LAW514 : Commercial Law - Case Study Assignment

The Scenario :

Rajeev wanted to purchase a new car but only had $8000 to spend. He saw a car advertised in the NT News that he was interested in buying. He went to have a look at the car and told the car owner whose name was Paul, that he would buy it and signed the registration transfer papers on the spot, but would return with the money the next day. He did not leave a deposit. The next day, something important came up so he couldn’t go ahead with the purchase. Paul was very unhappy with Rajeev changing his mind. Q1. Paul has come to you for advice on whether any action can be taken against Rajeev as he had signed the registration transfer papers. He wants to know whether he is entitled to any damages or compensation money. (Refer to the relevant case law to support your answer). A week later, Rajeev decided to lease a number of rare paintings that came originally from Nepal from his good friend Bhanu for one year. The lease required Rajeev to insure the paintings for their value, however, he did not insure them immediately and one day soon after, Rajeev’s children accidently caused one of the paintings to fall off the wall severely damaging it to the point that it could not be repaired. Q2. Advise Bhanu whether rescission could be used as a remedy in resolving this issue with Rajeev. What would you advise Bhanu to do? Bhanu then decided to sell her house and entered into a contract to sell it to Shane who paid Bhanu a 10% deposit. In 6 weeks’ time, Shane was required under the contract (which was in writing) to pay Bhanu the remainder of the sale price of the house. A week before Shane was due to pay Bhanu the balance owing on the house, he decided that he didn’t want to purchase the house anymore and was prepared to lose his 10% deposit. Q.3. (i) Can Bhanu enforce the contract with Shane? Would damages or an injunction be appropriate in this situation? (Why or why not?) What remedy, if any, would you recommend? (ii) Explain why restitution would not be an appropriate remedy under the circumstances. NB. You must refer to the relevant case law to support your answer.