BLB1102 Contracts 1
Problem-based questions/case-based/hypothetical scenario
The aim of a question which poses a hypothetical fact problem is to test your ability to apply the relevant legal principles and rules to the legal problem arising on the facts
• Therefore, you need to demonstrate your knowledge of the law, as well as your ability to apply the law to the facts
• Your knowledge of law is gained from reading and understanding case law as Contracts 1 is mostly about legal principles grounded in the common law (case law)
Keep in mind:
• It is inadequate to simply refer to the correct legal principles without referring to the relevant cases and/or statutes which illustrate the application of these principles
• Further, where the precedent value of a case is in issue, you need to critique that aspect of the case (e.g. a precedent value of a case with distinguishable facts from the case at hand is slightly less as compared to another which might possesses similar facts to the case at hand)
• The IAA(C) methodology is commonly used as it is simple and straightforward and is analogous to the proof-making model used by lawyers to solving legal problems (variations of this method includes, IRAC and ILAC)
? Identify the legal Issue(s) (Contractual)
? What is the gist of the dispute from the perspective of each party, and in particular, from the perspective of your client?
? What is the reason behind the client’s needs to obtain legal advice?
? Articulate the most contentious issues that require analysis
? Think about what your client wishes to be advised on
? Research and Apply relevant principles of law and authority (from case law or legislation) to resolve the legal issues and to ultimately advise your client (think and communicate like a lawyer)
?What are the relevant principles/rules/exceptions/tests that could and should be applied the factual scenario?
? Apply those principles to the facts
? Advise /Conclusion
? Which arguments/ principles of law are the most arguable and persuasive?
? Are there alternative responses to the issues?
? What would be the most likely outcome of the dispute?
? What remedies are available for the parties, and in particular, for your client?
TO-DO list for your assignment
Week 2: Carefully read the problem questions and attempt to identify the relevant legal issues. You can discuss these issues with your study groups or friends but avoid sharing written notes.
Week 3: Start researching the relevant law which could be applied to resolve the legal issues identified.
Week 4: Draft a plan of your answer by clearly separating the legal issues. You should closely consider all the assessment criteria.
Week 5: Do further research on all the relevant law, including all the relevant case law. You should also consolidate the materials studied to date.
Week 6: Start writing your answer by applying the relevant case law to every legal issue. Remember to write questions you may have in relation to the questions and or the assessment criteria.
Week 7: Attend the Lecture: Discussion of Assignment Questions.
Week 8: Continue to analyse all the relevant legal issues and the strengths and weaknesses of each party’s arguments.
Week 9: Polish your answer, re-check all the references, ensure compliance with AGLC and all other assignment requirements found in the Assignment Booklet & proof-read your answer.
Week 10: Submit your assignment in accordance with the procedures set out in the Assignment Booklet and pay attention to all the relevant information in this Guide.
4 Core qualities (4 CQs)
These would be the criteria within which your assignment will be assessed
Quality of Content
Has the student identified and articulated the relevant and the most contentious legal issues in the scenario?
• What is the gist of the dispute from the perspective of each party, and in particular, from the perspective of your client?
Has the student applied legal reasoning and research to generate appropriate responses to legal issues?
• Has the student applied the relevant principles/rules/exceptions/tests that should be applied the factual scenario?
• Has the student utilised the facts to demonstrate understanding of key issues?
Has the student engaged in critical analysis and made a reasoned choice amongst alternatives (fully synthesising his/her responses)?
• Has the student addressed opposing arguments and weakness of his or her own arguments?
Has the student demonstrated accurate legal knowledge and the broader contexts within which the legal issues arise?
Has the student dealt with each issue separately and clearly and adopted a clear and logical order for his or her arguments?
Quality of Research
Level of originality and demonstration of research skills and capabilities
Have proper resources being used? Primary and secondary resources? (In particular, primary sources)
Are there additional/interesting/recent/relevant materials being used?
Has the student demonstrated an integrated understanding of all sources?
Quality of Writing Skills
Is there an effective, appropriate and persuasive communication?
Is there a satisfactory/good/excellent command of written English?
Is there proper referencing and observance of scholarly standards as per the AGLC? Pin-pointing references?
Quality of Format
Is the format of the paper appropriate?
Have the format requirements being followed?
Has the student included the word-count?
Question 1 (20 marks)
On 23 September 2013, a Distribution Agreement” (“the Agreement”) was entered into between Workplace Safety Australia Pty Limited (“WSA”) and Simple OHS Solutions Pty Ltd (“Simple”). Both WSA and Simple are companies involved in occupational health and safety advice (“OHS”) and training. Under the Agreement, Simple was appointed distributor in Victoria and Tasmania of OHS compliance software license “packages” which included access to a website and could include call center assistance both of which were managed by WSA.
