Reference no: EM133940227

Question

Sally Smith operates 'Specially by Sally, which sells handmade (by her) cat toys. She has recently received a large order for 10,000 toys. To make the toys, she needs a special flexible spring that, at the moment, she can only order from Heart Brave Pty Ltd. She usually deals with Bob Brave, a director, however he is currently locked down in Melbourne, so she speaks to the other director, Harry Harte. On Friday, after lengthy negotiations, Sally and Harry verbally agree HBPL will provide 10,000 springs to Sally by 1 November 2021, for $5,000. Sally tells Harry that if she cannot get the springs by that date, she will lose $20,000 profit. Harry assures her that HBPL will make delivery and she pays a deposit of $100 in cash. As it is now late Friday afternoon, and Sally is in a rush, she does not get a receipt, but Mable Martin (the office manager) sees her give the cash to Harry. Unknown to Sally, or Bob, Harry is leaving the next day (on Saturday) to return to Switzerland to look after his sick mother. After he leaves the office that Friday, Harry visits Edward's Computers a small sole proprietor business. Edward's Computers currently supplies all the computer equipment for HBPL. Edward Eager, who is the sole proprietor of Edward's Computers, is used to dealing directly with both Bob and Harry as HBPL's directors. Harry takes a laptop, a mobile phone, and iPad; which he has Edward charge to the HBPL company account. Monday is a public holiday, and Bob (finally) returns to the office on Tuesday at lunchtime to discover Harry's resignation letter on his desk, and several telephone messages from Sally. Advise Bob if a legal contract exists between HBPL and Sally, and, if so, why.