Contracts - Hypothetical Assessment

5 Found helpful • 10 Pages • Essays / Projects • Year: Pre-2021 • Previously uploaded under: LAW204 - Contracts

the hypothetical assessment for contracts, received a high distinction and includes all footnotes. Includes the legal issue, law/relevant principles, application and conclusion. The hypothetical scenarios: Nulla Nulla Shire Council has recently encountered the following difficulties with outside parties with whom it has had discussions, negotiations or arrangements for the provision of goods and services. 1. The Council’s maintenance manager Lucy issued a call seeking interested parties to tender for a three-year cleaning contract for the Council’s premises. There had been tensions between the Council’s existing cleaning contractor Ezy-Kleen and Council management, which declined to grant an extension of its contract. The call indicated that all tenders had to comply with a prescribed form, and attach certain company information and testimonials. They also had to be received by Council by a specified time. Despite earlier tensions, Ezy- Kleen put in a tender as stipulated. Only one other company, Ace Cleaning Services (Ace), tendered for the job and it also complied with the call’s requirements. However, the application by Ace was incorrectly date stamped and marked as ‘received late’. The result was that its application was not considered and, to the surprise of many on Council’s staff, Ezy-Kleen was granted a new and revised contract. The discrepancy was the subject of an internal review. Ace is now threatening to commence legal action against the Council for breach of contract. 2. Council’s property services manager, Eric, negotiated an agreement with Boolaroo Buses Pty Ltd (Boolaroo) for the purchase of a used twelve-seat minibus for the bargain price of $35,000. The bus was to be used by Council staff for a range of transport services for children in the childcare facility, and for staff retreats and training sessions. Eric agreed on all aspects of the purchase over a cup of coffee with the Boolaroo manager, subject to final approval from the Council’s chief executive officer Louis. The manager promised to keep the offer to sell at the agreed price open for exactly one week. Eric prepared a memo for Louis seeking his urgent approval. However, after two days Eric noticed on Boolaroo’s website that the minibus was described as ‘sold’ to a local church organisation. Feeling confident that he would secure Louis’ agreement on such a good deal, he immediately rang the manager and told him the Council accepted Boolaroo’s offer. However, the manager told him the church had made him a good offer that he was happy to accept. Eric has now been directed to write a report seeking advice from Council’s legal advisers. 3. Council’s environmental sustainability manager Tanya, who was responsible for the Council’s ‘Pest-Expel’ program, agreed to help a local grain supply and stock feed business, Crop-Pro, to eradicate rats, cockroaches and other vermin from its storage facilities. However, after the Council workers did their work, much of the wheat and barley stock of the business became contaminated, causing considerable losses to Crop-Pro. Council has now received a legal letter demanding compensation. To make things worse, the Council had earlier advertised in the local newspaper that it would provide a rates discount to any local business that achieved certain environmental clean-up targets. But after Crop-Pro had made certain costly changes to its internal processes in an attempt to reach those targets, the Council publicly withdrew the rates discount plan on its website. Crop-Pro has added the rates discount claim to their demand. The Council’s works manager Mick was in charge of recently commenced renovations of Council premises. A contract was in place with a local building company, Duplo Builders Pty Ltd (Duplo), which was awarded the tender at a contract price of $1.25 million. It was a term of the written contract with Duplo that the works were to be completed in time for the Council’s anniversary celebrations. However, while the job was proceeding, a Duplo director told Mick that the company was experiencing serious cash flow problems and was not able to pay some of the subcontractors on the job. It was likely that Duplo would be put into receivership and the job terminated. Mick told the director that Council would pay a further $250,000 to Duplo for them to continue. The director then made arrangements for the job to proceed. When the works were finished on time, Council management decided that, because of emergency budget cuts, only the original contract price would be paid. Duplo has instructed its solicitors to sue the Council.

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