Green enforce employment contract

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Reference no: EM133801014

MAJOR ASSIGNMENT QUESTION

Ella recently started a small business in Perth, selling organic beauty products through her company, Green Pty Ltd ("Green"). Seeing the growing demand for organic and natural products, she decided to enter this market. Confident in her business idea, Ella began searching for suppliers of natural beauty products. Her friend Angela mentioned AAA Ltd ("AAA"), a Perth-based company offering bulk natural beauty products at competitive prices.

Excited by the prospect, Ella contacted Bella, the manager at AAA, to inquire about their organic beauty soap. Bella assured her, "Our organic beauty soap products are made with 100% organic substances." Ella replied, "That's exactly what I need." She then asked about pricing and the possibility of securing regular supplies for 12 months. Bella informed her that each carton, containing 100 pieces of organic soap, would cost $200. Ella thanked Bella, mentioning that she was seriously considering it and would confirm via email.

The next day, Ella received an email from 3D Ltd, offering a similar organic beauty soap called "Fresh-Cool" at $180 per carton (100 pieces). Tempted by the better price, Ella confirmed by email that her company would purchase 100 cartons of "Fresh-Cool" weekly for 12 months.

Over the next few months, Ella received regular supplies of "Fresh-Cool" from 3D Ltd and was generally satisfied. As her business grew, Ella hired John as a full-time customer service employee to manage orders. Seeing his potential, she later offered John the position of executive director at Green for a 4-year term, with an option for renewal. The contract included a non-compete clause, preventing John from working for competitors in Perth for 10 years after leaving Green. Despite initial hesitation, John accepted, recognising the boost to his resume.

Recently, however, Ella began receiving complaints about the quality of "Fresh-Cool" soap. She discovered that 3D Ltd had been supplying a cheaper, non-organic brand called "Fresh-Fool" instead of the agreed "Fresh-Cool." 3D Ltd had prioritised its prestigious clients with the higher-quality "Fresh-Cool" soap, which led to higher profits for them.

Frustrated with 3D Ltd's delayed deliveries and inferior products, Ella believes the company is in breach of contract and wants to terminate their agreement.

Meanwhile, overwhelmed by the growing issues in the business, John resigned after receiving a better offer from a competitor, Naturo, leaving Ella furious.

Ella seeks your advice on the following issues:

1. Is there a valid contract between Green and AAA, despite Ella's belief that there isn't?

2. Can Ella take action against 3D Ltd for supplying non-organic beauty soap and failing to meet the contract terms? What remedies are available to Green?

3. Can Green enforce the employment contract against John, preventing him from joining Naturo?

Reference no: EM133801014

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