Question One

Michelle is at University, studying to be a veterinary surgeon. David, a close family friend is also a veterinary surgeon. Whilst away at University, Michelle received a letter from David on 1^st April, saying that he was due to retire in a few weeks' time and that he wondered whether she would be interested in buying his veterinary equipment for the bargain price of $5000. His letter asked for a reply by 15^th April as a junior partner, Peter, in his veterinary practice was also interested in buying the equipment, albeit at a higher price.

Upon receipt of David's letter, Michelle decided that she would like to buy, but would need to borrow the money. In order to speed matters up, she then wrote to David on 2^nd April expressing a firm interest, but asking if he would be prepared to accept payment by instalments. Her letter got lost in the post and was never received by David.

Not having heard from David, Michelle arranged a bank loan and then posted a second letter on 9^th April, enclosing a cheque for $5000. This letter only reached David on 17^th April.

In the meantime, David had changed his mind about selling her the equipment and sent her an email on 10^th April retracting his offer to her. He sold the equipment to Peter on 16^th April.

With reference to the case situation above, discuss, using decided cases to support your arguments, the contractual implications and the remedies, if any, that Michelle might be able to pursue against David if she so wished.

(25 marks)

Question 2

Jeremy wanted to make some changes to his home. He visited One Stop Shop and ordered the following items:

a)An air-conditioner unit for $2000. He pays another $500 for the installation.

b)A Smart TV worth $3000. The salesman told him that Samsunk was the best Australian brand to buy and had great reviews.

c)A microwave oven for $400.

When the items were delivered to his home, he was given a document. The document had the following clause:

"No warranties or guarantees are made in relation to the efficiency of the operation and suitability for purpose of the items sold."

The air-conditioner was installed badly and there was a lot of water leakage when it was in operation. The Smart TV had very basic features and did not function like a Smart TV. It was later found that the TV set was not even an Australian brand and had very bad reviews. The microwave oven blew up after being used 5 times and it caused a small fire in Jeremy's kitchen. This resulted in $3500 worth of damage. Boom Co manufactured the microwave oven.

Jeremy calls One Stop Shop to complain but is told that no action can be taken against them because of the clause. Advise Jeremy if he can pursue remedies against One Stop Shop and Boom Co.

(15 marks)