Use IRAC model to answer question

LAW2442 Commercial Law

QUESTION ONE

Lauren owns a vintage handbag store in Brunswick East, Melbourne. The area is home to local designers, great vintage shops and spots to refuel along the way. Laurens store imports vintage handbags from various European countries.

Lauren has just conducted a large spring sale in her business and is hoping to replace old stock with new stock from overseas. She has already placed an order for the stock some months ago and she needs the new season vintage handbags urgently. The sale has gone very well and 60% of her stock has been sold. She knows that if she does not get the stock in on time from overseas, she is going to lose a great deal of money in sales. That means that her cash flow will be very low and she will not be able to pay her bills for rent, telephone, electricity, employee salaries nor to meet substantial payments on her overdraft with her bank. In fact, if her order from overseas is not delivered on time to her business, Lauren is likely to face bankruptcy.

She contacts the delivery company, Overseas Deliveries Pty Ltd, with which she has been dealing for a number of years. The director and owner of this company, Dave, has heard of Laurens financial problems and instead of charging his companys normal delivery fee of $5,000 per delivery, which the parties have already agreed upon, Dave now advises Lauren that his company cannot deliver the goods for the agreed price and that if she wants them and she is going to have to pay $10,000 per delivery. Lauren is very unhappy with this news but reluctantly agrees because of her financial position.

It takes three delivery trips for the goods to be received at Laurens business and she pays the higher price for each delivery. The total payment is $30,000.

Lauren is distressed and seeks your advice.

REQUIRED:

Advise Lauren as to her rights against Overseas Deliveries Pty Ltd and/or Dave under common law and the Australian Consumer Law.