LAW1500: Custom Boards Pty Ltd Case Study - Hugh Pearson - Law Assignment Help

Assignment Task:

Instructions
Using IRAC (issue-rule-application-conclusion) method, please answer the three questions below. In seeking to identify the relevant legal issue(s) within these questions, please refer to chapters 5, 6 and 7 of the required textbook in the first instance. Students are welcome to engage in some independent legal research to provide additional support for their answers, but students are not required to do so. In either case, the textbook should be your starting point. Pay careful attention to the final sentence or paragraph in each question. What are the key terms used? Review the sections of the textbook that deal with this term(s). When you are familiar with the area of law, consider what legal issue(s) exist based on the facts. Do not use the words ‘Issue’, ‘Rule’, ‘Application’ as headings or subheadings in your answer. Do not rely upon the Australian Consumer Law. The Assessment Moodle book on StudyDesk contains useful information regarding the preparation and submission of problem-based essay questions.

Question 1 (7.5 marks)
Tristram is the Director of Custom Boards Pty Ltd (‘Custom Boards’) in Burleigh Heads, Queensland. Over decades, Custom Boards has developed an international reputation for manufacturing high quality surfboards. In June 2020, Tristram decided the time was right to sell Custom Boards. Daphne has been a long-term customer of Custom Boards and when Daphne heard that Custom Boards was for sale she was immediately interested in purchasing the business. 

The next day Daphne hands Tristram a contract for the sale of Custom Boards. To protect her investment, Daphne included a term in the contract that would prevent Tristram from opening another surfboard manufacturing business anywhere in the world for 25 years. Tristram and Daphne sign the contract. 

Tristram quickly becomes bored in retirement and wants to know whether there is any way he can set up a new surfboard manufacturing business. Advise Tristram.

Question 2 (7.5 marks)
Fran Deleon is a self-employed interior designer in Brisbane, Queensland. Fran purchased a purpose-built computer for her business from Hans Curtis at Cyberica Pty Ltd (‘Cyberica’) in March 2020. In April 2020, Fran accidentally spills hot coffee on her new computer and the computer immediately stops working. Fran took the computer back to Cyberica in April 2020. Hans says that the repairs will cost $1500. Fran agrees to the repairs.

While her computer is being fixed, Fran gets a call from Jan Bowen who asks Fran to redesign her 10-storey commercial premise. This is a very lucrative opportunity for Fran. However, the redesign must be completed within 2 weeks otherwise Jan will take her business elsewhere. Fran agrees to the tight timeline.

Fran immediately calls Hans to ask when the computer will be repaired and explains the situation with Jan. Hans explains that the repair work is more extensive and expensive than he originally quoted. The repairs will now cost $3000. If Fran agrees to the increased price, Hans can have the computer fixed within two days.

Fran is furious and feels like Hans is taking advantage of the situation. Reluctantly, Fran agrees to the increase cost of repairs. Fran gets her computer back in 2 days and completes the redesign work for Jan. Frans wants to know if the contract with Hans could be unenforceable. Advise Fran.

Question 3: (9 marks)
Hugh Pearson recently celebrated his 89th birthday. For all of his working life Hugh has run Delivery Shuttle Pty Ltd (‘Delivery Shuttle’), a delivery and transportation business in Toowoomba, Queensland. Recently, Hugh has become increasingly forgetful. Initially, Hugh would forget minor details. More recently, however, Hugh’s mental faculties have noticeably declined. Hugh’s family have begged him to retire and sell Delivery Shuttle ever since February 2020 when Hugh was found by police lost and confused in the street behind his business.

In April 2020, Hugh decides to sell Delivery Shuttle. Hugh took out ads advertising the business for sale stating that “purchasing this business will make you richer than your wildest dreams!” Ira Rush sees the ad and is very interested in purchasing the business, especially given the very low sale price of $15,000.00. However, Ira does not have $15,000 in savings. During the ensuing negotiations, Hugh agrees to be paid in four monthly installments of $3,750. The agreement between Hugh and Ira is put in writing. In accordance with the agreement, Ira pays the first installment and Hugh hands him the keys to the business.

Shortly after taking over the business, Ira begins to doubt whether he’ll ever be “richer than her wildest dreams”. Although Shuttle Delivery has an outstanding reputation, Hugh’s prices were far too low and once Ira raised his prices Delivery Shuttle’s customers have gone to competitors. 

Ira is angry because he is not “richer than his wildest dreams” and clearly never will be. Ira wants to know if Hugh’s promise is enforceable? Hugh’s wife, Terra Pearson, has been appointed by the court to make decisions on behalf of Hugh. Terra, acting on behalf of Hugh, wants to know whether the contract for the sale of Shuttle Delivery could be unenforceable? Advise both Ira and Terra.
 

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