MLC101: Contract Law and the Australian Consumer Law - Law Assignment

Internal Code: MAHOZ3

Law Assignment:

Susan had been a manager at a number of successful bars over the last five years and had decided to finally open her own bar. She contracted with Prestige Designs, a well-known Melbourne company doing interior design and finishing work to design and build the interior of her bar. Susan believed that having the right internal design was essential for having a successful bar and communicated this to Prestige Designs in the course of negotiations. The contract called for all work on the interior of the bar to be completed by December 28th so that Susan could hold a special opening party for the bar on December 31 st. In anticipation of this event, Susan paid the airfare for four of her closest friends from the University of Brisbane to attend the opening evening. Given feedback from social media, Susan expected a large crowd at the opening event and expected to turn a significant profit. The total amount that Susan agreed to pay Prestige Designs was $40,000. Unfortunately, many of the employees working for Prestige Designs turned out to not have proper permission to work in Australia. The managers of Prestige Designs claimed not to know this, but when approached by Australian Immigration and Border Protection Officials, it became clear that a significant percentage of the workers did not have proper employment authorization, and were therefore prohibited from working. Because of heightened scrutiny, Prestige Designs was unable to hire sufficient new employees in time and had to inform Susan on December 22nd that it would not be able to finish the job on time. Question: 1) Advise Susan to whether Prestige Designs has any valid claim for payment under the contract, and if so, on what grounds. 2) Advise Susan as to whether she can sue Prestige Designs for the money spent on cancellation fees for the flights for her friends. 3) Assuming that Prestige Designs would be found to be in breach of contract, advise Susan as to what damages she would likely be able to collect, and briefly explain any difficulties she would have in collecting other damages.