Question 1 (13 marks) Linda is the manager of a supermarket named John’s Supermarket, which is located in a large country town on the north coast of NSW. The store was named after the owner, John Miley, who lived in Sydney. On his frequent visits to the store, John would discuss the purchase of replacement stock and sign the necessary orders for Linda to dispatch to the suppliers. As a rule, sufficient stock was ordered during John visits so that Linda had no need to order further stock. Shortly after John’s visit in December, Cathy, the sales manager of AFS Grocery Wholesalers Co Pty Ltd, called at the store and showed Linda the orders she had taken from a nearby supermarket with which John’s Supermarket was in direct competition. Linda was in a dilemma. John was overseas for the next two weeks and had left no contact details. Faced with the absence of John and very worried about losing customers to his competitor, Linda placed an order for $45,000 worth of goods for the lucrative Easter trade. Three days later Linda received the goods and immediately placed them on sale. Unfortunately, the next day John had a large consignment of similar goods delivered to the store. In a note he apologised for not informing Linda of this consignment but said he had been busy with other retail business matters. On his return to Sydney, John received an invoice for $45,000 for the goods supplied by AFS Grocery Wholesalers Co Pty Ltd to his north coast store. He immediately informed the company that he would not pay. In a letter to the company he said:” I will not pay because Linda the manager of my store had no authority to order those goods.” You are required to: Advise AFS Grocery Wholesalers Co Pty Ltd:
1. Of any legal rights they may have in order to obtain payment of $45,000 for the goods they delivered to John’s Supermarket (9 marks).
2. Would your advice differ if John informed you that Linda was expressly prohibited from ordering any goods without his authority? (4 marks).
In your answer, you are required to refer to relevant legal authority.
Question 2 (12 marks) Bruno was a peasant farmer in Italy and had very little education. In 2010, he and his wife migrated to Australia. Soon after his arrival in Australia, he purchased a small farm on the south coast of NSW for $220,000. In early 2012, Bruno’s wife who had never wanted to migrate to Australia left him to return to Italy. Bruno was devastated as a result of his wife’s departure and entered into a prolonged depression. This was compounded by an excessive consumption of alcohol. In mid-2012, Brno was approached by Slybo, the managing director of Moreslybo Pty Ltd, a company that was involved in property development. Slybo told Bruno that the company was keen to purchase his property. Bruno in several conversations with Slybo told him of what had happened since his wife had left him. Slybo suggested that Bruno should return to Italy and try to patch things up with his wife. Slybo then said that, in order to help Bruno, Moreslybo Pty Ltd would purchase Bruno’s property for $160,000. Bruno was so happy that he could go back to Italy and be with his wife again and so he agreed to sell his property. Next day a contract between Moreslybo Pty Ltd and Bruno was prepared by the company’s solicitor and signed in the solicitor’s office. A few weeks later, and before the sale of his property was concluded, Bruno was pleasantly surprised when his wife returned to Australia. She told Bruno that she could not live being separated from him. She said “I want to live with you and work the farm so that we have a future together. If things go well we can eventually make regular trips to Italy “. Bruno was delighted with his wife’s plans for their future. Bruno told her of the contract he signed for the sale of the property. She became very upset at the news and pleaded with him to keep the farm. Bruno now wants to keep the farm. He wants to get out of the contract with Moreslybo Pty Ltd.
Advise Bruno of any legal rights he may have to be released from liability under his contract with Moreslybo Pty Ltd.
In your answer, you are required to refer to relevant legal authority. =======================================================
For reference just follow: - Lindgren, KE 2011, Vermeesch and Lindgren’s Business Law of Australia, 12th edn, LexisNexis, Australia. ISBN: 9780409328172.
Words limit 2400