Hogwarts University (Hogwarts) is a private University located in Brisbane. Slytherin Bank Pty Ltd (Slytherin) is a private company that markets its banking products to young adults. In mid-2016, as part of a marketing campaign, Slytherin decides to provide two $50,000 scholarships to commencing students to attend Hogwarts. The details of the scholarship are set out on the Slytherin webpage. To apply for a scholarship, an applicant must open a bank account with Slytherin and complete their details on an application form and drop it in the barrel at the Slytherin banking outlet before 2 September.Slytherin states that the scholarships are to be 'awarded by ballot to the persons whose names are on the first and second application forms drawn out of the barrel'. Harry, Hermione, Draco and Ron, who are each 18 years old, open an account and drop a completed application form in the barrel before the due date. They are the only applicants. Due to the lack of interest, Slytherin decides to provide only one scholarship. On 3 September, it sends a letter to all of the applicants advising them of the withdrawal of the second scholarship.

Later that week, Slytherin draws Hermione's application out of the barrel. Slytherin sends Hermione a letter advising her of this and that it is awarding her a scholarship. It also advises her that it is increasing her scholarship to $80 000 and asks for her bank details so that it can deposit the $80 000 into her account. Hermione emails her bank details to Slytherin.

It is now early 2017 and Slytherin advertises in its weekly newsletter that it will be providing an $80,000 scholarship to Hermione. However, Hermione is still awaiting the bank deposit from Slytherin. Hermione turns down other opportunities and is admitted to her selected degree program at Hogwarts. She enrols in her first-semester subjects, purchases textbooks and starts her classes. It is February 2017 and Hermione's first-semester fees are now urgently due and payable to Hogwarts. Hermione still hasn't received the bank deposit from Slytherin. However, she has no reason to doubt that the money will be forthcoming. She borrows some money from a short term lender, Horace Finance Pty Ltd, at a cost of 10% interest per month. She uses this money to pay her first-semester fees. Shortly after, Slytherin telephones Hermione and tells her that it has changed its mind about her scholarship. It is refusing payment altogether.

Consequently, Hermione is now in serious financial difficulty. Harry, Draco and Ron are disappointed about the withdrawal of the second scholarship and are threatening to sue. Hermione discovers that, due to financial concerns, Slytherin was having doubts about her scholarship in late 2016 and that it advised its finance department to 'hold off' on making the payment to her. Hermione is also threatening to sue.

Answer rating: 100% (QA)

Issues to consider in this case 1 Was Slytherins scholarship offer and subsequent withdrawal of the second scholarship legally binding 2 Can Hermione enforce Slytherins promise to award her a scholars... View the full answer