At the Trade Fair, Jenny and Mia find a stall with several displays of fabric designs that they both like. They approach the stall owner, Marc, to discuss purchasing some fabric. Marc explains that the fabric is usually $15 per metre, but that the price will reduce to $10 per metre if they make a bulk order of 100 metres or more. Jenny starts doing some calculations on her phone. "Let's put in $500 each and buy 100 metres" she says. Mia, on the other hand, is worried

Scenario Part 2 – 15 marks

The “International Fashion Trade Fair” is on in Sydney and Jenny feels this is an opportunity too good to miss. Mia agrees that this will be a good chance to meet other designers and to source some fabric for the handbags.

At the Trade Fair, Jenny and Mia find a stall with several displays of fabric designs that they both like. They approach the stall owner, Marc, to discuss purchasing some fabric. Marc explains that the fabric is usually $15 per metre, but that the price will reduce to $10 per metre if they make a bulk order of 100 metres or more. Jenny starts doing some calculations on her phone. “Let’s put in $500 each and buy 100 metres” she says. Mia, on the other hand, is worried.

She only has about $650 in her bank account and her car needs major repairs and her rent is due at the end of the week. Mia, however, doesn’t want to upset Jenny, so she decides to say nothing. They finish up their time at the Trade Fair with Jenny exchanging mobile telephone numbers with Marc.

When Mia arrives home that afternoon, she receives a larger than usual electricity bill in the mail. That night Mia sends Jenny an email that says:

“Hi Jenny. I really don’t think I can afford $500. What about if I put in $200? I would keep only 20% of the profit and you would have 80%. Let

me know what you think?”

Two days later, Jenny drops by Mia’s house and explains excitedly that she has called Marc and ordered and paid for 100 metres of fabric. Mia interrupts her saying “didn’t you get the email I sent?” Jenny explains she’s been too busy to check her email regularly and is really annoyed with Mia, and says “Mia, you can’t pull out of this now. I’ve already ordered and paid for $1000 worth of fabric.

You owe me $500!”

 

  • Advise Mia as to her legal position. Does a binding agreement exist

that obliges Mia to pay Jenny the $1000?

  • Include references to any case law and the relevant sections of any

applicable legislation.

  • Note: the assignment only covers material from weeks 1-5.
  • For the purposes of answering this question, you are only looking at

any agreement. Do not consider issues of consideration or intention.

  • Part 2 should be no longer than 3 pages.

 

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