Essay 1029/7729LAW: Contracts 1- Bob – Tina Case Study – Law Assignment Help

Assignment Task:

QUESTION 1 

Bob, an architect with the local Council, owned a block of shops in Kenmore, Queensland. He leased one of the shops to Fiona, who opened a new coffee shop. Fiona’s coffee became a very popular place to go so she became interested in expanding her business (including renovating the existing shop structure). Fiona approached Bob in March with an offer to buy the shop premises. Bob referred Fiona to his solicitor Helen, who had been instructed to negotiate the sale of the shop. On 20 March, Fiona and Bob had a long meeting, where they agreed that Bob would sell the shop premises to Fiona for $200,000 with a deposit of 10% to be paid immediately and the balance being paid upon settlement. It was also agreed that, given Bob’s experience in architecture and local government processes, he would assist Fiona in applying for building approval for the renovations. No date was agreed for settlement. At the time of the negotiations, Fiona stressed that the deal was subject to her solicitor drawing up a formal contract and inserting any further terms that are necessary based on title and other essential property searches. Bob says, “of course, that’s just the usual checks – we have a deal”. At the conclusion of the negotiations on that day, Fiona signed a cheque in favour of Bob for the $20,000 deposit and Helen signed and gave Fiona a receipt, which states: “20 March 2020: $20,000 received as a deposit, the balance of $180,000 being payable at settlement.” Bob was pleased that an agreement had been reached and, as a token of goodwill, allowed Fiona to remain in the premises at a reduced rent until settlement. Fiona immediately instructed an architect to begin working on plans for submission to the council. Fiona also began some landscaping work in the gardens. While Bob was visiting one of the other shops in the block, he noticed the landscaping work being done, but was unaware that work had begun on the building plans. 

QUESTION 2 

(a) Tina decided to spend some of her savings on installing an in-ground pool in her backyard. She entered into a contract with Joe of Pebbles Pools Pty Ltd for “installation of an Imperial Design in-ground pool and all necessary associated works” for $30,000. After one week of digging the hole for the pool, Joe advised that he had struck a heavy rock. Joe said that he would need to bring in heavy equipment that would cost him an extra $5,000, which was not factored into his original quote. Joe says to Tina, “I run my business on such tight profit margins, so if I have to pay the $5,000 to hire the equipment it would send my business into bankruptcy”. Tina, feeling bad for Joe, told him to go ahead and hire the equipment and she told him that she would pay for it. Joe went ahead and hired the heavy equipment. The following week, Tina was out having a coffee with a friend who was a retired lawyer. The retired lawyer told Tina that she did not have to pay the extra $5,000 that she had offered to pay Joe. After the coffee meeting, Tina phoned Joe and said she would not be paying the extra $5,000 to him for the hire of the heavy equipment.