Milaand her best friendLeon, both aged 35, are always on the lookout for a good business opportunity. Their first joint venture, called New Work('NW'), involves leasing commercial property in regional towns for use as'cutting-edge'co-working spaces. Their vision for NW is ambitious: to enhance remote working conditions across all major regions of Australia by establishing vibrant multi-function co-working facilities, where people can share office space on demand. Although NW would be one of many co-working businesses within the Australian market, it aimed to stand out from the crowd by providing members with access to a comprehensive range of technological devices, reliable high-speed internet, and ergonomically designed workstations. All members would have to do is show up and work!

Having secured their first commercial lease in the coastal village of Kyama, Mila and Leon set out to acquire the technology needed to bring their vision to life. After performing some preliminary research, they visit a highly rated electronics store calledTechsRUs('TRU').As they step into the entrance of TRU, Mila and Leon freeze in their tracks. They are overwhelmed by the mixture of loud music, large screens and bright lights emanating from each direction of the gigantic store. They didn't know where to begin!Fortunately, within moments of their arrival, Mila and Leon are joined by a friendly TRU manager who demonstrates great enthusiasm for their business plan as well as extensive knowledge of all things tech. In fact, without Mila and Leon even needing to browse the aisles of the store, the TRU manager compiles a list of items that he believes Mila and Leon'must purchase as the bare necessities for the NW vision'.

Impressed by the TRU manager's expertise and efficiency,Mila and Leon decide to order all the items on the list, including computers, hard drives, monitors, projectors, webcams, headsets, microphones and virtual reality goggles. To proceed with the sale, the TRU manager produces a written'Sales Agreement' andinstructs Mila and Leon to place each of their signatures on the final page. Mila, suddenly concerned by the amount of money they were about to spend,leans over to Leon and suggests that they 'think on it for a few more days'.Agitated,the TRU manager assures the pair that they are 'getting a great deal'.Themanager then adds 'I'mcertain that your NW members will love the range of devices you'reintegrating in your design. Also, if you find that you ordered too much stock, or that certain products aren'tbeing used enough, justbring them back and I'll arrangea refund or store credit'.Satisfied by this reassurance, Mila and Leon flick through the five (5) pageSales Agreement, skim reading its contents, and scribble their respective signatures on the dotted line.

Two months, and many sleepless nights later, the NW Kyama office is up and running. The space is vibrant and contemporary, complete with neon signs in each boardroom spelling out unique inspirational quotes. The design and technology in each workspace are impressive and membership rates are steadily increasing following the success ofNW'sadvertising campaigns. One such campaign centred on a postplaced on NW'sFacebook and Instagram pages on 31 October 2021, stating:

"Want to get away from the hustle and bustle of city life, but enjoy working in a vibrant, motivating environment with like-minded people? Join the New Work community today and start the revolution! Like and share this post, follow us on Facebook and Instagram, and visit our Kyama office to receive a FREE nine (9) month membership valued at $3500.* Don't miss out on this unbelievableopportunity!** *Offer is only available for up to 10 people. **Offer ends 31 November 2021."

Within a week of posting the advertisement, 10 Kyama residents had followed the instructions and visited NW to claim their free nine-month membership. Through positive word of mouth, NW then acquired an additional 60 members within the first two months of operation. Mila and Leon were so pleased with this growth that they were already planning to launch more offices along the South Coast.

Over the next four months, however, Mila and Leon's optimism began to fade. The NSW Premier, during several press releases, encouraged companies and other employers that they '...need to conduct business as usual. This includes incentivising employees to work from the office'. According to the Premier, this would counteract the steep rise in rent and property prices across regional and coastal areas. As a result, a growing number of employees returned to their inner-city offices, leaving behind their flexible work-from-home arrangements. Unfortunately, this meant that NW was losing members fast. So, Mila and Leon needed to slow down their expenditure urgently!

As a first step in cutting costs, they decide to bundle together all the microphones, headsets and virtual reality goggles that they purchased from TRU and return them to the store. Once they locate the TRU manager, Mila and Leon explain that they wish to obtain a refund for these products as their members are not making sufficient use of them. In response, the TRU manager states 'I'm sorry Mila and Leon, but if you read our Sales Agreement a little more carefully you would see that it doesn't make any provision for the return of used products. Plus, these particular items can't be returned or refunded for hygiene reasons'. When Mila and Leon remind the manager of his original promise to provide a refund, he leads them to the back of the store and points to a red sign positioned above the wall where the accessories (including headsets, microphones and virtual reality goggles) are on display. In large white text the sign reads:

'Please choose carefully! In the interests of public health, we do not accept the return of any of these items.'

Mila and Leon are outraged by the TRU manager's reaction. As they drive back to NW, they devise a second plan to cut costs. They decide that they will send an email to the 10 members who 'won' free membership and notify them that, due to changed circumstances following the state Premier's announcement, they must pay the remainder of the membership in full. This is despite the fact that these members had only received six months of free membership, as opposed to nine.

When Mila and Leon arrive at NW, however, they are shocked to find an ambulance positioned across the front entrance. Being placed inside the ambulance, on a stretcher, was a NW member named Sita. A paramedic informs Mila and Leon that Sita had been badly injured while practising yoga during her lunch break. To ensure she had sufficient room for her yoga poses, Sita was using a vacant boardroom. However, when Sita raised her leg up to the sky for a 'three-legged dog' pose she accidentally brushed her foot against the wall behind her. Unfortunately, this was enough to cause one of the large neon signs that Mila and Leon had affixed to the wall to fall on top of Sita. Due to the downward-facing position Sita was in at the time, the sign landed directly on her lumbar spine causing her to experience immediate and severe pain.

Mila and Leon are very worried. X-rays reveal that Sita has fractured two lumbar vertebrae (in the spinal cord), which has impacted her ability to walk and work. She requires intensive medical attention to treat the injury and improve her mobility. In addition to being concerned about Sita's well-being, Mila and Leon are worried about the viability of NW due to the recent decline in membership rates.

Mila and Leon need some assistance.

THE QUESTION:

Advise Mila and Leon:

a) Whether they are in a binding and enforceable contract with the 10 members receiving free membership or whether they are entitled to ask those members to pay from the remaining three months' membership.

Please use these points

i) Apply all the essential elements of a binding contract; and

ii) If applicable, consider any other contract law principles or remedies relevant to the question.

(8 Marks)