Question

LAW

Use IRAC format :

George , a logger and Andrew , a farmer , entered into a logging contract on 1 January 2016. Under the contract George would pay Andrew a fee of $10,000 on singing the contract for the sold right to log a specifies amount of Australian old-growth hardwood for the three year period . George paid the fee and commenced logging . In March of 2016 , the Government banned the logging of old-growth timber. Advise George

Jerry opens a delicatessen specialising in selling sandwiches and rolls to heath-conscious university students . He signs a one-year contract with Vogel Breads to supply him with bread made from organic wheat . On 1 April 2016, an outbreak of a virus contaminate much of the organic wheat crop . Supplies can't resume for a month . Jerry tries to find another supplier but is unable to do so. As a result, Jerry has to close the business for the month, losing $25,000 in profit . He is also unable to fulfil a contract to supply the bread at the nation scout jamboree that coincidentally is scheduled for that week . Jerry loses $120,000 on that contract . Jerry wished to terminate the contract with Vogel Bread and sue for damage a) Advise the parties whether Vogel has committed a breach of the contract allowing Jerry to terminate and sue for damages and b) Assuming there is a breach what damages would Jerry be entitles to ?

Answer 1

CASE 1
ISSUE - George being a logger has paid $10,000 to andrew on signing the contract for the sold right to log a specifies amount of Australian old-growth hardwood for the three year period on Januray 1, 2016.As Goverment banned the logging of old growth timber in March 2016. here is an issue in their contract and with the amount which george paid for signing the contract.

RULE - As goverment has banned the timber logging so george should immediately stop cutting wood.

ANALYSIS - Since the contract has already been signed by both the parties in past without being aware of any such decision by government in future, so there should be win - win situation for both the parties as there has been the problem due to involvemnt of the government - External Party.

CONCLUSION - George has to stop the logging after three months of signing the contract, so he should recover the possible amount by selling the timber which he has obtained in these three months and for the remaining amount he should file a case addressing the recovery.

CASE2

Part A
The issue is whether Vogel bread has committed a breach by performance, jerry's argument would state that Vogel breads repudiated the contract as they were unable deliver because of the virus, Vogel breads on the other hand would argue that that the contract has been frustrated due to the usual circumstance (The virus). The general rule that applies to repudiation is that one party repudiates the whole or remainder of the contract conduct accounting to repudiation is that party is unwilling or unable to perform the contract, case Laurinda vs Capalaba. The effect of repudiation is that the incident party may terminate immediately and sue for damages, or insist for performance, The rules that apply to frustration is that the contract must become illegal, impossible or radically different because of the frustrating event case; Davis contractors, they must meet the following conditions; An event that occurs after the contract is made, Causes a fundamental change to the nature of the contract That is not the fault of either party, And was not foreseeable So it would be unfair to enforce the contract. Because they could not deliver only for that month, the contract has not been radically altered and therefore is unable to be frustrated as they have a one-year contract, and simply not being able to delivery for one month would not frustrate the contract. Hence the outcome of this case would be that there was a breach in performance because Vogel bread repudiated

The general rule that applies to repudiation is that one party repudiates the whole or remainder of the contract conduct accounting to repudiation is that party is unwilling or unable to perform the contract.

If the vogel breads could not deliver only for that month and they could for the other months, then wouldn't that mean vogel breads hasn't been repudiated and there's only been a breach In warranty a lesser signifies term and jerry would only be able to sue for damages

Part B

The issue is whether jerry is entitles to the damages from the breach profit measuring in at 25000 and the 120000 loss that occurred as result if closing down the shop, the law that applies to the remedies of breaches under common law contracts are damages however the extent to which these damages ae awarded depend on the measure of damages, causation and the remoteness principle, the measure of damages can be measured by pouting thee parties in the same position he or he would have been as if she or she performed, case Robinsons vs Harman. In this case the jerry would not have suffered the 25000 and he would not have needed to close the store resulting in the loss of 120000 from being able to perform another contract Reliance costs - unusual - where no profit expected but expenses incurred in anticipation of contract innocent party may be compensated for money spent in reliance on contract (see Amann Aviation). The causation principles assess but for test did the breach cause the loss, 'but for' the breach the loss would not have occurred. In this case he wouldn't have both these losses if not for the breach hand occurred, the remoteness principle states the loss must be reasonably foreseeable if it is entered in two limbs the first limb; a loss that arises natural from the breach, would a reasonable person would contemplate this loss, is there a serious possibility, the second limb; loss contemplated by the parties, notice given to the party that breach that these loses would occur. The loss from 25000 is a naturally occurring breach, resulting naturally form the branch by not having bread to sell and therefore unable to open shop. Thus, it enters the first limb, the loss of 120000 does not enter the first limb as it isn't a natural occurring, the jamboree being a unnatural event and does not enter the second limb as jerry did not provide notice to vogel breads of his contract with the jamboree and the losses he would have suffered if a breach occurred. Finally, it is the innocent party's duty to mitigate the effects of the loss as much as possible which jerry did by seeking out other suppliers. As such the court would conclude jerry would be entitled to damages the 25000 naturally arising from the breach but not the 120,000 profit loss.