WSA sent a letter of termination of the Agreement on 26 March 2014 and Simple is now disputing the lawfulness of this termination.
WSA’s termination letter of 26 March 2014 alleged that Simple was:
In breach of a term of the Agreement (clause 5.4 and Schedule 1, Item 2) which required Simple to provide for a minimum of 15 new customers per month over a six month period (“the minimum new customer requirement”).
Clause 5.4 reads:
Minimum Customer Requirement
The Distributor must meet the Minimum Customer Requirement, as set out in Item 2 of Schedule 1. If the Distributor does not meet the Minimum Customer Requirement for each six (6) month period during the Term of this Agreement, the Supplier may elect, at its discretion, to immediately terminate this Agreement by notice in writing to the Distributor.
Item 2 of Schedule 1 reads:
Minimum Customer Requirement:
15 new Customers per month …
On 10 August 2013 and prior to execution of the Agreement, Ms Shelley, on behalf of WSA, made comments to Ms Marini (a representative of Simple) that WSA would not initially insist on the minimum 15 new customers a month. She said words to the following effect: “I don’t expect you to make your sales targets at first. It will take some time to come up to speed with all the processes so I don’t expect you to make your sales targets initially but you will do very well, I am sure, and once you get someone to do the administration it will be a lot easier.” No specific time period was mentioned.
Simple accepts that it had not, as at 23 March 2014, introduced 15 new customers per month or 90 new customers over the 6 months between 23 September 2013 to 23 March 2014.
Advise Simple as to whether it can rely on Ms Shelley’s statement on 10 August 2013 and ultimately whether the termination of the contract was unlawful. 7
Question 2 (20 marks)
In early 2014, Mr Roger saw substantial opportunities in the small goods/ appliances rental industry. He wanted to take advantage of what was referred to as “Centralpay”. This was a facility which was provided by the Government. Under such facility, the Government will make payments directly to suppliers (rental companies) that provide goods or services to persons who are entitled to receive benefits from the Government.
Mr Roger thought that he had the ideal business model for the rental industry and that all he needed was finance. He discussed the model with his good friend, Mr White. They had their first meeting on 1 July 2014 where Mr Roger told Mr White that the ideal business model was to have a head company with one or two shopfronts, utilizing the Centralpay facility; the rental business enters into contracts and can either finance the contracts itself or rely on a related finance company.
Mr Roger also told Mr White that Mr White would have to apply for the facility since Mr Roger has, in the past, tried but failed to obtain the facility due to some bad financial and credit history. Mr Roger also said that if Mr White was to be successful in obtaining the facility that Mr Roger would help inject some capital to the business to make it fair for both of them to start the venture together. Mr Roger said words to the following effect, “I think I will be able to supply at least 30% of what we’ll need and I can put in the hours at the shop as well”. Both of them did not discuss possible salary arrangements.
Mr White said that he would think about the idea. On 10 July 2014, they met again at their local pub and had a couple of beers and their dinner before discussing the business idea. Mr White wanted to talk to Mr Roger about the likely distribution of profits. Mr Roger said that he was happy with a 40% share of the profit. Mr White said that it seemed fair and that he will start the application for the Centralpay facility. Mr White asked Mr Roger whether they needed to enter into some sort of written agreement. Mr Roger said that it was unnecessary and that even if they had one he would not sign it as he rarely sign contracts. Mr White said words to the following effect: “what about losses mate? And who’s going to own what? Assets?” Mr Roger said words to the following effect: “I am sure we’ll be fine. I trust you, you trust me. We have been friends for a long time mate! Things will work themselves out.”
On 25 July 2014, Mr White sent the Centralpay application to the relevant authority and he paid for all the necessary fees. He had also rented a shop in one of his local shopping centers and had paid for the bond and the first month rent. It was a 24-month contract. Mr White rang Mr Roger and left a voicemail informing him of the application and the fact that he had found a shop to be used for the business. Mr Roger continued to be non-contactable for another two weeks.
On 20 August 2014, Mr White received news that his application was successful. He was over the moon and attempted to ring Mr Roger. Mr Roger answered the call and told Mr White that he was no longer interested in the rental business and that he was sorry about all the troubles. Mr Roger 8
assured Mr White that the business was going to be profitable even without Mr Roger’s contribution.
Mr White was outraged as he had already expended a lot of money for the venture. He has even entered into various contracts with suppliers of second-hand appliances. He said that he alone would not have the financial capacity to proceed with the venture and that he was afraid of being sued by those suppliers if he canceled the contracts.
Advise Mr White as to whether he can bring any action against Mr Roger. 9