Reference no: EM133559305

Question 1: Business Entities

Vanessa and Peter decide to go into business together following the completion of their studies at university. After extensive market research they write up a business plan for an online florist to be named Fusion Flowers.

Peter has recently inherited $50,000.00 which he contributes as start-up capital. Vanessa doesn't have any savings but contributes her van, tools and other equipment. They agree to lease a small warehouse space from which to operate the business.

The pair agree that Peter will pick up the flowers each day from the Flemington Markets while Vanessa will manage all customer enquiries, and both will undertake deliveries. Profits will be split 50:50.

After the first two weeks of operations, they are struggling to keep up with the orders and decide to hire Matthew to take care of deliveries. Over the next month the following events unfold:

a) WithoutaskingVanessa,Peterorderssomeveryrare(andexpensive) orchids from Ooh Orchids believing that he would be able to sell them, however, Vanessa says she never would have agreed to this if she had been asked. Ooh Orchids has demanded payment of the outstanding invoice of $1,500 from Vanessa.

b) While delivering some flowers the delivery driver gets caught in heavy traffic. Under pressure from Vanessa to get the flowers delivered on time to "a very important customer", Matthew is speeding and crashes into a car stopped at a roundabout. Nobody is injured and the flower van is protected by a bar at the front, however, there is $5,000 of damage caused to the other driver's car.

c) WithoutconsultingPeter,Vanessastartedaseparatebusinessselling flowers specifically for weddings. So far Fusion Flowers haven't been supplying flowers to events as it would increase their insurance costs, however, Vanessa and Peter have previously discussed the lucrative nature of supplying the wedding industry.

Discuss Vanessa's potential liability. Support your response with relevant case authorities. Based on NSW law and providing wsu and put rules into the essay.

Remember: What business entity exists and each parties' obligations. Students MUST use the IRAC method (Issue, Rules, Application, Conclusion) to answer.

Question 2: Contracts

Scarlett decides to sell her yellow Toyota Corolla 2010 model for $3000. She also owns a blue 2015 Toyota Corolla which is worth $18,000.

Scarlett and her cat Terry love to go for drives and sit together in the car, look at the sea whilst eating fish and chips. The beach is about 15 minutes from their home. They always take the blue Corolla when they go on these adventures.

On Saturday, 5 August 2023 they head off together for their usual outing. They arrive at the beach and Scarlett parks the car and Terry stays in the car looking at the waves.

Scarlett heads into the Fish and Chip shop to order their lunch. She sees her friend Vangelis and tells him that she is selling her Toyota Corolla for $3000. He says, "are you making me an offer?". She replies "yes".

Vangelis is thinking what a bargain this is and exclaims "I accept. I will come on Monday afternoon and collect the car and bring the cash." They agree.

Whilst Scarlett is buying lunch Terry presses the window button and it opens. She leaps out of the car and goes exploring. Scarlett comes back to the car with the lunch and Terry is missing. She is frantic. She spends an hour looking for Terry but cannot find her. She calls her good friend Maria who then prints 50 posters with a photo of Terry (Scarlett sends her a photo of Terry every day).

Maria drives to the beach and they put the "Missing cat" posters on lots of poles and shop windows (refer to the poster on the right).

Meanwhile Terry has decided to walk home. It is getting dark on the Saturday evening and Terry is cold and a young lady named Jaya sees Terry and offers her a warm meal and a place to sleep in front of the fire. Terry stays 2 days. She realises Terry has a collar with a phone number on it.

On Monday morning (7 August) Jaya rings the phone number and Scarlett answers. Jaya explains that Terry is with her. They arrange for Jaya to drive Terry over to Scarlett's home later that day.

On Monday afternoon Scarlett is at home and Jaya arrives with Terry. She thanks her profusely. Scarlett is about to get her wallet to give Jaya the reward but realises Jaya knows nothing about the reward. She does not pay her but gives her a box of chocolates as a thank you and Jaya departs.

Vangelis arrives and Maria remembers she is selling the car to him. She gets the keys to the yellow Corolla and hands them to him for a test drive. He walks to the blue Corolla and yells out "hey Scarlett, the key won't unlock the door". Maria answers "you are buying the yellow Corolla". Vangelis says "no, we agreed that I am buying the blue one". Vangelis hands Scarlett the key and leaves very upset.

On Monday evening Jaya is walking along the beach when she sees a poster for the missing cat "Terry" she rescued and fed. She notices the reward of $750. She immediately rings Scarlett who refuses to pay.

Scarlett comes to see you for legal advice as to whether she has a contract with either Jaya or with Vangelis.