered a number of expensive and exotic flowering shrubs. When Brandon asked what Daniel wanted done with them, he replied that Brandon could keep them. Brandon duly had the flowering shrubs planted on his own property, thereby considerably enhancing the value of his home. A month later, when all the work was done, Brandon presented his account for payment to Daniel. Daniel asked if Brandon would accept $25,000 in full settlement of the account, explaining that he had just received a notice from the local council requiring him to upgrade the fence around his swimming pool, in line with new legislation, before it could be certified for use. Daniel further explained that, if Brandon accepted a reduction in his contract fee, Daniel would be able to get his fencing contractor to complete the work the next day, and thus Daniel would be relived from having to approach his bank for a loan. This would take some time to approve, and would potentially delay the fencing work, and the compliance certificate for the pool, by about a month. Brandon, who had earlier appreciated the flowering shrubs that Daniel had given him, decided that he would accept the $25,000 in full settlement of the account. Daniel immediately paid Brandon the $25,000. Five days later, Brandon received an unexpected courier delivery of a case containing half a dozen bottles of expensive Irish whiskey. A note attached to it read: You wouldn’t believe it, but two days after the fence was completed and paid for, I won over $500,000 on Lotto! My family and I plan to spend the next few months holidaying in Europe. So, it’s live and let live. The booze is a token of my appreciation for the excellent work you did. Cheers Daniel.
Brandon now feels that Daniel should pay him the full amount of his fee on the landscaping contract.
Using IRAC, advise Brandon on his prospects of recovering the $15,000, and in doing so, discuss fully all relevant legal issues that arise in these circumstances. Your answer must be supported with relevant case law authorities.

Question Two (Business entities) –700254
Rebecca and Joel decide to go into business together following the completion of their studies at university. After extensive market research they write up a business plan for an online florist to be named Fusion Flowers.
Joel has recently inherited $50,000.00 which he contributes as start-up capital. Rebecca doesn’t have any savings but contributes her van, tools and other equipment. They agree to lease a small warehouse space from which to operate the business.
The pair agree that Joel will pick up the flowers each day from the Flemington Markets while Rebecca will manage all customer enquiries and both will undertake deliveries. Profits will be split 50:50.
After the first two weeks of operations, they are struggling to keep up with the orders and decide to hire Matthew to take care of deliveries.
Over the next month the following events unfold:
(a) Without asking Rebecca, Joel orders some very rare (and expensive) orchids from Ooh Orchids believing that he would be able to sell them, however, Rebecca says she never would have agreed to this if she had been asked. Ooh Orchids has demanded payment of the outstanding invoice of $1,500 from Rebecca.
(b) While delivering some flowers the delivery driver gets caught in heavy traffic. Under pressure from Rebecca to get the flowers delivered on time to “a very important customer”, Matthew is speeding and crashes into a car stopped at a roundabout. Nobody is injured and the flower van is protected by a bar at the front, however, there is $5,000 of damage caused to the other driver’s car.
(c) Without consulting Joel, Rebecca started a separate business selling flowers specifically for weddings. So far Fusion Flowers haven’t been supplying flowers to events as it would increase their insurance costs, however, Rebecca and Joel have previously discussed the lucrative nature of supplying the wedding industry.

Discuss Rebecca’s potential liability. Support your response with relevant case authorities.

Question Three (Terms of a contract) –700254
Dani and Steve want to open a hairdressing and beauty salon together in Paddington, an inner suburb of Sydney. Together they have located and secured a perfect site, subject to the local council approving their building and development plans. They plan to call their new venture Bed Head.
After an extensive search, they have now decided on a building and shopfitting contractor that they want to use to complete the work. The contractor, Clean Cut Builders, has sent over their standard contract for the job, and Dani and Steve have asked their own solicitors to look it over.
The lawyers have identified three terms in the contract that they believe need to be reviewed more closely before Dani and Steve commit to the agreement.

For each of the three terms above:
(a) Explain what type of term it is, and
(b) Discuss the characteristics of that type of term;

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