Reference no: EM132340899 , Length: word count:1000

Legal Aspects of Contracts Administration - Problem Solving Assignment

Scenario -

Sofia is the managing director of EcoCoffee Ltd (Eco), a Sydney company which imports coffee beans from Peru. Eco processes the beans into pure ground coffee and supplies the coffee under the brand name of EcoPure to a large number of Sydney cafes which pride themselves on offering high quality coffee.

To promote EcoPure Sofia takes out advertisements on commercial television stations and in newspapers. The advertisements contain information as follows:

'EcoPure is the best coffee in the world and is made from Peruvian plantations where no chemicals or other artificial contaminants are used in the soil or spayed on the coffee trees.

The lifestyle of the villagers who harvest the beans has been considerably improved with our donations to schools and our ensuring that the workers are paid above award rates compared to villagers who work in other plantations.

The environment of native Peru forests has not been harmed as no new plantations have been built to harvest our coffee beans.

At the time of arranging the advertisements, Sofia was aware that:

• Chemicals had been used to fertilise the soil with the result of many workers falling ill.
• Donations which were meant for schools had been stolen by corrupt Peruvian government officials.
• Workers were paid below award rates leaving them with a bare minimum wage on which to survive.
• Forests had been cleared to increase the size of the plantation. A photo of a lush tropical forest with the rare Lady Ga Ga parrot was displayed in the ads. Environmentalists had warned that the parrot was in danger of extinction because of the encroaching of the plantation into the forest area.

Diego owns a successful Sydney CBD café with a reputation for serving environmentally sustainable coffee. He has signed a three-year contract to be supplied exclusively with EcoPure coffee. Amongst his customers are a number of prominent NSW politicians and senior public servants who frequent the restaurant because it is consistent with their policies of encouraging businesses to adopt corporate social responsibility. Just before signing the contract Diego said to Sofia:

I assume the statements in the advertisements about the coffee bean harvesting in Peru are true. My cafe's reputation is built on its commitment to corporate social responsibility and environmentally sustainable principles.

Sofia just smiled and shook Diego's hand following which Diego signed the contract.

Shortly after Diego signed the contract, an investigative journalist revealed on national television that Eco had exploited Peruvian workers, not only in underpaying them but in exposing them to dangerous chemicals. The journalist also produced a report by an international bird expert that the Lady Ga Ga parrot is in danger of extinction because of the forest clearing.

Following the journalist's report Diego is concerned about the damage to his café's reputation. When Diego tells Sofia he wants to end the contract, Sofia insists Diego must continue with the contract. In doing so Sofia argues that Diego has signed the contract and that the contract has no clauses about the claims made in the advertisements.

Question 1 (1000 words) - Discuss, in a problem- solving format, whether Diego is legally entitled to end the contract with Eco.

Your answer should be based on the common law of contract, specifically terms (contents) of a contract

Question 2 (1000 words) - Discuss, in essay style, what section or sections of the Australian Consumer Law may have been breached by Eco. Explain some of the legal, ethical and business implications for Eco (and Sofia) should a court find these sections of the ACL have been breached.

Instructions -

Question 1 is to be answered on the common law of contract. The particular aspect of contract law is terms (contents) of a contract. A problem- -solving format should be used. Question 2 is to be answered on the Australian Consumer Law (in the schedule to the Competition and Consumer Act 2010 Cth). Essay style should be used.

Assignment length: 2000 words (excluding in-text referencing and the reference list).

I need help with Question 1 only.

Attachment:- Assignment File - Contracts Administration.rar