Question 1-

Jim is a dealer in rare car collectibles. He sends an email to some of his regular customers which says: ‘Hot Offer. A set of 1930s Dodge memorabilia, includes original manufacturer colour brochures, posters, and models. $10,000 or nearest offer.'

Rob receives the email and phones Jim immediately. Rob says, ‘I am interested in the memorabilia set. I will buy it for $8,000'. Jim says, ‘Great to hear you are interested, but $8,000 is too low. I will sell for $9,000.' Rob then says, ‘Can I pay $4,500 up front, and pay the remainder in a fortnight?' Jim, responded, ‘No, it needs to be $9,000 up front.' Rob says, ‘Okay. Can you hold the memorabilia for me for 2 days?' Jim says, ‘No problems.'

The next day, Rob decides that he wants to purchase the memorabilia and has organised the $9,000. He contacts Jim that day and asks Jim if Jim still has the memorabilia. Jim says, ‘Unfortunately, no. After I spoke to you, I received a call from Bernard and he purchased the memorabilia for $12,000. I said yes, the price was too good to refuse.'

Rob is upset. He says, ‘We had a deal Jim. You knew I was interested and you said that you would hold the items for me for 2 days. You promised. I was just calling you to say that I had the $9,000 and was going to organise a time to collect the goods.' Jim said, ‘I am sorry Rob, but we didn't have a contract, simple as that'.

Using relevant legal principles, discuss whether a contract exists between Rob and Jim.

Question 2-

Megan is a professional photographer and has been in the industry for several years. She specialises in wedding photography. She also takes nature and scenic photos which she frames or prints or mounts and offers for sale. Megan decides that she should create a website to help market her business and to provide customers with the options of purchasing the scenic photos via an online shop.

She goes to Tommy's Web Design and speaks to Tommy himself. She explains to Tommy that her business is photography and that the quality of the images on the website is very important to her. Megan asks Tommy, ‘Will you be able to build a website that provides rapid access to my images in high definition resolution?' Tommy responds, ‘Of course I can. No worries at all.'

Later, Tommy hands Megan an order form that describes the details of the services that he will provide and the costs. Megan fills out her details at the top of the order form (her name and contact details) and signs the order form at the bottom, where indicated. Towards the bottom of the form, there is some small print in red that says, ‘For terms and conditions, please see the reverse of this form.' Megan did not see this, and she did not turn over the page and read the terms and conditions. Under the terms and conditions it says, ‘Clause 3: Tommy's Web Design is not liable for any breach of contract'.

On the day that Megan's website launched, Megan discovers that the photographs are not loading quickly. And when they do load, they are not in high definition, they are only loading in regular resolution. She is not impressed. She thinks that Tommy has been careless in creating her website. She calls Tommy immediately and tells him that the images are loading slowly and are not in high definition as he promised. Tommy responds with, ‘That's not my problem. That was not in the contract. Besides, read Clause 3'.

Using relevant legal principles, discuss whether Tommy has breached the contract and if Megan will be able recover a remedy

Question 3-

Each year in Port Lincoln, the world famous Tunarama festival is held at the end of January. This festival is a huge tourist attraction, with thousands of people visiting Port Lincoln for the event.

Sam is the owner of one of the shark cage diving businesses in Port Lincoln called the ‘Jaws Experience'. Sam takes groups of customers out on his boat, plays some rock music underwater to attract the sharks (AC/DC works the best), and then throws the group into a cage so they can ‘swim' with the sharks.

At the start of December, Sam needed to get his shark cage repaired for the upcoming tourist season. He contracted with Kenny to collect, repair and deliver the cage. Sam always uses Kenny to repair his shark cage because Kenny is local and highly experienced. Kenny agrees to have the repaired shark cage delivered in the first week of January.

Kenny did not repair and deliver the shark cage until the start of February. Kenny did not provide any reasons to Sam why the repair and delivery was delayed. As Sam did not have a shark cage, he was not able to run any ‘Jaws Experience' tours (as customers were not keen on the idea of going in the water without a cage!). Sam had to cancel all of the tours that had been pre-booked over the Tunarama weekend, totalling over $20,000.

Sam also had to cancel a lucrative 5 day tour that had been booked by a dozen international business executives as a team building exercise.

Using relevant legal principles, discuss whether Sam can recover compensation from Kenny for the lost profits from the cancelled tours over the Tunarama weekend, and whether Sam can recover damages for the 5 day team building exercise.