Santosh and Brian who also studied at Harvard approached you to ask if they could share the spare space in your office to see their own clients. Santosh and Brian both are qualified as Financial Adviser. Santosh and Brian initially paid rent to you but when the lease was renewed, you included them in the new lease for the office premises.
You renamed your office as ‘Friends Financial Services (FFS)’ and refurbished it at a total cost of $21,000. You, Santosh and Brian contributing equally. You also decided to pool the income from the whole operation and share the pool in the following way:
Santosh 35%,
Brian 25%
Yourself 40%
You and Santosh attend the office fulltime, but Brian attends the office only on Fridays, during the other weekdays he works from home as he has young family.

Over the first two years FFS did very well but for the past year following a renowned chain branded financial service provider setting up a branch close to your office, your business has declined. FFS has now an outstanding debt of $100,000 in the form of rent owed, outstanding utility bills and loans from a bank. You all are now seriously thinking to close down your business.

However, in the meantime you receive a letter from Jenny a client who expressed her disappointment about a delay in providing your professional services. She has also pointed out that while an advertisement of FFS promises to provide fast services by a team of three accountants, only one is a qualified accountant. Jenny has threatened to take legal action against the FFS.

Jing, another of your clients, shares with you that his elderly parents who migrated from China recently and have little English language skills borrowed money from the Super Money Lenders Pty Ltd without his knowledge. Jing thinks that Super Money Lenders has charged an exceptionally high interest on the loan and some terms are very unfair. Jing wants to know if the loan contract be avoided.

Also, Brian who mainly works from home recently sent an email to a local Electronics shop requesting they supply 3 computers and a printer worth $9,000. Brian has not received any reply yet.

Explain the most appropriate principle of contract law that Jing’s parents may rely on to challenge the validity of the loan contract? You are not expected to refer to any statutory law (legislation) in your answer.

Answer rating: 100% (QA)

Most contracts pose no problems they are usually a simple interchange of cash for goods But when contracts get more complicated they can and do go wrong This is less likely to occur when the parties u... View the full answer