CONTRACT LAW FOR MANAGERS Assignment 2: Answering Hypothetical Contract Law Problems Part A (60% of available marks) The Scenario Charlotte is a successful entrepreneur who is always out to...

CONTRACT LAW FOR MANAGERS

Assignment 2: Answering Hypothetical Contract Law Problems

Part A (60% of available marks)

The Scenario

Charlotte is a successful entrepreneur who is always out to surprise her friends, high society and

her important international contacts. In November 2014 she decided to stage a production of the

modern rock musical ‘Bare:


A Pop Opera.
’

Controversial and innovative, it would be the highlight of

the 2015 theatre season.

She offered the challenging lead role of ‘Jason’ to her long-time best friend and highly regarded

singer Jonah Pleatt from Los Angeles. The musical would be performed 4 nights a week for a

season spanning 1 May 2015 to 13 June 2015.

While there was an understudy for the role of ‘Jason’, Charlotte made it clear that Jonah must

perform for the last 2 weeks (from 30 May 2015 to 13 June 2015), as it coincided with the highlight

of the social season of
Vivid Sydney
- a time when all her important contacts and friends would be

visiting. She needed to prove that she could stage amazing productions.

A contract was negotiated and signed on 7 January 2015. The following are the key clauses for

consideration in this scenario:

1. Jonah will be paid a fee of $60,000 to sing in the musical ‘Bare: A Pop Opera
’

for the entire

season.
This payment will cover all rehearsals, agreed publicity appearances and

performances.

2. Jonah is to be provided with 2 weeks of leave. The time of leave is to be agreed upon prior to

11 March 2015, on the understanding that Jonah must make himself available to perform.

He cannot take leave on the dates between 30 May 2015 and 13 June 2015.

All proceeded well. Rehearsals were successful and Jonah and Charlotte both agreed to his

leave from 11 May 2015 to 24 May 2015.

After the first week of performances, there was a celebratory first week after-party that continued

late into the evening. Charlotte’s happiness was overshadowed when she became victim of a

devious cast member, who spiked her drink. She was soon affected and disoriented.

It was then that Jonah approached her, indicating he wanted to change his leave dates to 30 May

through to 13 June. He said his partner had booked a cruise over those dates and could not cancel

the booking. Already talking gibberish, Charlotte became delirious and frantic. She begged Jonah

not to go. She pleaded with him to honour the arrangement, finally writing on a napkin with her

lipstick and handing him this offer:

‘Plz


don’t


go!!! U can have +$20,000 if u

stay!!!.’

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The next day Charlotte only had vague memories of the party. She met with Jonah for their usual

afternoon coffee. During the conversation he showed her the napkin and her written offer of $20,000

if he performed over the period 30 May to 13 June 2015.

‘Did I do that?’ she sighed. “That doesn’t look like something I’d usually do.”

The successful season ended. Jonah performed on those important dates and Charlotte paid the

$60,000. But Jonah demanded payment of the extra $20,000, in accordance with the napkin

arrangement. He was becoming hostile and threatening legal proceedings.

Charlotte’s son Peter was watching her slowly wilt under the pressure being applied by Jonah. She

was struggling financially, due to a previous failed venture. Peter approached Jonah and offered to pay

$10,000 to settle any debt Charlotte may have outstanding. He didn’t know if the debt was due or

even payable, but wanted to take pressure off his mother. Jonah accepted and he banked the

$10,000. However, he still planned to recover the balance of $10,000 from Charlotte via legal

proceedings.

Task:

1. Was there ever a contractual obligation for Charlotte to pay the extra $20,000 to Jonah?

2. If there was, has Peter’s actions discharged the debt?

Do not discuss employment law. Limit your answer to contractual principles covered in this course.

Part B (40% of available marks)

Soon after his 75th birthday, Stanley Somber (SS) retired from his position as a tenured university

professor. He was having difficulty recalling the names of his students and found that he continually

needed to remind himself of material, which in some cases he had taught for over 45 years.

SS decided to dispose of many of his worldly goods so he could raise enough money to pay for his

retirement property. He was delighted when a prospective purchaser for his beloved Holden Monaro

introduced himself as Horace, a favourite student of SS from a class in the ‘90s. They reminisced with

the aid of a student yearbook that Horace had brought with him. Looking through it, SS suddenly

decided to take $5,000 off the asking price, just for Horace. SS signed the transfer documents.

After hearing about SS’s plans to move, Horace recommended that he contact one of his friends,

Snakey Deslipp (SD), who owned the Sunny Acres Retirement Home.

The following day SS met with SD, who was persuasive with facts and figures. It was very confusing.

SS had made it clear from the outset that he was only starting out on a fact-finding mission, but by the

time they parted, SS had signed a document under which he had not only purchased an apartment at

Sunny Acres, but also agreed to pay monthly rent.

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