The Tiwi Islands are a promising area of growth for the Northern Territory. A consortium designs a plan to build a bridge to the Tiwi Islands involving multiple stakeholders.

The Northern Territory Government (NTG) puts the bridge construction out to tender and among those tendering was a local business, Frontier Projects. To stay competitive with external and larger competition Frontier Projects decided to under-quote on the job, so as to just cover cost. Frontier Projects evaluates the deal including profit to $50M (million).

Twelve (12) months' later the government loses an election, and a political reshuffle occurs. This leads to a new Territory Government, and new people being put into place (Liberals). The new minister wins on the mandate to "Burn the Bridge".

At this stage Frontier Project has completed 50% of the bridge over Beagle Gulf including multiple stakeholders including architects, engineers, builders, and safety crews. It has currently spent over Four Million Dollars. It has also invested in an underwater land rover called "The Mudcrab" to lay the foundations for the bridge.

The Minister has contacted Frontier Projects and advises them that they intend on canceling the contract. As a newly recruited lawyer to the NT Government, they are seeking your advice as to:

You are asked to advise the NTG with respect to Australian contract law. It is not expected to focus on policies related to procurement.

Please advise:

1. Whether they can terminate the contract with Frontier Projects.
2. What remedies or damages will the NTG be liable for if they decide to cancel the project?
3. What other parties may bring an action for breach of contract based on the facts?

Answer rating: 100% (QA)

1 Whether they can terminate the contract with Frontier ProjectsUnder Australian contract law a part... View the full answer