Snazzy Prints Pty Ltd (hereafter 'Snazzy Prints') is a factory producing jeans with snazzy prints. Its jeans are primarily sold to novelty clothes shops. It has recently engaged the services of Repair Expertz Pty Ltd (hereafter 'Repair Expertz'), due to one of its machines (which had high production capabilities) having broken down.

Snazzy Prints Pty informed the engineers at Repair Expertz that the machine had to be repaired and returned in a week's time. Snazzy Prints did not inform the engineers that this was the only machine it had which could do special designs for the jeans.

The specialist engineers at Repair Expertz were not available to repair the machine until four weeks later due to a breakdown of its key repair tool and informed Snazzy Prints of this three days before the expected delivery date of the machine. Snazzy Prints decided to terminate the contract at this stage.

After a week of desperately looking around, Snazzy Prints discovered Vincenzo Machinz, a manufacturer of this machine and managed to hire the machine at a cost of $600 a day.

Snazzy Prints was however, unable to source the newer version of the machine due to stock shortages of that machine.The machine was not as efficient as the one that Snazzy Prints normally used as it was an older version and consequently, Snazzy Prints was only able to manufacture (and therefore sell) half the quantity of jeans it was accustomed to selling.

In the meantime, Snazzy Prints suffered $100,000 in lost revenue due to the reduced production capabilities of the new machine.

Unknown to Repair Expertz, Snazzy Prints was further meant to sell its unique jeans to a television show called 'Guess the Price'. Due to the slower production capabilities of this machine, Snazzy Prints has suffered a loss of $400,000 relating to the loss of the lucrative contract with this show. The jeans were meant to be delivered to the organisers of the television show during the period when Snazzy Prints was desperately searching for machines to hire but could not find one quickly.

Please answer the following questions:

a) Are the losses of $100,000 and $400,000 fully claimable in damages by Snazzy Prints as against Repair Expertz under contract law? Explain why.

(10 marks)

b) Assume further for purposes of this part, that there were certain statements made about the efficiencies of the hired machine by Vincenzo Machinz before entry into the contract which turned out to be untrue, hence resulting in lower production. Advise Snazzy Prints whether they have any rights as against Vincenzo Machinz if these statements were not in the written hire contract that they signed. Advise on all possible arguments that could be raised.

(5 marks)