Ben is the CEO of Moon Pharma Pty Ltd ("MPP"), which is an Australian importer of COVID-19 vaccine "Provaxin" from the UK. Benrings PharmacyTransport Experts ("PTE") and speaks to Shane the Manager about MPP's requirement.

"The vaccines are to be collected from the shipping dock at Sydney when they arrive from the UK each month and transported to our client, Monash Hospital. As thevaccines are highly sensitive to fluctuation in temperature we are looking for a transporter who has refrigerated trucks. The vaccines are to be maintained at a precise temperature (-20C to -25C). If this temperature is not maintained it will not meet regulatory requirements and cannot be used. Is PTE able to do this job and maintain the temperature as required?"

Shane replies to Ben

"You have come to the right place. PTE has got 20 years of expertise in the transportation of vaccines. We have refrigerated trucks that can maintain the required temperature for storage. Your vaccines are safe in our hands"

PTE and MMP enter into a signed contract for one year. The contract involves the collection, of 5000 Provaxin each month from Sydney and transported in a refrigerated truck to Monash Hospital.

The contract contains the following clauses:

Clause 08: PTE guarantees that at all times i.e. during transportation vaccines will be kept at the required temperature range (-20C to -25C)

Clause 09: PTE must monitor the temperature of the vaccine every hour and record it in a logbook. The logbook should be sent to MPP immediately after delivery of each month's vaccine to the client (Monash Hospital).

The first three batches of vaccines are transported without incident.The logbook is also maintained and sent as per the contract to MPP.

The fourth and fifth vaccine batches are transported in a refrigerated truck at the required temperature (-20C to -25C).However, thetemperature logbook has not been maintained as per the terms of the contract. The temperatures are noted every three hours instead of every hour.Ben is unhappy when he sees the logbook and wants to terminate the contract with PTE. Neither Shane nor any other person at PTE had read Clause 09 and it had not been discussed during the oral negotiations.

Part A:

Advise Ben. In the course of your answer advise whether MPP can rely on Clause 09 and, if so, whether MPP can terminate the contract as a result of its breach

Whatever your answer to Part A, assume that MPP doesnotterminate the contract following

Shane's assurance that in all future shipments the transportation logbook will be maintained in accordance with the terms of the contract.

The sixth vaccine batch is collected from Sydney and loaded in a refrigerated truck. The PTE truck driver sets the fridge temperature to -15C to -20C instead of -20C to -25C. After the Provaxins are delivered to Monash Hospital, the logbook is sent to MPP. Ben is furious to see in the logbook that the correct temperature has not been maintained.

As a consequence, MPP has to order another batch of vaccines (cost $30,000) and dispose of the ineffective vaccines at a medical waste recycling centre (cost $800). The incident is leaked in the media and a newspaper headline says "MPP not the right choice for supplying Provaxin in Australia" The Board of the Royal Melbourne Hospital (RMH) that had been planning to award a $5m contract to MPP for the supply of Provaxin has now decided to award the contract to its competitor Sun Pharma.

Ben is furious and wants to terminate the contract with PTE and sue for any losses or damages.

Part B:

Advise Ben whether (a) MPP can terminate the contract with PTE and/or (b) sue for any potential loss or damages including the loss of the RMH contract