Luke runs a fish supply company. He speaks to Jackie, a supplier of commercial refrigerators, and tells her that he needs to replace the refrigerator where he stores his fish supplies: I want a new one that will run without any problems. Jackie recommends a Samsung model. She tells Luke that she has personally tested all the fridges she sells and can guarantee that they are perfect.

Luke says: The changeover must go smoothly. I will need to arrange an electrician and plumber to install the new fridge, so I need a firm date for delivery. And I have restaurants and hotels that I supply each day with fish if there is any disruption theyll go elsewhere.

They then agree that Jackie will sell a 2,000 litre Samsung refrigerator to Luke and deliver it to his shop on the first day of the next month. An electrician and plumber agree to install the new fridge for $1,250.

When the fridge is delivered and installed, Luke moves all his fish supplies into it, and disposes of his old fridge. Three days later, the new fridge stops working. Luke calls the electrician and plumber back to check what is wrong and they find that the electronic components of the fridge are faulty. The fridge cannot be repaired. Luke immediately telephones Jackie, who says that she will send a replacement fridge the next day.

Luke is worried that his fish supplies will go bad. He orders in $200 worth of ice in an effort to keep the fish cold, but by the next morning some of the fish have obviously gone bad. Luke has to throw out the whole lot. As a result, he cannot send the required fish to a restaurant with whom he has an ongoing supply contract for a year. The restaurant owner, furious at being let down, says she will not accept any more fish supplies from Luke. Such contracts are very hard to get.

Jackie delivers a replacement fridge as promised, and Luke has to get the plumber and electrician in again to install it at a cost of a further $1,250. It costs him $5,000 to replace his fish supplies. Luke now wants to bring an action for breach of contract against Jackie to recover: $2,500 for the payments to the electrician and plumber; $5,000 for replacing the fish that went bad; $20,000 for the profit he would have made over the rest of the year on the contract which the restaurant has now terminated; and $2,000 for the anxiety he suffered during the ordeal.

Advise Luke on whether he can bring a claim against Jackie for breach of contract. (3 marks)

If Luke brings an action for breach of contract, to what extent is he entitled to claim damages for the various losses he has suffered? (Refer to at least one Court case and justify your answer) (7 marks)

The expense of having the plumber and electrician come twice to install a fridge ($2,500)

The fish that spoiled had to be replaced (cost of $5,000)

The cancellation of the contract with the hotel ($20,000 lost profits)

Luke has suffered anxiety as a result of the breach ($2000)

Luke also purchased ice in an effort to keep his fish supplies fresh ($200)

What sum can Luke claim in damages?