LAWS20058-Australian Commercial Law

Background Facts

Wing was a talented IT programmer employed by Tom and his business, Tom’s Computers. Throughout 2019 the business was doing well and a major part of its commercial success was due to Wing’s ideas and programming. A competitor, Jerry’s Computers, approached Wing and offered him a large salary increase and a partnership position if he would leave Tom’s Computers so as to start a new job in March 2020

Wing discussed this with Tom who did not want to lose such a valued employee. Tom advised Wing that, if he stayed, Tom from 1 July 2020 would double his salary and make him an equal partner in Tom’s Computers. Wing stayed. In July 2020 Tom refused to increase Wing’s salary and to make him a partner. They argued and Tom terminated Wing’s employment. 

In November 2019 Wing, thinking of the promotion and the salary increase, decided to buy a new computer and laser printer and scanner for $10,000 from Lies IT Pty Ltd whose advertising stated that all products have a 12 months unconditional guarantee with a full refund if requested. The new computer was defective and Lies IT Pty Ltd refused to repair the computer or to give Wing a refund

In August 2020 Wing was anxious to obtain income and he decided to buy a business. He saw a business for sale, Sydney Computers. Wing asked his accountant, Betty, to investigate the financial and general trading background of the business. Betty completed the inquiries and advised Wing that the business would be a good investment. Wing bought the business. Unfortunately Betty misread the accounts of the business and made serious accounting errors. The business, Sydney Computers, failed within three months of Wing’s purchase and closed down due to the very poor financial position of the business before the purchase. Wing lost all monies invested in the purchase. 

Provide the following answers to these questions using the IRAC structure and support your analysis with case and statute references where appropriate.

Part A

How would a court determine whether there was an enforceable agreement between Wing and Tom? You should support your analysis with case references. Do not discuss statute.

What possible remedies could be granted if Wing was successful in legal action for breach of contract against Tom? You should support your analysis with case references. Only discuss common law and equity where relevant in the answer. Do not discuss statute.

Part B

What action could Wing take against Lies IT Pty. Ltd under the Australian Consumer Law legislation? Include the issues of remedies and consumer guarantees in the analysis.

Part C

Explain whether Wing could take legal action in negligence against Betty for her advice about the business purchase based on common law and state legislation legal principles.