QUESTION 1
A. Ada was a wholesaler and retailer in the jewellery business. A friend of hers, Roberta, was an importer of fine jewellery and sold the jewellery in three shops that she owned. There was no business connection between them. Ada discovered that Roberta was importing jewellery at a much cheaper price than Ada paid
After making extensive inquiries, Ada located the name of Roberta's supplier: Qualstone Co. in Sri Lanka Ada contacted Qualstone and ordered jewellery pieces at $50 per piece. Ada signed the contract in Roberta's name but for Ada's own financial benefit. She did not have the consent of Roberta to enter the contract. Roberta discovered the transaction and wants to obtain the benefit of the contract. Advise Roberta of her legal rights. In you answer you are required to refer to relevant legal authority
B. Peter wrote to Alan and asked him to buy 200 ladies Society Brand dresses for him at not more than $60 per dress. Alan went to Toselli warehouse and chose 200 Society Brand dresses. He did not tell Toselli that he was acting on behalf of anyone. Alan signed a contract in his own name for the purchase of 200 dresses at $60 per dress.
On discovering this transaction, Peter informed Toselli that he was Alan's principal and demanded that Toselli deliver the dresses to him. Toselli refused, claiming that the contract was with Alan and would deal only with Alan.
(a) Advise Peter of any rights he may have against the above parties in regard to the contract of 200 dresses at $60 per dress.
(b) What would your advice be if the contract price for the dresses had been $677 in your answer, you are required to refer to relevant legal authority
QUESTION 2
Nicko recently entered into a written agreement with Top Publishing Co to subscribe for a monthly magazine called 'English for Migrants Beginners to advanced stage' The background to the negotiations and the entering into the contract are as follows:
Nicko arrived in Australia about 10 months ago. He could not read or write in the English language. He could speak and understand spoken English with much difficulty.
He was employed as a clerical assistant by a large corporation. His job was to assist in operating the various photocopying machines used by the company. He had earlier enrolled in English language classes with an adult education centre conducted by the NSW government One day while Nicko was having dinner in a café near where he worked, he met Dan West, a sales representative for Top Publishing Co. They started chatting and Nicko told Dan about his difficulty with English. He said that this prevented him from getting any promotion in the company. Dan said that his employer published a monthly magazine called "English for Migrants Beginners to advanced stage He told Nicko that the magazine would be of great advantage to a person in Nicko's position. He explained that the magazine was very well thought of and was used by English teachers in their classes. Dan said this although he knew of only one teacher who, on an occasional basis, used the magazine. He also told Nicko that many employers have been recommending to their migrant employees that they obtain a subscription to the magazine. This statement is untrue. Dan informed Nicko that if he wanted to take out a subscription he should do so immediately as there were a very limited number still available and were available only to persons selected by Dan. This statement is untrue. Dan said: 'Nicko, you should act now or you will lose this opportunity to improve your English and this will prevent you getting promotion. Subscribe today for a better future at work and in your social life'. Dan then produced a written contract of ten pages in length containing 90 clauses including a provision by which the subscriber agreed for an additional fee to purchase binders for each year's copies of the magazine from the publisher at the end of the year of the subscription. This clause was not brought to Nicko's attention
There was also a provision in the contract by which the publisher had the discretion to review the subscription price at six-monthly intervals during the currency of the subscription and to increase the price if, in the opinion of the publisher, the production costs of the magazine had increased. This clause was not drawn to the attention of Nicko.
Nicko was not sure he understood the meaning of the causes in the contract and told Dan that he would like to telephone a solicitor friend to come to Nicko's house that night to read the contract and explain all the clauses to him. Dan told him there was nothing to be concerned about and that by waiting another day Nicko might be too late to get the subscription. Dan said'Sign the contract now and be sure of getting the magazine. You have time to go to your bank and get the money to begin your subscription Nicko then went to his bank and withdrew the money. He then signed the contract and handed the money to Dan for the subscription price. A few days later Nicko had doubts about whether he should continue with the subscription even though all his workmates agreed that the content of the magazine was of a genuinely high standard and would be of benefit to him for the development of his English skills and for his future job prospects.
Nicko now seeks your advice regarding the contract. He wants to know whether he can have the contract set aside. Advise Nicko In your answer, you are required to refer to relevant legal authority
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