Reference no: EM1334400 , Length: 1000 Words
Lizzy owns and operates an award winning day spa called “Lizzybellas” in Blackstump, New South Wales. Lizzybellas has over several years established a reputation for providing beauty treatments and spa therapies in tranquil luxurious surroundings.
Lizzy decides to retire and sell the business to her employee, Rachel. After several months of negotiations with Rachel they finally come to an agreement regarding price. Lizzy and Rachel shake hands on the deal and record their informal agreement in writing as follows: “Lizzy, the vendor, hereby agrees to sell her day spa, Lizzybellas, together with the land, goodwill, stock, fixtures and fittings to Rachel, the purchaser, for the price of $1million, with completion of the sale to take place on 30 March, 2014. Lizzy and Rachel both sign the document signifying their agreement and get Zelda, another employee, to witness their signatures. Lizzy tells Rachel she will get her lawyer to send over a formal contract for Rachel to sign.
However, before Rachel receives the formal contract, two things happen. First, Rachel discovers from a client of Lizzybellas that a hairdresser, has recently opened a salon in a nearby suburb, called “Lizzy & Bellas” that offers hairdressing as well as beauty services in competition with Lizzybellas. The client erroneously thought that Lizzy had opened the new salon. Secondly, Hugh, a music teacher, purchases the shop next door to Lizzybellas, for use as a music studio. Unfortunately, the walls of the building are not sound proof and Hugh teaches drums. The sound of drumming from Hugh’s students is so loud that Lizzy is unable to hold a conversation with her clients. When Lizzy complains to Hugh he refuses to take any measures to reduce the noise. As a result Lizzybellas starts losing clients.
As a result of these things happening Rachel decides that she no longer wants to purchase Lizzybellas for $1million and tells Lizzy of her decision.
Advise Lizzy of her legal rights and possible remedies
Chapter 19 - Negligence
(Pentony, Graw, Parker & Whitford, Understanding Business Law, 6th edition, 2013, Chapter 25)
Chapter 20 - Property and Business Torts
(Pentony, Graw, Parker & Whitford, Understanding Business Law, 6th edition, 2013, Chapter 26)
Chapter 21 - Making the Contact: Offer and Acceptance
(Sweeney, O'Reilly & Coleman, Law in Commerce, 5th edition, 2013, Chapter 4)
Chapter 22 - Making the Contact: Intention and Consideration
(Sweeney, O'Reilly & Coleman, Law in Commerce, 5th edition, 2013, Chapter 5)