Task

This assignment requires you to answer two problem-type questions using the ILAC (Issues, Law, Application, Conclusion) format, a worked example of which is in the Resources folder.

Please note that the word limit of 2 000 words is a total for both questions (ie it is not 2 000 words for each question) including references and bibliography. I would however expect that students should be able to answer the questions in far less than 2 500 words.

**In this subject, assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format, NOT as a PDF document. If you submit in PDF it will not be able to be marked."

## If you think you may need an extension for this assignment, please read the rules relating to extensions in Appendix 1 of this Subject Outline before applying for an extension. ##

Question 1

Executive Car Fleets Ltd sells cars. It employs Dan Richardson as its Vehicle Sales Manager. One of the major customers of Executive Car Fleets is Speedy Auto Hire Ltd. Richardson has often signed contracts on behalf of Executive Car Fleets Ltd with Mark Fraser, Vehicle Purchasing Manager of Speedy Auto Hire Ltd. Richardson has been negotiating with Fraser to sell 30 Mercedes Benz 450SE sedens to Speedy Auto Hire Ltd.

One Thursday at about 9.00 am Richardson sends an email to Fraser which says "My supervisor has approved the price of $ 50 000 per car. Come to my office at 4 pm this afternoon to sign the contract." At 1.30 pm, Richardson sees Mary Jones, a University friend of his, who now works at Speedy Auto Hire Ltd as its Company Secretary. She says "I have had such a tense morning. Mark was in tears - apparently our Managing Director has asked to see him because of his bad performance this year - I think he will be fired".

Back at his office, Richardson tells Johnson, Chief Financial Officer of Executive Car Fleets Ltd, about the conversation he (Richardson) had with Mary Jones, saying "I really think there is a problem here, I think Fraser may have been fired". Johnson gets angry and says "Look, we're getting a good deal, don't worry about what is going on at Speedy Auto Hire".

At 4 pm Fraser arrives at Richardson's office and signs the deal to buy the vehicles for a total price of $ 1 500 000. The next morning he gets an phone call from the Managing Director of Speedy Auto Hire Ltd who says 'We aren't buying those cars you were negotiating with Fraser about". When Richardson tells him that Fraser had signed the contract at 4 pm the day before, the MD of Speedy Auto Hire responds 'Tough luck, we fired him at 2 pm yesterday, so he did not have authority to buy the cars". Assume that all the above facts come out in evidence in court. Advise whether Executive Car Fleets Ltd will succeed in a legal action to enforce the contract, citing statutory and case law authority.