Reference no: EM131763236

Question: Tilly is a sole trader who runs a motor repair business. Recently her premises had experienced some plumbing problems and she has had to engage a plumber, Peter Plumber, to replace various pipes and equipment. After some discussion they both signed a contract for the completed work for $7, 500 to be paid within 30 days of the work being completed. Peter completed the work and Tilly agreed it was done as required. However after 29 days no payment was made by Tilly. Realising she could not pay the full amount as agreed, Tilly phoned and spoke to Peter. Tilly told him she was experiencing some cash flow problems and asked if she could pay $6,000 the next day but not the balance of $1, 500. She asked if instead of paying cash she could provide him with a service.

She offered to carry out some work on his business van if he needed it in the next few months. Peter thought about it and agreed and the next day Tilly paid $6,000. One week later. Peter decided that this was not a good deal for him and he thinks he should have insisted on Tilly paying the full cash amount owing. He wants to know if he can contact Tilly and cancel the deal for work on his van and insist on her paying the remaining $1, 500. Using cases to support your reasons, discuss whether Peter can legally insist on the balance of the debt and how Tilly could respond if he does.