Appliced Contract Law Epick Pty Ltd (Epick Games) Case Study - Law Assignment Help

Assignment Task

Question
Epick Pty Ltd (Epick Games) enters into negotiations with big game developer Falcon Games to Develop an add-on for Falcon’s smash hit game Cranky Crash. The add-on needs to be developed as quickly as possible, and the parties agree to a five-week deadline. The parties agree to this deadline on the assumption that Epick’s programmers will be able to work seven days a week. Falcon agrees to Epick’s price of $150,000. The parties sign a contract containing Falcon’s standard terms. Epick employs talented programmer Terri Applegate to lead the programming for the contract. The programming commences and for the first week everything is on schedule. Falcon starts to promote the launch of the ad-on. However, the National Programmers’ Union finds out that Epick’s programmers are working seven days a week and it lodges a complaint with the Fair Work (Ignore any employment law that may be relevant in real-life). Fair Work declares that the programmers must only work five days per week and Epick has no choice but to comply. As a result of this, the five weeks programming now takes seven weeks and costs Epick an extra $50,000. Epic submits an invoice to Falcon for $200,000. Falcon is unhappy because it
had intended to release the add-on after five weeks and it claims that it has lost money due to the delay and so it will only pay $50,000 in total to Epick. Finance Manager, Mark Jones, comes to see you about the situation. He has heard about
something called ‘frustration of contract’. He asks you if this would apply to the contract between Falcon and Epick and, if so, what the outcome might be for Epick? Alternatively, he asks you if it might be reasonable to assume that, even though Falcon’s standard terms do not address this, there is an implied term in the contract that if the work costs more due to unforeseen circumstances beyond the control of the parties, Epick is entitled to charge more? Human Resources Manager Petra Small also comes to see you. She has received a letter from Kronos Games about Terri Applegate. Apparently, Terri was employed by Kronos prior to her coming across to Epick and her employment contract with Kronos contained a restraining clause stating that: “In consideration of the Employer paying the Employee 1 year’s additional salary upon any termination employment, the Employee agrees not to work for any of the Employer’s competitors in Australia for 1 year after termination.” Kronos wants Epick to pay compensation for Terri’s alleged breach of restrain. Petra ask you whether or not the restraint would be enforceable anyway? Using the 4-Step Approach and with reference to relevant cases, advise as to the following:
A. Whether or not the contract was frustrated and, if so, any effect and, regardless of what Epick might expect to get paid;
B. Whether or not there is an implied term that Epick would be paid more for delays due to unforeseen circumstances beyond the control of the parties: and
C. Whether or not the restraint against Terri Applegate would be enforceable and, regardless, if Epick would have to pay any compensation to Kronos

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