FACTS

Sam, who was previously a world-class chef, decides to start a large-scale catering business, Uncle Sam's Bespoke Catering and Events. He sets up his business premises, then purchases high-end catering equipment. He now needs to hire a permanent bookkeeper for this large-scale project. Aaron, his nephew, is a professional bookkeeper currently employed at the local accounting firm, working from home. His mum, Mary, recently bought him a new Acer laptop to use for his work, as his work laptop was unworkable, and he does not want to ask his boss for a new one. Sam rings Aaron by videocall on his iPhone and describes his business to him. He asks him whether he would work for him as his bookkeeper. Sam tells Aaron that in the first year he will pay him $40.00 per hour, then moving forward he will pay him the standard $60.00 per hour. Sam tells Aaron that he wants to start his business very soon, so would need a response from him by Friday night, by way of a text message on his iPhone! On Friday morning, Aaron rings Sam on his phone saying: 'Uncle Sam, I will work for you! Good riddance to my old job.'

1. Is there an enforceable contract between Sam and Aaron? Answer this by considering whether as between Sam and Aaron there is an offer, acceptance, intention and consideration (8 marks)

Aaron informs his mum, Mary, about his agreement with Sam. Mary asks Sam to pay her $500.00, given that the laptop she bought for Aaron will be used for his catering business.

2. Does Sam need to pay $500 to Mary? (4 marks)

To publicise his business, Sam decides to set up a stall at the South Melbourne Market to showcase some of his gourmet foods. He sets up a very elegant display of his best goods, including some at- home meal kits. The at-home meal kits have a price tag of only $70.00 each. They sell very quickly, and only three are left. Teresa approaches Sam and tells him that she would like to purchase the 3 kits, but at $50.00 each. Sam says it isn't possible, but how about $65.00 each. Teresa says no, how about $60.00 each. Sam again says no, and advises her that his last price is $65.00 each. Teresa does not reply, but is distracted by her energetic toddler who points her attention to the nearby puppy. While Teresa is distracted, Sam turns to serve another customer, Peter. After attending to her toddler, Teresa then turns to pay for the at-home meal kits, but Sam says he has already sold them

2

to Peter for $65.00 each. Teresa is very angry. She says to Sam, 'but we had a contract, and these at- home meal kits are mine. I was going to cook them for my dinner party'.

3. As between Teresa and Sam, who made the offer? (4 marks)

4. As between Teresa and Sam, who accepted the offer and is the acceptance valid?

(4 marks)

Please focus on Q2