Gary runs a metal fabrication business in inner city Hobart and has a long-term (12 years) lease of his factory. He has won a tender to supply metal frames to be used in the construction of a high rise apartment development. The contract provides for the progressive supply of the metal frames and there is work for about 18 months on the project, which is estimated to last two and a half years.

A month before the first set of frames are due, Gary is informed by his landlord that the state government, as part of the new bridge project at Bridgewater, has compulsorily acquired the land where Gary's factory stands and he has to vacate the premises within six months in accordance with the terms of the lease. It will take Gary time to find another factory and it could take another three to six months to set up the factory to commence production of the metal frames.

Advise Gary in relation to the contract to supply the apartment developer.

Answer rating: 100% (QA)

In this scenario Garys lease of the factory has been terminated due to the compulsory acquisition of the land by the state government As a result Gary ... View the full answer