LAWS20058 AUSTRALIAN COMMERCIAL LAW
ASSESSMENT 1- WRITTEN ASSESSMENT
· Weighting: 40% of total grade
· Due Date: Week 7 Tuesday (30 Apr 2019) 5:00 pm AEST
· Word limit: 2000 words
· Submission: Submission to be made via the Dropbox on Moodle
· Format: One file in .doc or .docx (MS Word) format. Submissions in any other file format (e.g. .zip) will be treated as a non-submission.
· References should be footnoted, using the Australian Guide to Legal Citation. A reference list should also be included (references do not form part of the word count).
INSTRUCTIONS
This is a problem-solving assignment. You must address all 3 parts of the assignment question.
PART A
Heidi has been the assistant store manager of a highly successful coffee chain, Caffeine Stop Pty Ltd. Having worked at the coffee shop for the past four years, she has decided that it is time to start her own coffee shop. Her idea is create a place that is relaxed and vibrant, providing her customers with high quality coffee and delectable breakfast snacks such as parties and cakes. She forms a company, Roast the Day Away Pty Ltd.
Heidi’s first task is to procure a coffee machine. She drives to her local industrial area where she knows several coffee suppliers have factory outlets. As she drives down the main road, Heidi notices an advertisement placed in front of Machine Express Pty Ltd. The advertisement reads:
“The NewBean Coffee Machine has arrived in store! To celebrate you can purchase your NewBean Coffee Machine at half price. We have boxes and boxes so come in and get yours.”
Heidi immediately stops the car and rushes in to the store. She approaches the assistant manager and says, “I would like my half price coffee machine.” The assistant manager sighs and regretfully replies, “I’m sorry. That deal is no longer being offered. The coffee machines were selling too fast.”
Heidi is completely shocked by this and demands that she receive her half price NewBean Coffee Machine as advertised. “The sign outside is an offer and you are obliged by it,” she informs the manager. The manager shakes his head, “The sign is just an advertisement. We are not legally obliged by it.”
Heidi is very disappointed by the situation and feels that Machine Express Pty Ltd should take responsibility.
The manager sees Heidi’s disappointment and quickly provides a solution. “We do have the premium model of the NewBean Coffee Machine at 20% off today.”
Heidi really needs to the coffee machine and so decides to forget the half price standard NewBean coffee machine. She looks at the premium model of the NewBean Coffee Machine and is impressed with its size and capabilities. The price, however, is not so impressive. Heidi inquires whether the manager can do anything further with the price to which the manager replies, “Not on a brand new machine, however I can offer you the white floor stock machine at a further 10% off.”
Heidi is very keen on the idea, however the premium model of the NewBean is significantly larger than the standard model she had planned on buying. She tells the assistant manager that she will need to go and measure the space in her shop to make sure the machine fits. The assistant manager replies, “of course. The offer is open all day.”
Heidi leaves Machine Express Pty Ltd and goes straight back to her store to measure the space. Seeing that the machine would fit perfectly, she quickly stops for lunch and then rushes back to Machine Express Pty Ltd. To her dismay, as she is walking in, she sees another customer carrying out the white premium model NewBean. When the manager sees her, he immediately says, “You should have been faster. I couldn’t wait for you when the machine may not have fitted your store. I sold the machine a couple of minuted ago.”
Heidi is absolutely appalled and wants to take legal action. She wants advice on the following:
1.
Whether the advertisement for half price NewBean Coffee Machine is an offer or an invitation to treat
2.
Whether she has a claim against the manager for selling the premium NewBean coffee machine to another customer
PART B
Heidi arrives late for her last shift at Caffeine Stop Pty Ltd. She has been very open and honest with the store manager, Gertrude, about her hopes to open her own coffee shop and while discussing her resignation over coffee two weeks ago, the manager was very supportive.
When Heidi comes into the store and grabs her apron angrily, Gertrude is concerned. Heidi recounts the events of the morning with the two coffee machines and her annoyance at Machine Express Pty Ltd. Gertrude listens and while handing Heidi a tray with three coffees for the back table, says, “Don’t worry about it at all. You can have one of our retiring machines at a great price. It is at least something to start off with.”
Heidi is pleased by this offer and quickly accepts, thinking how much easier opening the store will be when she has a machine is already familiar with. She tells Gertrude she will bring in the money next week.
However, when Heidi arrives the next week Gertrude has had a change of heart. Gertrude explains that she would like to see how much she can get for the machine online before making any concrete decisions.
Heidi is running out of time and was relying on the machine that Gertrude had promised. She would like to know whether a contract exists between Gertrude and herself.
PART C
Worrying that she will not have a coffee machine for her grand opening, Heidi orders the GreenBean Coffee Machine from Coffee Supplies Fast Pty Ltd, a company specialising in fast coffee supply deliveries. The machine arrives just in time for Heidi to hang the open sign on her door.
The first few coffees that the GreenBean makes are very good and customers seem really happy. However after one hour, the machine gets very hot and the coffee that comes out tastes burnt and smoked. Heidi is forced to stop making and selling any form of coffee. The only goods she has left to sell are pastries and cakes. However none of her customers are interested in the snacks without a coffee. Heidi has lost all her profits for the first day of the store being open. She quickly calls around until she finds a coffee machine supplier who has the NewBean Coffee Machine in stock. While it is not on sale, Heidi knows it is reliable. She does not open Roast the Day Away again until the NewBean arrives one week later. She has lost significant profits because of the the faulty GreenBean.
Further, one of Heidi’s main investors, Tate, comes by Roast the Day Away on day three of the store being closed. Seeing the store closed, the investor calls Heidi and informs her that he will be withdrawing his investment in her store.
Heidi would like advice. She would like to know what damages she can claim from Coffee Supplies Fast Pty Ltd for all the losses that she has incurred.