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Case Study: Frans Flowers grows flower blooms, which in 2019 it agreed to supply for 10 years to a local florist shop, Ace Florist Ltd. Ace Florist Ltd is one of Frans Flowers' best customers. Two years ago, Leo, the Manager of Ace Florist Ltd, asked Frans Flowers to enter a separate contract with Ace Florist's new subsidiary, Wild Blooms Ltd, which was being set up in a nearby town. However, Leo states, that the prices paid under the contract with Wild Blooms Ltd must be reduced by 30% from the usual prices charged by Frans Flowers because Wild Blooms was a new business. Leo also tells Frans Flowers that Ace Florist Ltd will terminate its contract with Frans Flowers unless they agree to the contract with Wild Blooms.Even though the prices to be paid by Wild Blooms Ltd will mean that Frans Flowers will make a loss on the deal, Frans Flowers agrees to the terms and supplies flowers to both Ace Florist Ltd and Wild Blooms Ltd.Ace Florist has now gone into liquidation and the liquidator has terminated its contract with Frans Flowers. Frans Flowers now wants to pull out of the contract with Wild Blooms that was entered into two years ago.
REQUIRED:
Explain the relevant law in New Zealand to Frans Flowers and advise them of their legal situation. It is recommended that you use legal problem-solving method (ILAC) to answer this question.
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