A charity organises a special fundraising event to be held in a large public entertainment centre in Sydney. Tickets are $100 each and the centre accommodates 2,000 people. The charity engages Bozo, an experienced clown and circus performer, to provide a full troupe of performers for two hours' entertainment on the evening. Bozo is to receive 30% of the total revenue derived from the ticket sales for the event; the sum is to be paid two days after the performance.

Once the contract is signed, Bozo expends a significant sum ($35,000) in engaging other performers, acquiring costumes, materials etc and rehearsing for the event. Two weeks before the event is to be held, the CEO of the charity phones Bozo and tells him that ticket sales were not as strong as expected; the charity has to cancel their contract with him, to keep costs down. (You may assume that this is a repudiation of the contract). The CEO of the charity adds, spitefully, 'This is actually a good excuse to cancel your contract anyway - I thought your act was terrible'.

Advise Bozo on his right to recover in the following alternative situations:

Bozo accepts that the contract is terminated. A clause in the contract provides: 'Penalty to be paid to Bozo in event of cancellation of contract by charity: $50,000". Bozo wants to recover this sum.

Advise Bozo. Would you answer differ if you learned that Bozo and the troupe had performed another concert on that night and earned $10,000?