Part B (9 marks)

How to answer:

RState the Relevant law;

AApply the Relevant Law to the facts

Question:

Peggy seeks your advice on the following matters:

(i)On 2^nd April 2021, Peggy was asked by Al to sign a contract with Tang Department Store for a special order of shoes to be delivered by 1 August.She signed a contract "for and on behalf of Shoemart Pty Ltd". It is now September and there still has not been any delivery.Peggy is worried that Tang will sue her for breach of the contract she signed. (3 marks)

(ii)Kelly found out that in June, Shoemart delivered shoes worth $10,000 to Metro Stores with payment to be made in August. Unfortunately, Metro went into liquidation in July. Upon looking further into the transaction, she found that Bud was asked by Peggy to be in charge of negotiating and entering into the contract. Bud agreed to allow Metro to pay in August, without checking Metro's creditworthiness. If he had, he would have found out that there was a winding-up petition on the ground of insolvency against Metro dated 20 May. Advise Peggy and Bud on Shoemart's chances of success against them under s180 of the Corporations Act. (6 marks)