LAW5002: CONTRACT A - Law Assignment Help

Assignment Task

Applicable Law

The applicable law for this assignment is the law of the State of Victoria.

ASSIGNMENT QUESTION

Haley James is a 38-year-old mother of 2 primary school going children. 

Now that the kids are more independent, she has decided to go back to work. Haley has always been passionate about teaching and recently underwent the selection and training process of becoming a Kumon (a globally known Math and English language program originating from Japan) franchisee.

Excited about being able to own and run her own Kumon centre in Melbourne, Haley decided to purchase an existing Kumon business near her home, rather than set one up from scratch. 

Her thinking behind this idea was that she could hit the ground running in terms of buying over the existing clients (student folders in this case) and expanding the business from there.

 She was delighted that an old school-mate of hers, Mark Edwards, was coincidentally, looking to sell his Kumon centre in Brighton for $50,000. She checked out the centre over the next few days and spoke to her husband about raising the funds for the purchase.

Mark and Haley then met at a café near the Brighton Kumon centre the following week on 1 June 2022 and proceeded to sign the following document which Mark had prepared:

“Heads of Agreement to Purchase the Brighton Kumon business at 221 Brighton Road”

Proposed terms and conditions to purchase the above business. Vendor’s standard contract of sale will be adopted incorporating the following details:

Vendor: Mark Edwards of 1, Joy Street, Brighton

Purchaser: Haley James of 1, Fare Street, Hampton

Business for Sale: Brighton Kumon business at 221, Brighton Road together with all existing business (Kumon students’ folders); assets & goodwill; & existing lease for 221, Brighton Road.

Price: $50,000

Deposit: 20% of purchase price ($10,000) to be paid on execution of the Contract of Sale of Business (2% initial deposit of which is payable on signing the Heads of Agreement to Purchase).

Full Settlement: 80% of purchase price ($40,000) to be paid on 31 July 2022

Haley paid the initial deposit of 2% ($1,000) of the purchase price on 1 June 2022 and was given the keys to the premises on the same day.

On 5 June 2022, Haley went to inspect the set-up and furniture used in the Brighton Kumon business.

 She found them to be outdated and in poor condition, and decided to buy new foldable tables and chairs to be used for the business instead.

 Haley went to Student Friendly Furniture Pty Ltd (SFF) and spoke to its managing director, Philip Wang, with respect to purchasing 10 large foldable tables and 50 chairs which she thought would be ideal for the students at the centre.

Philip was willing to give Haley a discount of 20% on the tables and chairs she wanted, until 5pm that Friday, telling her to call him on his mobile or office phone by then to confirm, or else the red-hot offers would have ended and the regular price would apply.

 Haley completely forgot about the offer and only remembered at 4pm on the said Friday. 

She immediately sent Philip an email confirming the purchase which arrived in Philip’s inbox at 4.15pm.

 Having had a busy day and week, Philip couldn’t wait to close the store for the weekend at 5pm that Friday, notwithstanding that he noticed there were a few messages that had just come in.

 When Haley didn’t hear back from Philip on Friday, she called him on Saturday morning to arrange for collection of the tables and chairs, only to be told that the red-hot deal was no longer available. 

Haley insists that they have a contract for the tables and chairs on Friday at the discounted price.

Meanwhile, on 1 July 2022, a third party, Shaila Varma offered to purchase the Brighton Kumon business from Mark for $60,000, and a very excited Mark entered into a contract for sale with her immediately.

 Mark then called Haley on 1 July itself and told her that the sale with her will not proceed and sought to return her 2% initial deposit paid.

Haley is understandably upset and insists that they have a binding contract for the sale of the Brighton Kumon business

Advise Haley regarding the following matters:

(a) Does she have a valid contract with Mark for the sale and purchase of the Brighton Kumon business?

b) Irrespective of your answer to part (a) above, is she legally entitled to the 20% discount with respect to the purchase of the tables and chairs from Student Friendly Furniture Pty Ltd?

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