Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please use the IRAC method to solve all the questions and explain in detail. Thank you in advance! Question 1: Rory is a professional martial

Please use the IRAC method to solve all the questions and explain in detail. Thank you in advance!

Question 1:

Rory is a professional martial artist who until last year owned and operated a martial arts centre in Marion called "Extreme Self-Defence". Rory operated Extreme Self-Defence as a sole trader. Early last year Rory, who is in his early 60s, decided his body needed a break from martial arts and decided to sell "Extreme Self-Defence" to one of his long-time instructors, Dave Edwards. The sale of the business contract contained a restraint of trade clause which said: "The vendor must not carry on a business of the same nature anywhere in the Adelaide metropolitan area for a period of three years." Last month Dave became aware that a new martial arts centre, operated by a company called Extreme Martial Arts Pty Ltd, had opened in Marion. Dave also discovered that Rory is the director of Extreme Martial Arts Pty Ltd and that Rory's wife is the sole shareholder. Can Dave enforce the restraint of trade clause against Extreme Martial Arts Pty Ltd?

Please note: for the purpose of this question, you can assume that the restraint is reasonable and enforceable against Rory in his personal capacity.

Question 2:

Tony owns a business that makes and sells apple cider ("the Business"). Tony decides to sell the Business and is introduced to Julie who is interested in buying the Business. Tony and Julie enter into negotiations and agree on a deal. Both Tony and Julie sign the following document which Tony prepared. Heads of Agreement

1. Tony agrees to sell, and Julie agrees to buy, Tony's apple cider business

2. Purchase Price: $3.5 million.

3. All supplier agreements are to be transferred to Julie.

4. All fixtures and fittings, as inspected, are included in the sale.

5. All employees are to be transferred as per the solicitor agreement.

6. This agreement is subject to the preparation of a formal contract of sale based on these terms.

Tony arranges for his solicitor to prepare the formal contract for sale and then sends that contract to Julie. When Julie receives the contract, she calls Tony to tell him that she is no longer interested in buying the business. Tony is furious and says: "But it is too late to change your mind, you have already signed the Heads of Agreement. You are legally bound."

Is Tony correct, is Julie legally bound to buy the Business as a result of signing the Heads of Agreement?

Question 3: Ethan owns and operates a health food store in Glenelg called NutriTucker. All of the food sold by NutriTucker is organic, gluten-free and vegan. NutriTucker's speciality item is the "organic vanilla quinoa smoothie." Recently, Ethan opened the second store in Unley. Ethan hired Marcia as a full-time store manager of the Glenelg store so that Ethan could manage the new Unley store. As part of Marcia's terms of employment, she had day-to-day responsibility for running the store, including supervising casual staff and managing customer service and food preparation. Marcia also had the authority to check and accept deliveries. However, Ethan told her not to place orders with suppliers, or otherwise make any purchases on behalf of NutriTucker. One day, while working in the store, Marcia was approached by Randy who offered to supply NutriTucker with quinoa. The price Randy offered was much lower than the price NutriTucker was paying. Marcia, who was keen to impress Ethan, signed a 6-month supply agreement with Randy. Unfortunately, Ethan was not impressed at all. Randy's quinoa was not organic. Marcia had forgotten to request organic quinoa, which is why Randy's price was low.

Is Ethan liable to pay Randy for the quinoa (as per the supply agreement signed by Marcia)?

Please note: for the purpose of this question, you do not need to consider any remedies that Ethan may have against Marcia. You are to consider Ethan's position with Randy only.

Please use the IRAC method to solve all the questions and explain in detail. Thank you in advance!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contract Law

Authors: Ewan McKendrick

13th Edition

1352005255, 978-1352005257

More Books

Students also viewed these Law questions

Question

Am I just skimming over the problem?

Answered: 1 week ago

Question

1. Avoid conflicts in the relationship

Answered: 1 week ago

Question

1. What will happen in the future

Answered: 1 week ago