James is about to open a new sports club called James Keep Fit. James enters into a contract to lease a range of gym equipment from Steve, the salesman for Gym Specialists Pty Ltd. James says to Steve: "I need 10 treadmills, 2 cross trainers, 2 lifecycle bikes, 1 rower, 1 life fitness strength machine and a set of free weights and accessories. I like them to be of good quality that meets the industry standards." Steve replies: "All our equipment is certified as pre- owned and meets with our sophisticated quality standards."

Steve (on behalf of Gym Specialists Pty Ltd) and James sign a written contract. The contract states that:

"For a price of $10,000 per annum payable in advance, Gym Specialists Pty Ltd agrees to lease James the specified standard equipment suitable for use in the gym. The equipment will be delivered to James Keep Fit 7 days before the club opening"

The equipment arrives 7 days before the opening, but James is very disappointed as most of the equipment looks old and does not perform to normal gym standards. The gym equipment appears to be more suitable for home use.

James wants to return all the gym equipment back to Gym Specialists Pty Ltd and get his money back. James is worried that he will not be able to open the new sports club as planned and until he receives the $10,000 refund from Gym Specialists Ltd, he cannot afford to enter a new contract to lease the equipment from another supplier. This means that he will have to delay the opening of James Keep Fit for one week. He estimates that this will result in a loss of $20,000 in lost revenue and other expenses he will now incur (such as corrections to the advertising campaign).

With reference to law and precedent cases, ONLY discuss Damages and whether James will be able to terminate the lease agreement and what damages, if any, he may be able to claim from Gym Specialists Pty Ltd.