Django Pooch ('Django'), Terry Mar ('Terry'), and Willow Swadling ('Willow') are three friends from university.

On November 2023 they meet and agree to start a business. After extensive market research, they write up a business plan for a cafe which they name "The Naked Cat". They immediately go online and register this business name in their names. They discuss and make note of the assets they each have:

Django only has a small van worth $10,000.

Willow has the following commercial grade assets: A refrigerator, freezer, coffee machine, coffee grinder, and display cabinets for cakes etc.

Terry has recently inherited $50,000.00, which she has in her savings account. Django, Terry, and Willow agree on the following:

1. Willow will register a company named Naked Cat Pty Ltd with Django, Terry, and Willow being Directors and each holding 1 share each.

2. Django, Terry, and Willow enter a lease for a small shop space from which to operate the cafe.

3. Django will provide the van to the business which they also agree has a value of $10,000.

4. Willow will provide the refrigerator, freezer, coffee machine, coffee grinder, and display cabinets to the business which they agree has a value of $10,000.

5. Terry will provide $10,000 to the business. 6. Profits are to be shared equally.

7. The business will run 6 days per week. Each day the caf is open, 2 of the 3 will be at the business giving the other person time off. The schedule is as follows:

8. The person who opens the caf will arrive at 5am and collect coffee beans, milk, and food for sale. 9. The person closing the caf is responsible for the cleaning and removal of rubbish and leaving a note for the person who opens the next morning.

10. As Django closes the caf on a Saturday and opens it on a Monday, he will take the van home to wash it. On 24 November 2023, they receive the keys to the premises, and they fit out the shop

On 27 November they enter into a contract with Isla Beans Pty Ltd ("Isla Beans") with the following terms:

20 kg beans delivered to the premises on Monday, Wednesday, and Friday each week. The cost is $300 per 20 kg bag including delivery.

30 days' notice in writing, including email, is required to cancel the order.

On Friday, 1 Dec 2023 at 6am, the caf is opened for business selling coffees and treats and proves to be very popular.

On 19 January, Django orders a new coffee machine, the z900, from Speedy Caf Supplies for $8000 for the Naked Cat. The machine arrives the next day and he takes the old machine home that evening. On Friday, 1 February, Django registers a business name for himself named "Cat's Coffee & Cream" and registers it through an app for deliveries between Saturday 6pm and Sunday 11pm. He uses the coffee machine that was replaced at his home for making the orders and uses the van for deliveries. Willow and Terry are unaware of this development.

On Saturday 2 Feb, after closing the Naked Cat at 6pm, Django starts taking orders for his own business. By the end of February, the Naked Cat extremely popular and they are finding it hard to keep up with demand. They employ Moose to assist with serving of food and to take care of any deliveries.

On 1 March, without discussing with the others, Django, who is not satisfied with the coffee beans, signs a contract with Possum's Pouch who provide specially roasted coffee beans for $295 per $20kg bag. This contract allows them to order via text and the beans are delivered 6am the next morning.

On 4 March, Django sends a text message to Isla Beans which says:

On 4 March, they enter into a contract with Amanda's Amazing Art for a painting of a cat they want to display in their caf. The painting is to be delivered by 15 March at 5pm at the latest. They send $5000 to Amanda.

On 7 Mar, Moose is out delivering food when he has a car accident. Maria the driver of the van owned by "Maria's Muffins" screams at Moose "I am going to sue you for all the damage to my van". The damage amounts to $5000.

On 15 March, the painting is collected from Amanda's Amazing Art at 8am by a courier company Jaya's Journeys. Jaya, the driver stops to get a milkshake on the way. Whilst in the shop, Jaya's Journeys van is stolen and at 4pm the police contact her to inform her that her van has been found burnt out and the painting destroyed. Jaya contacts the Naked Cat and Terry answers the phone and is informed of the painting.

At 5pm 15 March, Willow registers the Naked Cat as a Company. As of Friday 15 March, coffee beans had been delivered from Isla Beans to the Naked Cat on the following dates: Wed, 6 Mar, Fri, 8 Mar, Mon, 11 Mar, Wed, 13 Mar, and Fri, 15 Mar along with an invoice for $1,500 for the beans delivered on those dates

Answering Questions 1 and 2 On Monday, 18 March, Terry attends your office seeking legal advice. Take note of the following: When answering questions 1 and 2, you must use the IRAC method (Issue, Rules, Application, Conclusion).

Answer Question 1 separately to Question 2. That means each question has a main heading and subheadings for Issue, Rule, Application, and Conclusion.

Question 1: Business Entities - 24 marks Discuss Terry's rights and liabilities with regards to the structure of the business. Support your response with relevant case authorities. Remember: What business entity exists and what are each parties' obligations.

Question 2: Contract Law - 26 marks Discuss the contractual rights and liabilities the Naked Cat has with: a) Isla Beans Pty Ltd, and b) Amanda's Amazing Art. Support your response with relevant case authorities. Students MUST use the IRAC method (Issue, Rules, Application, Conclusion) to answer

Question 3: Contracts short answer questions - 10 marks Support your answers with relevant case authorities. Do NOT use the IRAC method to answer the following questions. Choose only 2 questions to answer from the following 3 questions (Do NOT answer all 3): a) What is 'consideration'? When is consideration needed to be present in a contract? What rules apply for consideration? b) What is the difference between representations and terms? When are terms implied into a contract, and what is their effect? c) In the case Public Service Employees Credit Union Co-Operative Ltd v Campion (1984) 56 ACTR 39, what did the court decide and why? Limit your answer to between 100 to 150 words for each question you choose to answer.