Reference no: EM133330862

Adam, an 81-year-old widower with painful arthritis, asked his son Timothy to come to Adelaide alone or with his partner Julies to spend some time with him while he was unwell. He offered to pay for their travel costs and cover their expenses while living with him.

Adam also told Timothy that he was expected to get better soon but would appreciate it if Timothy would consider staying longer to help him through the farming season. Adam has a large farm company, Adam Ranch Ltd., which employs at least fifty workers, some working full-time and others working part-time.

Timothy is a very successful skiing instructor in Alberta, working for one of Calgary's ski teams and his partner Julies is a famous dog trainer. When they came to Adelaide, Timothy told Adam they would be happy to help him for a couple of weeks and reassess the situation if Adam's health did not improve. Regrettably, Adam's health started deteriorating, and three weeks after Timothy arrived, Adam asked his son to consider staying longer with him. Timothy was reluctant, but Julies saw an opportunity. She was driving around and saw that land prices in the region and food prices were also rising. She encouraged Timothy to discuss some commercial arrangements with his father before committing.

When Timothy started a conversation with his father about some options, Adam said he would be happy if Timothy would consider working alongside him in Adam Ranch Ltd. Timothy talked again with Julies, who suggested that Timothy should agree to a permanent move to Adelaide but that he should request that his father transfers to him 80% of Adam Ranch Ltd in exchange for $100,000. Timothy wrote Julies's words into an agreement and asked his father to consider signing it. Adam thought about it for a couple of days, called his accountant to consult with him, and despite his accountant's reluctance, he signed the agreement with his son. Adam liked having his son around and was afraid that if he did not sign, Timothy and Julies would leave him, and Timothy would never come to visit again. However, Adam refused to take $100,000 from Timothy.

Adam was so frustrated that he could not write a one-page contract with Thomson, whom he wanted to hire to do custom seeding for the farm. So he asked Thomson to prepare the contract for him.

Concerned about the timely completion and quality of the work, Adam called Thomson five days before signing the contract and asked him whether he could seed approximately 2150 acres with durum within a month and whether he could use proper equipment made in Germany to do the seeding. Thomson responded that

"No problem. I will use German equipment to do the seeding". The contract was short, a standard model that Thomson had used in the past. It stipulated that the price set for the work was $38 per acre, and the payment must be made within five days from the time the contract was signed. One day before signing the contract, Adam got a letter from Thomson, which had the following information on the front side of the envelope:

"additional clauses''. The letter inside the envelope stated that "1. Thomson would not be responsible for loss or damage resulting from a reasonable adjustment of the work; 2. Thomson will not be responsible if the work is delayed because of a shortage of workers''. It needed to be clarified whether Adam opened the envelope and read the letter not. The last page of the contract also contained the same clauses. However, due to the illness and the effect of the sedative medicine he took the night before, Adam still needs to read the last several pages of the contract before signing it.

Three months passed, and Adam did not ask his accountant to change the ranch's ownership. Adam's arthritis worsened, and he could not supervise Thomson's work. In the first week, Thomson used German equipment. However, because of the contracts signed with many other farmers, Thomson needed more machines. As a result, he started using Chinese devices in the second week.

"Super Farmer 555" to do the seeding for Adam. These machines were imported from China and solely distributed in Australia by Farm Machines Ltd. It was also raining heavily during that time, and the Chinese devices could not work correctly in such a wet condition. On the second day, he was using the new machines, one of the drivers. Hugo was seriously shocked by electricity leaking from the engine. Hugo suffered severe injuries and had to be hospitalised for three months. The work thus ended up being lengthy (nearly two months) and sloppy. Adam knew that his crop would fail to do well. He was also disappointed in Timothy for not helping him out and monitoring Thomson's work more closely. Timothy had slipped into depression because Julies left him as soon as she won 3 million dollars on her lottery ticket.

With a heavy heart, Adam told his son that he should leave the ranch and look for another job while he looked for a professional manager for Adam Ranch Ltd.

Timothy left the ranch and returned to Alberta to seek a job as a ski instructor. He knew that since he had left the farm, the value of the land had increased by 15%, so he expected that the company's value, Adam Ranch Ltd., would have eased as well. Timothy was thus unhappy because his father still needed to transfer 80% of Adam Ranch Ltd to him.

Adam was also upset and did not want to give his son a part of his company. He was also furious when he learnt that the price that Thomson charged him for seeding was twice as high as the market price.

The written contract between Thomson and Farm Machines Ltd contained a clause specifying that "terms and conditions of this agreement must be read in conjunction with the description of "Super Farmer 555" machines on Farm Machines Ltd's website". The company's website had a product detail page to provide specific information about "Super Farmer 555" machines. At the bottom of the page, there was a statement in small print stating that Super Farmer 555" machines may not work correctly under heavy rain and Farm Machines Ltd will not be responsible for any injuries resulting from the use of the devices". This was different from what the sales staff assured Thomson before they signed the contract. During the negotiation, the sales staff repeatedly told Thomson that "Super Farmer 555" machines could work well under any weather condition". However, as Thomson was very busy doing the seeding for many farmers, he did not have time to check the information about "Super Farmer 555" on the company website.

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