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BSLW 201 – Business Law
Assignment # 3 – Contracts
The following are case studies of Contract Law. Answer all four questions.
Due date: Wednesday November 15, 2017
1. Letecia owned an antique store that specialized in rare porcelain dolls. When sheopened the business in 1989, it was at a shop in an eastern suburb of Melbourne. In 1999she started to advertise on the Internet and by 2006 the business had grown to the pointwhere she needed help to keep the business going. After a family discussion one night atthe kitchen table in July 2006, it was agreed that Letecia would probably keep thebusiness going for another couple of years and then retire. Ruth, her youngest daughterand aged 16, would work in the shop as long as was needed and in return, she wouldreceive any unsold dolls. When Letecia retired at the end of 2009, she decided that shewould give the unsold stock to charity and they could auction it and keep the proceeds.Advise Ruth.
2. Keon, an impoverished university student, and his millionaire father enter into anarrangement where Keon agrees that he will keep the front- and backyards of thefamily property mowed, and he will ‘do a bit’ to keep the gardens looking tidy. In return,his father agrees to pay him a weekly allowance of $200. His father had previously used agarden contractor to do the job and paid him $350. They live on a one-hectare property,and the mowing alone takes half a day a week. After four weeks, Keon’s father tells himthat he can’t afford to pay $200 a week. He says that Keon should be doing the workfor nothing, as it is the responsibility of the whole family to look after the property;besides, he says, Keon is getting free board and lodging. Advise Keon.
3. Tatyana received a circular from Beauty and the Beast Hair Salon advertising massages andmanicures for $10. Realizing that this was an exceptionally good deal, but not surprisedbecause she knew that they had only just opened and were running a number of goodopening specials, she rang and made a booking. When Tatyana arrived at the salon she wastold that there had been a mistake on the circular and it should have said $100. Themanager of the salon explained that this was still a good price because normally amassage and manicure would have cost $150. Tatyana was furious, as it had taken her 30minutes to get to the shop by car and if she had known it would cost $100, she wouldnever have made the booking. Advise Tatyana. Would your advice have been any different ifTatyana had the massage and manicure before being told that the cost was $100? Wouldshe have to pay the full price?
4. Allen, while he was so drunk that he didn’t know what he was doing, bid successfully atan auction for the purchase of a house. It was clear to the auctioneer that Allen didn’tknow what he was doing. However, after Allen sobered up he confirmed the contractwith the auctioneer. He then subsequently refused to complete the contract. Is Allenbound?
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