Contract law Case Study

Josh and Emma, recent college graduates, always dreamt of opening their own caf. While studying, they were talking and sharing ideas of their dream caf and, shortly after finishing their studies, they decided to get into a partnership to open a business together. The new partners wrote a very inspiring business plan and got a loan from the bank for their dream caf which they are calling Dream. They found suitable premises and signed the lease but would need to refurbish the office space to set up their cafe. They needed to connect the electricity, water, and telecommunications in the business name. To make the space suitable for a cafe Josh used his father's recommendation to hire an architect, who had his own team of builders. The plan for renovations was made and the team promised to finish the refurbishment by the end of the month. In a meantime, Emma, who loved decorating, was consulting her sister-in-law, an interior design student about the interior of the cafe. The menu was a collaboration of Josh's, Emma's, and another of their classmate's ideas all put together. The plans for the cafe opening were running smoothly, the furniture for the cafe was ordered by Emma and her sister-in-law and had to be delivered the following week. All the required ingredients were ordered from one supplier, the arrangements all set. The opening was planned for a set date, family and friends were invited to be the first judges of the food. Emma was in charge of the front-of-house team and the service and Josh of the kitchen and food. Staff hiring was in process, they had found two young Chefs and a barista already. The problem was to find a kitchen hand and a waiter or two. They decided to hire Emma's nephew, James, who was on summer holidays at the time, for dishwashing. James requested that he be paid cash in hand given it was for such a short time. Two teenage high school girls were hired as waitresses. All staff members were given a standard written employment agreement, except for James, with normal probation, a notice period of two weeks, etc. The start date was linked to the opening date of the restaurant.

The week before the opening they got a call from the Architect that construction is delayed due to missing items that needed to be shipped in. If they want to meet the opening deadline it will cost more than the agreed cost because the materials available in the city are much more expensive than the ones that were ordered and needed to be shipped in. The team decided to postpone the opening for one week, notified suppliers about the new delivery dates and new staff, families, and friends about the new opening date. The day that furniture had to be delivered to the venue, Josh finds out that the architect hired another person to do the interior design, without letting him or Emma know about it. Two different sets of chairs and tables were delivered on the same day as they were ordered by two different interior designers.

A classmate who helped design the cafe menu was struggling to find a job and started asking for payment for his contribution to shared ideas. Dealing with all the new issues took a lot of extra time, so the opening was again postponed for one more week. A few days before the second postponed opening both of the chefs called and said that they can't wait anymore and had found new job opportunities. The following day the barista called that she was in a car accident and won't be able to work on the opening night. The day before the "grand" opening of the cafe Josh and Emma just had James and two teenage untrained waiters to help them.

Questions

1. How many contracts are implicitly featured in this case study? List and briefly describe each one of the respective contracts (including both formal as well as informal contracts).
2. What are the 6 Elements needed for a contract? Use one of the contracts you listed in question 1 and describe in detail each element of that contract in context.
3. Does the classmate have any right to ask to be paid? Explain your answer with reference to the relevant legislation.
4. Did the Architect breach the contract for not completing the work on time? Explain and support your position in the case.
5. When the Architect said they could not meet the deadline should Josh and Emma have asked for legal advice? If so, what legal advice do you think they would have received?
6. The architect has billed Emma and Josh for the interior design work. What are their legal rights and are they obliged to pay? In regard to staff:
7. What are the legal obligations of the Chef's to Dream Caf? What can Josh legally demand from them?
8. Is there any legal problem with the recruitment of James? Explain your answer.
9. Is there anything that Emma needs to consider in when employing the two waitresses?
10. What remedies and damages do you think Josh and Emma can claim for the problems they have encountered with the opening of the cafe?