Sarah is an Australian supermodel who began an intensive fitness program to prepare for her appearance in a TV Commercial for gym equipment. She knew that she needed to be very fit. In addition to her fitness program, she decided to consult a dietician about what sort of food she should eat. The dietician suggested that she have at least one protein smoothie every day. Sarah researched a range of blenders that might suit her needs. At her local electrical store, she found that the only blenders for sale there did not meet her needs as they were not powerful enough to produce smoothies.

Sarah kept looking. She had heard good things about the Homeware Store so she decided to go there to purchase a blender that met her needs. She was very happy to find that a blender was on sale at the Homeware Store. A sign advertising the blender stated:

It is high quality, superb, safe and durable. You won't regret it.

She purchased the blender and kept her receipt. Once home, she unpackaged the blender and as soon as she plugged it in, the upper lid came off and the sharp blades flew out, badly injuring her right hand.

At the hospital, a doctor explained to Sarah that she would need stitches in her hand, and she would be unable to use her hand for four weeks unless the cut had healed, so the stitches could be removed. Sarah was very upset when she realised that she would not be able to participate in the planned TV Commercial and that another supermodel would have to take her place. This also meant she would lose the $12,000 fee that she would have received for the commercial.

QUESTION 3 (10 Marks)

Use the IRAC method to advise Sarah about the remedies she may seek under Contract Law in Australia.

use this material to answer

Remedies for Breach of Contract

Rescission Rescission entitles the injured party to set the contract aside and is only available for breach of a condition The right to rescission is lost if the injured party: - continues with the transaction; - fails to act or act within a reasonable time; or - if an innocent third party acquires an interest in the subject matter

Restitution Restitution is based on the concept of unjust enrichment. The plaintiff must establish: The defendant must obtain a benefit or enrichment; The benefit was at the plaintiff's expense; It would be unjust to allow the defendant to keep that benefit or enrichment; and The defendant has no defences to rely upon

Restitution Restitution can be used if: The defendant has received a sum of money from the plaintiff and there has been a total failure of consideration or a mistake of fact. Under a mistake of law Under duress or compulsion Restitution makes use of the doctrine of quantum meruit (for as much as he has earned)

specific performance and injuction