Group Assignment Question

Gareth operates a car hire and event organization company. He had entered in to a profitable contract with two tour operators in Melbourne i.e Visit Victoria and Peninsula Tours. The tour operators use the cars for taking their high-end customers on a sightseeing tour of Victoria's top tourist attractions. He is also expanding his business. Over the course of the contract the following events happen.

1. His contract with Visit Victoria requires him to provide eight cars every day in order to take visitors to tourist spots along the Great Ocean Road corridor. After two months, Gareth realises that the rising cost of operating the fleet has made it impossible to continue to provide the cars without incurring losses. He approaches Visit Victoria and informs them that he will be unable to deliver all the cars required starting from the following day. On the following and subsequent dates, Visit Victoria are expecting an influx of visitors and it would be impossible for them to make alternative arrangements to pick up visitors from the airport and take them on tour. Given this, Visit Victoria agrees to make $50 additional payment per car per day if Gareth agrees to continue to provide the cars. Gareth agrees but Visit Victoria refuses to pay when invoice is sent after the service was rendered. Is Visit Victoria under obligation to make the extra payment? What if the expected travellers are unable to come to Melbourne due to an eruption of a volcano which made air travel impossible? Discuss.
2. The following happened in regards to the contract with Peninsula Tours. The agreement stipulated the provision of five cars with drivers every day. Due to resignation of drivers and breakdown of some of the cars, Gareth informed Peninsula Tours that he can only provide three cars per day while he recruits additional drivers. Gareth goes ahead and gets the cars fixed and hires additional drivers. He spent nearly $7000. However, after two months Peninsula Tours demanded payment of compensation for the two cars not provided totalling $1200. Is Gareth under legal obligation to pay the compensation? What if Peninsula Tours changes its mind and decides to take the three cars only after Gareth had spent considerable amount of money for fixing the two cars and hiring drivers? Discuss.
3. In addition to his tour operation business, Gareth also owns an event organisation business. One summer he organised a music concert at a winery in Yarra Valley. For this purpose he hired a Melbourne based Event Rental Pty Ltd to provide large tents, portable stage, electrical sound systems and marquees. Two days before the event, a car delivering the equipment was involved in a serious accident and the delivery items were destroyed. The singer refused to sing given the substandard sound system that Gareth brought at the last minute from a neighbouring wine estate. Julie who travelled from inter-state for this occasion to celebrate her birthday is seeking a compensation for the disappointment she suffered in addition to refund. She is seeking $1000 for the disappointment and a refund of $800. Discuss the rights and obligations of the parties in light of the law.

Select the right answers in the following questions

Bonds wrote McGuire, "I will sell you my house and lot at 419 West Lombard Street, San

Francisco, California for $950,000 payable upon merchantable deed, deal to be completed within

60 days of the date of your acceptance." Assuming that Bonds' letter contains terms which are

deemed sufficiently certain and definite, which of the following statements is correct?

a. Bonds' letter is not an offer unless Bonds intended it to be an offer.

b. Bonds' letter is not an offer unless McGuire thought Bonds intended to make an offer.

c. Bonds' letter is an offer if a reasonable person with full knowledge of the circumstances

would be justified in thinking it was intended as an offer..

d. Bonds' letter is not a offer unless both Bonds and McGuire considered it as an offer.

3. Iverson Jewelers wrote a letter to Miller, "We have received an exceptionally fine self winding

Rolox watch which we will sell to you at a very favorable price."

a. The letter is an offer to sell.

b. A valid offer cannot be made by letter.

c. The letter contains a valid offer which will terminate within a reasonable time.

d. The letter lacks one of the essential elements of an offer.

4. Don was negligently driving south on Merdock Avenue when his car rear-ended a car driven by

Patty. The force of the impact forced Patty to rear-end Terry's car. In turn, the force of the

second impact caused Terry's car to hit a lamppost, which then fell on a house owned by Paul.

The force of the impact scared Paul, causing him to immediately have a heart attack. Paul sues

Don for negligence. If Paul recovers, the most likely reason is:

a. Paul was able to prove that Don proximately caused Paul's injuries.

b. Paul was able to prove that the damages he suffered were actually caused by Don.

c. Paul was able to prove that Don breached a duty of due care owed by Don to Paul.

d. Paul was able to prove all of the above (a, b & c).

5. Sammy agreed to sell and Larry agreed to buy Sammy's car for $400, payable upon delivery.

Sammy delivered and left the car with Larry. However, Larry failed to pay Sammy the $400.

After eight years had passed following the delivery and acceptance of the car by Larry, Sammy

sued Larry in state court for failure to pay him the $400. Based only on the above stated facts,

which of the following statement is most accurate? Assume the UCC applies and the statute of

limitations for oral contracts is two years and for written contracts is four years.

a. No contract was ever created between Sammy and Larry.

b. A contract was created but likely not enforceable because the statute of limitations has

expired.

c. A contract was created, but it is only enforceable if it is in writing.

d. A contract was created and is enforceable.

6. Bill purchased a can of Sipep from the Ajax Minimart. After he finished drinking the Sipep, Bill

noticed that the can contained dead insects stuck on the inside bottom of the can. In a strict

product liability tort action against Ajax, Bill must prove, among other things, that:

a. Ajax is a merchant selling Sipep.

b. Ajax knew or should have known of the defective condition.

c. Ajax had prior notice of other similar problems with Sipep products.

d. Ajax actually placed the dead insects into the can.

7. Under which of the following situations does strict product liability apply?

a. Sale of a defective and unreasonably dangerous product.

b. Manufacture of a defective and unreasonably dangerous product.

c. Both (a) and (b) are correct.

d. Neither (a) nor (b) are correct.

8. On May 1, Back-Talk Computer Store offerd to sell five (5) computer servers to Gatekeeper

Company for $5,000.00 each, delivery to be on May 30. Later that day (May 1), Gatekeeper

responded that it would buy the computers only if they were delivered within three business days.

Back-Talk notified Gatekeeper the next day, May 2, that it would not be able to deliver the goods

within the time requested by Gatekeeper. Which of the following is true regarding Back-Talk's

offer?

a. There is no contract between Back-Talk and Gatekeeper.

b. Gatekeeper's additional term became part of the contract, so Back-Talk is obligated to

deliver the goods within three business days.

c. Back-Talk's offer was accepted by Gatekeeper

d. Gatekeeper may later accept Back-Talk's May 1 offer if it is then willing to accept

delivery in four weeks.

9. The body of law which establishes rights between persons and provides for redress for violation of

those rights is known as:

a. Criminal Law.

b. Civil Law.

c. The Uniform Commercial Code.

d. Stare decisis.

10. Donny threw a knife at Sally, intending to injure her severely. However, Donny missed Sally.

Sally saw the knife just as it whizzed by her head, missing it by about one inch. As a result, Sally

was very scared. Sally sued Donny for assault and battery. Which of the following is most

correct?

a. Donny will be liable for battery, but not assault.

b. Donny will be liable for assault, but not battery.

c. Donny will be liable for assault and for battery.

d. Donny will not be liable for either assault or battery because this is only a criminal

matter.