LAWS 1015 MID-SEMESTER PROBLEM, FIRST SEMESTER 2017 These Instructions for completing the assignment below are in addition to those on pages 7 to 8 of the Unit of Study Outline. PLEASE ADD YOUR TUTORIAL DAY AND TIME (AND TUTOR'S NAME) TO THE COVER PAGE OF YOUR ASSIGNMENT. WORD LIMIT: The word count is 1,500 words excluding footnotes that do not contain substantive argument. This word limit is strictly enforced and a 10% penalty (10% of the available marks or 3 marks) will be applied for each and every portion of 100 words in excess of the word limit. Please write your word count on the front page of your assignment. DUE DATE: 4.00PM ON WEDNESDAY 26 APRIL 2017. There is a penalty of 10% of the available marks (3 marks) will be applied for each and every day the assignment is overdue. For the sake of clarity, up to 1 day overdue is a 3 mark penalty; up to 2 days overdue is a 6 mark penalty; up to 3 days overdue is a 9 mark penalty. In 2016, the average mark for this item of assessment was around 19.5 out of 30. If you are late in submitting the penalty would be deducted from the mark your tutor gives (so 19.5 - 9 marks if three days late means 10.5 out of 30, a failing mark). YOU ARE STRONGLY ADVISED TO ANSWER WITHIN THE WORD LIMIT AND TO SUBMIT ON TIME. STYLE: You are writing an internal memorandum of advice for the partner of First XI Lawyers. You should cite authorities for the principles of law you use in your answer, using pin-point referencing and following the AGLC 3rd edition guidelines. Use of headings in your answer is expected. Line spacing - we recommend using 1.5 or double-line spacing to make it easy to read your work. Remember your tutor will be marking at least 17 assignments/tutorial group, so easy to read = easy to mark. For example, this document uses 1.5 line spacing and 12 points before and 6 points after each paragraph. Font - for similar reasons, we recommend using at least 11 point font. FOOTNOTES: Due to the word count limits, you are advised to put your case citations into footnotes. These footnotes must also follow the AGLC 3rd edition guidelines. The footnotes must not contain substantive argument: just the citation. 1 LAWS1015 MID-SEMESTER PROBLEM, SEMESTER 1, 2017 ASSIGNMENT QUESTION Brenda Badass is an Australian cricketer and is currently rated the number one batsman in the world. Alas, her good form on the cricket pitch is not matched by her behaviour off the field, with widespread media coverage of her erratic behaviour in 2016. Her two major sponsors, concerned about their brand images, cancelled their sponsorship contracts with her. These contracts generated around $2.2 million per year in income for Brenda. While the rates of salary paid by the ACB to Australian women cricketers are improving, her future income stream and lifestyle are going to be severely impacted due to the cancellation of the sponsorship contracts. While Brenda has always dreamed of having her own global empire of Badass Cricket Boot Camps, she realises these will take time and money to develop. Her more pressing need is to generate income. In late 2016, she commenced discussions with Axe Fine Cricket Bats Pty Ltd (Axe), an Australian company specialising in the manufacture of top range cricket bats. Brenda made it clear in her negotiations with Axe that she needed the manufacture of the cricket bats to proceed quickly. The negotiations result in Brenda and Axe signing the following document on 6 January 2017: MEMORANDUM OF INTENT 1. Having completed negotiations, Brenda Badass and Axe Fine Cricket Bats Pty Ltd (Axe) agree to sign a formal contract. 2. Under the contract, Axe will manufacture a signature series of Badass Bats for sale to Brenda Badass with a view to her selling the cricket bats via her own website badasscricket.com.au 3. The cricket bats will be manufactured according to design specifications to be supplied by Century Pty Ltd (Century). Axe will enter into a contract with Century for this purpose. 4. The price of the manufacture will be determined by Axe. 5. Brenda Badass has final approval of the design and agrees to execute a formal manufacturing contract reflecting these terms and the specifications. 6. This agreement is for an initial production run of 1,000 cricket bats. The parties agree to negotiate a further agreement for a second run if the first run proves successful. Axe entered into a design contract with Century and, on 20 January 2017, Century sent Axe a set of preliminary specifications. These specifications clearly showed the overall design and included enough other detail for Axe to get started on the manufacture. Axe forwarded a copy of the specifications to Brenda and let Brenda know they had commenced preliminary aspects of the manufacture. Brenda sent a text message to the manager of Axe to thank him for getting things moving so quickly. 2 LAWS1015 MID-SEMESTER PROBLEM, SEMESTER 1, 2017 Century sent the final specifications to Axe on 6 February 2017. They contained some minor changes that could easily be incorporated into the work Axe had done. Axe then went about assessing the price, arriving at a figure of $1,000,000 for the first run. By this time they had incurred $400,000 in costs. Brenda was informed of the $1 million price on 8 February 2017. In talking things over with her boyfriend, she expressed the view that it was too high. Brenda had paid for some market research and, based on that research, believed she could easily sell the bats via her website for $2,000 each. Based on her experience of selling t-shirts and cricket caps via her website, she expected she would have similarly very low overheads of around 5% in selling the Badass Bats directly to the public, with manufacturing costs on top of this. On 10 February 2017, Brenda approached Century to ask whether they could create a new set of specifications for the bats that were not 'top of the range' in terms of quality but were instead mid-range in quality. Axe knew nothing of this and kept manufacturing the bats as per the original specifications. By 15 March 2017 they completed the manufacture of 1,000 bats. Brenda refuses to pay for the bats or take delivery of them. She claims there is no contract obliging her to pay for them and, moreover, she has not approved the design specifications. Following the conversation with Brenda, in which Axe learns of the 10 February conversation between Century and Brenda, Axe now refuses to pay Century's invoice of $200,000. Axe approaches the law firm you work for, First XI Lawyers, seeking advice. It wants to know if it has a contract with Brenda or if it has any other rights against Brenda. Axe also tells you it has heard from Century's lawyers who say they are going to pursue Brenda for the $200,000 owing under Century's design agreement with Axe. Axe provides you with a copy of the design agreement which mentions Brenda Badass in the context of the purpose for which the design is required. It also states, consistent with clause 5 of the memorandum of intent, that Brenda would have final approval of the design, with Axe agreeing to send the design to Brenda for these purposes. The design agreement also states that it is between Axe and Century, with directors from each of these two companies signing the document. Axe wants to understand whether Century could sue Brenda directly under contract law for that amount. Your partner asks you to look into these legal issues and draft a memorandum of advice for him to review. He indicates that you need not look at the Australian Consumer Law in relation to these issues. He is also not interested in any tortious basis of liability. 3 LAWS1015 MID-SEMESTER PROBLEM, SEMESTER 1, 2017