Reference no: EM133229842

Question 1

Jen owns what she thinks is an original Dali painting and has it proudly displayed in her office. One of her clients sees the painting and offers Jen $50,000 for it. Before collecting the painting, the client has it valued for insurance purposes and is advised that the painting is not an original but a very good copy worth about $1,500. Advise Jen.

Question 2

Allan wants to sell his travel agency to Jane. He states that the agency has a turnover of $500,000 and shows Jane evidence that the turnover was over $450,000 not $500,000. Despite this, Jane purchases the agency on the faith of the statement made by Allan, but also because shethinks that she could do better. The contract of sale made no reference to the earning capacity of the business, but rather stated that the owner's representations were not to be regarded as binding unless expressly noted in the contract's special conditions. Some months after completion of the contract, Jane discovers that the business barely tuns over $250,000 and is unprofitable. Advise Jane of her rights, if any.

Question 3

Jeff runs Sunbury Sporting Goods, the leading sports store in Sunbury (an outer suburb of Melbourne, Victoria). He decides to sell the business and Fay, the local business sales agent introduces a prospective buyer, Jillian. When negotiating the contract, the issue of restraint arises. Jillian requests that the clause read that Jeff will trade in a similar bushiness for a period of five years within a 25 km radius of the business premises in Sunbury.

A year later, Jeff opens a new sporting goods business in another part of Melbourne 30 km distant from Sunbury.

Advise Jillian of the legality of the clause in the sale contract and whether she can restrain Jeff from continuing to trade in his new store.