Contract law

North field Ltd is the owner of a retail shopping Center in Sydney. Bill, a florist, negotiated a lease of one of the shops for his business for a period of five years. A comprehensive written document containing the nSample Solutionegotiated terms of the lease was prepared by North field’s legal department and forwarded to Bill for signature. Prior to signing the written document Bill obtained a verbal assurance from North field’s Center manager, Leo, that the company would not, during the currency of the lease, permit any of the other shops in the shopping Center to be leased as a florist shop. Upon receiving Leo’s assurance, Bill signed the lease. However there was no term actually included in the lease placing any limitations on North field in relation to the leasing of other shops in the shopping Center.
Sample Solution
In relation to the above facts:

(a)If, two years later, North field leased one of the shops in the shopping Center to Charlie, who opened up a florist shop, could Bill sue North field for damages for breach of contract?

(b) How, if at all, would your advice in (a) differ if the written lease had included a clause that stipulated that the lease expressed the entirety of the agreement between North field and Bill and that neither of them had been influenced or induced to enter into the lease by any statements or assurances given by either of them before the lease was signed?


Question 2

Emma loves ice skating.  She regularly skates at Macquarie Ice Rink, but also likes to skate at any available rink wherever she happens to be in order to keep up her skating ability and fitness. She has skated at most rinks in Australia – both socially and in competition.

The Macquarie Ice Rink displays a large sign mounted on a wall before the main entrance, which in big red letters includes the following words:

‘Patrons skate at their own risk.  The Macquarie Ice Rink is not liable for any loss or injury howsoever caused.’

Emma rushes in to skate one morning before the commencement of her university classes and pays her entrance fee to the cashier. As she is making her way towards the main rink in order to put on her skates, she slips in a large puddle of water, breaking her leg. The manager of the rink apologises to Emma for the water which was left carelessly on the floor, but advises her that the rink is not liable to compensate her for any damage she may have suffered because of the notice displayed at the entrance. Emma complains that the rink cannot avoid liability because when she entered the rink that morning the sign – normally visible – was obscured by tinsel left over from a staff party the night before.

Assume that the exclusion clause has been incorporated into the contract between Emma and the ice skating rink. Advise her about the court’s likely construction of the clause.


Question 3

Bernard has been an employed chef for some years and is now interested in purchasing a restaurant business and transforming it into his own style of eatery. He sees an advertisement for a restaurant for sale as a going concern and makes an appointment with the owner, and the selling agent, Clare. Bernard comes to visit the premises for an inspection with Alfons and Clare about one hour before the lunch session. The restaurant appears to be ready for the patrons, with 25 tables arranged neatly with cutlery and floral decorations. At each table there are four chairs. Clare tells Bernard in the presence of Alfons that the restaurant is licensed for one hundred patrons.

Bernard later makes his own inquiries and discovers the restaurant has a licence for only 80 patrons. He decides nevertheless to purchase the business because he likes the location and layout of the premises and feels he will inherit a good clientele. However, he fails to make a profit and now seeks advice about having the purchase set aside.

Advise Bernard about the prospects of succeeding in an action based on common law misrepresentation.


Question 4

Provide a case analysis of Commercial Bank of Australia v Amadio (1983) 151 CLR 447; [1983] HCA 14. Discuss the importance of the case for contract law in Australia.


In every answer you have to consider *facts*decisions*implication*conclusion




Sample Solution