Business Law  Paper

Question  3
David was the lead guitarist in the pop group Artic Elephants. On December 1, David emailed his best
friend  Frederick a well-known blind singer/songwriter. The email offered to sell Frederick his
valuable Stratocaster guitar for $5,000.
Frederick was travelling in China and while he could read emails using his brail converter, he could
not reply to them. On December 2, Frederick asked a Chinese maid who spoke little English if she
could help him send a postcard to David. On the back of a postcard the maid scribbled, ‘Stratocaster
–  me buy $50,000’. Frederick signed the card and sent it to David.
On December 5, Da vid was having a coffee and got talking to Matthew a sixteen year old jazz
musician who expressed interest in buying the Stratocaster for $4,000 cash. David agreed and gave
Matthew his home address so Matthew could collect the guitar next week. On December  7, David
received Frederick’s card and was elated with Frederick’s offer. When Matthew called next week for
the guitar David said he could keep his money, the guitar was not for sale.
Once Frederick returned from China, David contacted him regarding selling the guitar for $50,000.
Frederick laughed and said ‘sorry mate, that Chinese maid must have made a mistake translating
what I was saying and written one too many zeros on the postcard. Anyway, that Chinese trip cost
me a small fortune and I can’t afford to buy your guitar right now’.
The Artic Elephants planned to tour Australia, playing in every capital city. When they arrived in
Melbourne, as part of their tour they were booked to play six performances over five days with the
Melbourne Symphony Orchestra. A term of this contract was that the Artic Elephants were required
to be in Melbourne for rehearsals for at least three days before their first performance. Due to a
flight mix -up with Tigress Airways, the band only arrived one day before and had only  one rehearsal
with the orchestra.
Mr. Stickler, the manager of the Melbourne Symphony Orchestra Manager was livid and claimed the
band was in breach of contract. At the end of the Artic Elephant’s Melbourne engagement, the
Australian Government’s Departmen t of Air Transport suddenly ordered that all Tigress flights in
Australia were cancelled indefinitely because the airline had breached flight safety regulations. This
meant the Artic Elephants were unable to make an alternative airline booking in time to meet their
commitment to give four outdoor performances in Darwin. David hired a bus in Melbourne to
transport the band but an unexpected cyclone prevented all road, rail and air transport from
reaching Darwin and completely destroyed the city’s outdoor con cert venue. Consequently, Artic
Elephant’s Australian tour was not a sell- out success.
a)   Advise David, Frederick and Matthew regarding the sale of David’s Stratocaster guitar.
b)   Advise Mr. Stickler whether Artic Elephants was in breach of their contract with t he
Melbourne Symphony Orchestra.
c)   Advise Artic Elephants whether it would be liable for failure to meet their contract to
perform in Darwin and what the likely outcome might be.
(1200 words –  25 marks)