Reference no: EM131624243

Write shore answer for these questions.

Question 1:

Smashrepairs repairs cars. The company is owned by Doug. Doug wants to sell the business. Doug's major customer is a company called "Used Car Ford" which is the major seller of used car Fords in Australia. This contract is worth > $500,000 to Doug. Ford gets Doug to repair and check all of its cars before Ford resells them. Under Doug's contract with Ford, Smashrepairs does all repair works for Used Car Ford. However, this contract expires (ends) in March 2013. Doug would then have to reapply to get Used Car Fords work. Doug is not confident about Ford renewing this contract as Ford thinks it can get cheaper deals elsewhere.

Doug is worried that he will never get Used Car Ford again so he decides to sell the business. He approaches Anna to buy the business. Anna is very inexperienced. She has rich parents who gave her money to start a business. This is her first business activity. Doug says

- This is a great business with large profits.

- We do all the used car work for Used Car Food, a massive second hand car seller.

Relying on this statement, Anna buys the business. Unfortunately after buying the business she learns she will have to reapply for Ford work in March 2013 and she fails to get the business. She had assumed that this contract with Ford was continuing. Can Anna sue for misleading conduct in relation to buying the business?

Question 2:

Sally owns a subway on Main North Road in Prospect. She learns a McDonalds shop is going to open next door. Construction on the McDonalds will not happen for 6 months however. Sally decides "this will hurt my profits" so she decides to sell her Subway. Sally finds a buyer in Max. Sally shows Max the profit and loss figures and all other information connected with the business. However, Sally does not reveal her knowledge that a new McDonalds will open next door. Max never asks about this either. Max then buys the business. 1 month later Max learns that a McDonalds store is opening, and that Sally deliberately kept this information quiet.

What are Max's arguments in suing Sally for misleading conduct under s18 of the ACL. What are Sally's arguments? Whose do you prefer?

Question 3:

Simon is an art buyer. Simon prides himself on identifying genuine art work. Simon goes to a small art gallery in London (called Art Treasures Ltd). They have an unidentified art work but Simon is convinced it's an early Picasso painting. He tells no one and buys the work from the art gallery for $10,000.

Later Simon confirms (through an expert) that it's a true Picasso painting and it now has a market value of $2,000,0000. Simon boasts "I knew all along it was a Picasso painting - I am the world's best art dealer". The CEO of Art Treasures Ltd is furious and writes Simon an angry letter

"You knew all along that it was a Picasso painting and you should have told us. We are suing you for the $2000,000 we have lost because of your misleading conduct".

Assume s18 of the ACL (misleading conduct) also applies in London. Can the CEO of Art Treasures sue Simon? Has Simon misled Art Treasures Ldd.

Question 4:

The Zoo must buy food for its animals. The zoo enters a contract with Animal Feed Co to buy animal feed for its animals. It buys pellets for the American Pika. The animal feed its buys are usually for Hamsters and other cheap animals. The American Pika is a rare animal that costs $50,000.

Unfortunately, the animal feed is of bad quality, and the zoo's two American Pika that it was hoping to breed die. The Zoo wants to sue for at least $100,000, but maybe more, as it was hoping these 2 animals would breed more children. The Zoo had failed to tell Animal Feed Co that they were going to be used for this endangered animal.

Can the Zoo sue for the $100,000 (or more)?

Is the situation different if before the contract was entered into the Zoo told them that they were buying the food for the endangered animals, nad let them know ‘this animal costs $50,000'?