RECENT ASSIGNMENT

Question
Bob Broke runs a company which manufactures and sells computer equipment. He relates the following set of facts to you:

On 1 January Bob receives an email from Mike Jones which reads: “I offer to purchase 30 Toshiba Satellite laptops for $ 300 each, inclusive of GST, delivery and insurance”. In response, on 2 January Bob sent an email to Mike saying “I accept your offer, but the price would have to be $ 300 plus GST. On 3 January Mike sends an email back saying “No, I can't agree to that”. On 5 January Bob then sends an email saying “OK, I accept your offer of 1 January”, however when he sends the computers to Mike with an invoice for $ 9 000, Mike sends the computers back and refuses to pay for them, saying that he has purchased computers elsewhere.

On 10 January, Bob sends a letter to Tom stating “Please send me 200 Pentium 5 hard-drives at $ 50 each”. On 12 January Tom puts a letter into the post stating “OK – I will deliver the hard-drives before the end of the month. Bob subsequently finds that he no longer needs the hard drives, and on 14 January sends Tom an email saying “Please cancel my order of 10 January”. Tom’s letter reaches Bob on 15 January, and the hard-drives are delivered a few days later with an invoice for $ 10 000, which Bob refuses to pay.

Steve has done favours for Bob, such as looking after Bob’s cat when he (Bob) went on holiday. On 1 February, Steve says to Bob “I need a new computer for my travel agency”. Bob says “OK, because you looked after my cat, I’ll give you a new computer”. Bob then changes his mind and says to Steve: “Sorry, mate, trading has been bad these last few weeks – I just can’t afford to give you the computers”.

Bob is thinking of buying a delivery van. He has been in negotiations with Capital Motors, whose sales manager is Mary. One Monday morning he sees a form sent by Mary in which she offers to sell him a Toyota Hilux 3000 automatic with airconditioning for $ 33 000. The top sheet of the form contains a line which says “I agree to the purchase of this vehicle as specified in this document” and with a space for a signature and date. Bob sets the document aside on his desk, and it soon gets mixed up with piles of other paperwork. Later during the day, he signs the form, thinking that it was the front page of another contract he had been sent by a supplier of microchips. He gives it to his office manager, Tim, and says “Send this by fax”. A few days later he receives a call from Mary asking him when he will pick up the vehicle. He tells Mary that he did not order a vehicle from her. When Mary tells him about the fax, he realizes what happened and tells her that he had sent it by accident and that he never intended to agree to the contract. She says “Too bad, we have a deal – I have already ordered another vehicle to replenish my stock”.

Assume that you are Bob’s legal adviser and that he has asked you for legal advice. Advise him as what contractual liability, if any, he has in the above circumstances, citing relevant statute and case law authority, using the ILAC format.
Rationale
This assessment item will allow you to demonstrate your ability to
engage in legal research;
identify the legal issues arising out of novel factual situations, to analyse the applicable law and to differentiate between which rules are applicable and which are not and then apply the law to the problem;
explain and summarise the applicable law in such a way as to create a report for a client which states what liabilities arise from novel factual situations
And more specifically
your knowledge of the law of contract formation and the law relating to factors affecting the validity of contracts
your ability to undertake an assessment task relevant to the workplace and professional practice.