The question is from The Application of Legal Principles in Business - Contract and Consumer Law" by Penelope McCann, 2nd Edition. 

Rebecca is a young entrepreneur who designs and sells jewellery under the name 'Snazzy Fox'.  Her business is growing very quickly and she has recently become a client of the firm seeking business advice. 

Please answer her questions below, explaining the law to her and giving reasons for your conclusions.

QUESTION 1

If a contract is expressed in writing can verbal terms also be enforced?

 

QUESTION 2

Are you bound to a contract if you sign it without understanding or even reading it?

 

QUESTION 3

Rebecca has entered into a contract to provide a retail shop with 200 pieces of jewellery by close of business on 15th October for $10 000. 

Unfortunately, the raw material she uses to manufacture the jewellery has increased in price by 45%, which means she will make no profit on the contract. 

Rebecca considers the contract is now void for frustration. Is she correct?

 

QUESTION 4

Rebecca has also entered into a contract with Trending Now Pty Ltd (Trending Now) a marketing company. The terms of the contract to which she agreed were that in return for the payment of $75,000:

1. her work would be showcased together with that of other designers in a travelling design and fashion expo, complete within 3 months
2. Trending Now would run the expo for a two week period in all capital cities, mount a multimedia and social media campaign and sell her jewellery on consignment and take orders on her behalf.

The firm had previously advised her that such exposure should conservatively attract approximately $200,000 in business and would increase her public profile.

Rebecca now reveals that after one successful show in Perth from which she received $20,000, Trending Now has stopped operating.  No more showcases have taken place and no advertising outside Perth. Rebecca thinks there has been a breach of contract and cannot afford to lose the $75,000 she has paid. 

She knows some of the other designers are talking of suing, but she wonders if it is a commercially sound idea.

 

a) Advise Rebecca of the matters to be considered in bringing a commercially successful breach of contract action. 

b)If the court decided to award Rebecca damages, what matters would the court take into consideration in assessing the amount she should be awarded?