Question 1 (25 marks)

Krish, a student from Western Sydney University, is looking forward to the summer vacation. He notices a promotion on Instagram by Holiday Travels Ltd, a hotel chain operating in Australia and having hotels in Australia and South Pacific. The promotion states that a two weeks stay at the Holiday Travels Hotel on one of the islands in Mivalu is offered for $15,000 for the first 10 callers. Krish calls Holiday Travels Ltd and is greeted by Jin, one of the sales agents. Krish tells Jin, 'I like to book a holiday to Mivalu, and can I please book the tour advertised for $15,000? Jin replies, 'We had so much interest in that promotion. Unfortunately, that package is not available. But we have another package for $20,000. It includes everything in the promotion as well as a two-day cruise.' To which Krish replies, 'Oh no ... it was such a good deal. Better be quick next time. Please book me for the $20,000 package.' Jin signs Krish up for the tour, and Krish pays $5000 as a deposit. The remainder is to be paid on the first day of the holiday.

Unfortunately, just a few days before Krish's holiday, a massive volcanic eruption covered the nation of Mivalu in ash, and 15-metre tsunami waves created by the eruption caused catastrophic damage and destruction. This particular volcano has been relatively inactive since 1985, even though the islands of Mivalu are situated in one of the most active volcanic zones in the South Pacific. Given the extensive damage to the Holiday Travels Hotel, all bookings were cancelled. The contract between Krish and Holiday Travels Ltd did not contain any terms to address a situation of this nature.

Answer all questions.

1. Identify the offer, counteroffer and acceptance (if any) in this scenario. Explain with reference to relevant case law. (6 marks)

1. Did parties intend to create legal relations in this scenario? (4 marks)

1. What is the 'supervening event' that has made the performance of the contract between Krish and Holiday Travels Ltd impossible? (2 marks)

1. Is it possible to claim that the contract between Krish and Holiday Travels Ltd has been frustrated? (8 marks)

1. If the answer is yes, can Krish recover his deposit? (5 marks)