Question 1 - Contract Law (20 marks)

Eduardo Erica, partners of Eduardo's Coffee, approached the large and popular Italian caf chain, Bacio. Erica sent a sample of Eduardo's Coffee beans to Bacio. She tells them the price is $1,300 per 60-kilogram sack.

Maria, Bacio's director, emails Erica to say the head baristas are very impressed with the sample beans, but Bacio needs a large quantity of coffee every week, because there are more than 50 cafs in the business.

Erica and Eduardo excited to hear this, but to supply beans to Bacio they must increase production. They must increase their order of green beans from Brazil and must get another roasting machine and another assistant to help roast it.

Erica sets up a meeting with Maria. Maria explains it is important Bacio receives enough beans of the same type to ensure all coffee served across the cafs is consistent. Erica tells Maria that Eduardo's Coffee will have to increase production, but she is confident it can be done. Based on Erica's assurance, Maria signs Eduardo's Coffee's contract to be the exclusive supplier of roasted coffee beans to Bacio at a price of $1,300 per 60-kilogram sack.

Erica and Eduardo get a loan for another roasting machine, increase their order for beans from Brazil and hire another person to help with the roasting. In the first week Bacio orders 6 sacks of roasted beans, and Eduardo's Coffee supplies all 6 sacks of coffee beans and invoices Bacio for payment.

For a few weeks all is going well. Erica and Eduardo have increased production and can supply Bacio's order each time. Then suddenly the new roasting machine at Eduardo's Coffee breaks down. The spare parts production in Italy is slow now due to COVID 19 and the parts will take months to arrive. Eduardo with his assistants cannot roast enough coffee for Maria's next order for 7 sacks of coffee beans. All they can send are 4 sacks. This is not enough for Bacio's operations.

Maria telephones Erica. She says if Eduardo's Coffee cannot provide enough coffee beans for Bacio's operations, Bacio will cancel the contract with Eduardo's Coffee and go back to their previous coffee bean supplier. Erica says there is nothing in the contract that requires her to supply all the beans ordered every time.

Using the relevant principles of contract law, including cases, discuss:

(a) Whether Maria is correct that the contract includes a clause that Eduardo's Coffee must supply all the beans that Bacio requires, and

(b) Assuming that the contract does include a clause that Eduardo's Coffee must supply all the beans that Bacio requires, is Maria entitled to terminate the contract with Eduardo's Coffee?

Question 2 - Employment Law (10 Marks)

Eduardo of Eduardo's Coffee bean roasting partnership arranges for Geoff to assist him with coffee roasting when he has very big orders to fill. Eduard agrees to pay Geoff $10.00 for every 5 kilos of coffee Geoff roasts and packs. Eduardo tells Geoff to arrive at 6:00am and at 3:00pm and Geoff is allowed to have a 30-minute break for lunch. Geoff decides which days he works but he must work a minimum of 3 days per week. Geoff is given special gloves and protective glasses by Eduardo, but the required steel-capped work boots are something Geoff must get himself. At the end of each day that he works, Geoff must fill in a timesheet for the amount of coffee he has roasted and packed.

Using relevant legal principles of employment law, including cases, discuss whether Geoff is an employee or an independent contractor?