Santosh operates a successful fast-food franchise called “Santosh’s Food”.  Tasty Pty Ltd is keen to open a ‘Santosh’s Food’ outlet in the Melbourne suburb of Bundoora. The parties reach an agreement that Tasty Pty Ltd will operate a Santosh’s Food restaurant in Bundoora for a period of five (5) years.  The agreement contains the following terms:

9.  Santosh promises that he will not open another Santosh’s Food franchise within the Bundoora area during the franchise period (that is, five (5) years)

13.   Tasty Pty Ltd promises that it will operate the restaurant strictly in accordance with the laws and regulations set out in the Health Act.

One year after the restaurant opened, Tasty Pty Ltd was charged and found guilty of breaching the Health Act.  Santosh immediately canceled the remainder of the Franchise agreement and opened another Santosh’s Food franchise in Bundoora.  Santosh decided to operate this new franchise himself.

Advise Tasty Pty Ltd whether it has an action for breach of contract against Santosh, and (if so) what the appropriate remedies might be.  Give reasons for your answer.

Assume that your answer is not affected by the Franchising Code of Conduct.  

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In the law of contracts contractual terms which can either be expressed or implied are binding to all the parties involved Kelly et al 2020 Generally ... View the full answer