You are to write a memo in relation to the scenario below.

In April, Epick Pty Ltd (Epick Games) completed making its first game, Grave Raider, an adventure based game where the main character Carla Loft explores tombs, solves puzzles and seeks treasure. The treasure can be used as in-game currency to purchase various weapons, upgrades and outfits for the character. The game is to launch on 1 June and is played via a subscription of $5.99 per month automatically debited from the player’s credit card.

The game is similar to the recent smash hit game Tomb Robber released by Kronos Games. Epick’s programmers had also worked on part of that game for Kronos under a subcontract between Epick and Kronos.

The monthly subscription agreement contains, amongst other things, the following terms:

1. Subscribers must join for a term of 12 months.

2. The subscription fee of $5.99 is automatically deducted from the subscriber’s credit card each month.

3. If there are insufficient funds for the subscription fee, a $30 non-payment fee will be charged and the balance of the remaining subscription amounts for the term will be due and payable immediately rather than taken each month.

4. Subscriptions can be cancelled in writing at any time as long as the subscriber pays the remaining subscription amounts upfront as a cancellation fee.

5. Any subscription that is not cancelled in writing by the subscriber within 30 days of the end of the subscription term, will automatically renew for a further term of 12 months.

In April, Marketing Manager Krystal Ball engaged local marketing firm Shout to promote the game and its launch on 1 June. Shout was to create and show a preview for the game on 31 adverts on television on Channel 9 during the month of May (one advert each day at 7pm). Epick would pay $155,000 ($5,000 per advert) on 1 June.

In April, Krystal also entered into a contract with Perth Transport to place posters (that Krystal had already provided to them) at 100 bus stop locations throughout the city. The contract stated that the posters would be put up on 1 May and taken down on 1 June. The cost was $100,000 ($1,000.00 per poster).

Finally, in April, Krystal put an advert on Epick’s Facebook page as follows:

The Most Anticipated Game Of The Year!

Coming June 1 – Grave Raider

From makers of the hit game Tomb Robber which scored 9.5/10 from GameSpot

Don’t Miss it. Sign up on 1 June.

Krystal’s intention was to refer to the fact that Epick’s programmers had worked on some of the Tomb Robber game for Kronos.

Unfortunately, on 30 April, there was a COVID-19 incident and the city went into immediate lockdown for the month of May. All public transport was cancelled for this period. Krystal immediately called Perth Transport to cancel the contract for the posters as there would be no commuters. Perth Transport said that they did not accept the cancellation and that they would put the posters up.

On 1 June the COVID restrictions were removed and CEO Sally Tate came to see you in your office with a few problems. He told you that:

• Perth Transport had issued an invoice for $100,000.00 for the posters.

• Shout had made a few mistakes with the TV adverts:- they had failed to book adverts on 20 and 25 May. They had also shown a few adverts at 7:05pm and not at 7pm. Shout had invoiced for the full $155,000 but Sally felt that Epick should not pay anything because of the errors.

• He wanted your views on the subscription terms.

• Quite a lot of customers had signed up for subscriptions and had already made complaints to Epick wanting their money back because they had been misled into thinking the game was made by Kronos.

Sally now wants your opinion as to the above he asks you to put this in a memo to him.

Your task is to write ONE memo to CEO Sally Tate, using separate headings for each question, explaining the relevant law or cases and applying these to answer the following questions:

1) With reference to the law about frustration, does Epick have to pay for the posters? 10 Marks

2) With reference to the law about performance, does Epick have to pay anything to Shout and, if so, how much? 10 Marks

3) With reference to the legislation on unfair contract terms, are any of the subscription terms unfair and, if so, how could they be amended? 10 Marks

4) With reference to legislation and cases on misleading and deceptive conduct, was the face book advert misleading or deceptive and, if so, what potential remedies might be imposed? 10 marks

Australian Based Law – Contract Law

• There is no set format for the memo/report but keep it simple, e.g. o TO:

o From:
o body of memo with headings o Signature

• Use headings for each question and separate areas of discussion with appropriate paragraphs.
• You may use a first person or third person writing style but be consistent.
• Use a 4-step approach for each question if you wish but this is not necessary as

long as you explain the law and key cases and apply these.

• You may wish to give an overall conclusion to all 4 questions at the end. You do NOT have to indicate the area of law for each question as these are given to you in the question.
• Whilst it is meant to be a business type document and you are communicating with someone who may not have knowledge about the law, your aim is to also explain the relevant law and key cases to the CEO in a way that he would understand before you tell him how it applies to each question above. Do NOT use point form writing.
• Do not write about any other area of law (even if it could be relevant) other than what is asked for in the questions.
• You will need to write concisely, research your materials and reference the memo using AGCL as you would any assignment.

Answer rating: 100% (QA)

MEMORANDUM TO CEO Sally Tate FROM DATE SUBJECT Questions Regarding Recent Advertising Contracts Dear Sally Thank you for coming to me with your questions I have summarized my findings below and provid... View the full answer