Objectives

Answer the following questions with reference to the relevant common law and equity principles operating in Australia concerning contracts plus related and other transactions. Do not consider the effects of legislation potentially applicable other than that specifically identified. Students may make whatever additional factual and/or legal assumptions are necessary or convenient. And students must write about 2000 words, or about 500 words per 10 mark allocation.

Question 1

The University of Millennia called for tenders for supplies of green seed for its surrounds, with a closing date of 1 June.

The following tenders were submitted:

- Greenland hand-delivered its tender on 29 May, which went into the tender box.
- Enviro posted its tender on 15 May. This letter was received by the University on 17 May, but, by being submitted so early, one of the administrative assistants filed it with the intention of later putting it in the box when she was properly organised.

- Plant Forever posted its tender on 30 May. This letter arrived on 2 June but nevertheless was put into the tender box.

It transpired that only two of the tenders were considered by the relevant administrative officials of the University. Although the tender by Enviro was the lowest and contained the most attractive features, the administrative assistant forgot where she had filed it and did not find it again until a week after the decision was made.

Greenland's tender was the next lowest, but because of rumours about its unreliability, the University awarded the contract to Plant Forever. The University posted a letter to Plant Forever advising that its tender was successful. Unfortunately, this letter never reached Plant Forever because it was destroyed by a disgruntled postal worker who had just been made redundant. Since it had not heard from the University, Plant Forever instead committed its full stock of seed to another contract with a regional council.

The University became aware of the full situation concerning the tender by Enviro and the position in which Plant Forever now finds itself. It seeks advice concerning its contractual position in relation to all three tenders.

Question 2

On 1 October Footloose Pty Ltd placed the following notice in the Daily News newspaper: Special Shoes Special Discounts

Footloose Pty Ltd is awaiting the delivery of the latest summer collection shoes from Italy. Styles include the new slingback sandals and wedge heels. Prices start at $2000 per hundred pairs (certain styles only); big discounts may be negotiated for bulk orders. All inquiries to Ms Simone, Sales Manager, on 1400 765 432 or by fax on 06 9234 567.
On 2 October Famous Footwear sent the following fax to Ms Simone:
We accept your offer in the Daily News. We wish to order 500 pairs at $2000 per hundred. Details on delivery to follow.
On 4 October James, the owner of shoe retailer James's Shoes, which had several regional stores throughout Australia, sent the following fax to Ms Simone at Footloose:
We refer to your notice in the Daily News and would like to purchase 2000 pairs of slingback sandals. Our best price is $30,000 including GST and delivery. Please advise.
On 6 October Ms Simone sent the following fax to James:

Footloose will sell 2000 pairs of slingback sandals for $30,000, excluding delivery. Payment by cash or bank cheque is due on delivery.

Please advise.

James immediately wrote the following letter to Ms Simone, which was mailed on 8 October:

We refer to your fax of 6 October and are prepared to meet you on those terms. Please let me know the earliest delivery date.

On 10 October Ms Simone telephoned James. After a short discussion James faxed Ms Simone a copy of the letter of 8 October. The parties agreed that James's Shoes would take delivery of the sandals from Footloose's Sydney warehouse on 1 November.

Referring to relevant case law and giving reasons for your propositions, discuss the legal effect of each of the forms of correspondence between Footloose, Famous Footwear and James's Shoes that took place between 1 October and 10 October.

Question 3

Richard Anderson is a talented chemist at Cube Laboratory Pty Ltd. Under his guidance, the lab had been particularly successful in attracting research grants and government contracts. His five-year contract with the lab was due to expire on 30 June. In late February he was "sounded out" by headhunters for the chief chemist's position at a rival lab. Taking this job would require Richard to relocate his family interstate, his wife needing to find a new job and his children changing schools.

On 1 March, Richard approached Warren, the chief chemist at Cube, and told him about the discussions he had held with the headhunters. Richard said:

"It is a good offer, Mr Warren. But I'm rather avoid the disruption for the wife and kids and stay here."
Warren replied:

"Richard, you are an important part of this team. You've played a big part in our recent success and we're keen to keep that going."
Richard formed the impression from this that Cube intended to extend his contract for the next five years. He said that that was "great" and immediately telephoned the headhunters and knocked back their proposal. He then returned to work with Cube and did not raise the matter again.

On 25 June, Warren took Richard aside and told him that, because of a "slight liquidity" problem, Cube was retrenching large numbers of staff and was forced to "let him go". Richard looked unsuccessfully for work in a depressed market for chemists until finally found a position at a university, but at a fraction of the salary he was earning in private practice. However, his wife still has the same job and his children still go to the same school.

Advise Richard fully whether he has any claim against Cube.