Something Worth

James Cook University Business Law CO5119 Practice Questions 1.Al operates a small business manufacturing specialist engine filters. In January he placed an advertisement in a car trade magazine stating that he would supply filters at $60 per filter, but would consider a reduction in the price for substantial orders. He received a letter from Bash Cars Ltd requesting his terms of supply for 1,000 filters. Al replied, offering to supply the filters at a cost of $50 each. Bash Cars plc responded to Al’s letter stating that they accepted his offer but that they would only pay $45 per filter. Al wrote back to Bash Cars Ltd stating that he would supply the filters but only at the original price of $50. When Al’s letter arrived, the purchasing director of Bash Cars Ltd did not notice the alteration of the price and ordered the 1,000 filters from Al, which he supplied. Analyse the situation from the perspective of contract law and in particular advise Al what price he is entitled to claim from Bash Cars Ltd.

2. Gertrude drives to work each day. She is in the habit of giving Hermione and Ivan a ride to work. At the outset of this arrangement, Hermione told Gertrude that she would pay her $200 per month towards the cost of petrol and vehicle maintenance. Hermione told Gertrude that, as it would be difficult for her to arrange an alternate method of transport, she would need a month’s notice if Gertrude could not take her. Ivan did not offer Gertrude any money for the journey, but at the end of the first month, told her that he would give her $85 for the inconvenience of calling by his house early in the morning. Jeremiah is Gertrude’s younger brother and he promises to keep the car clean and mechanically sound if she will give him a lift to school each day. Ivan fails to pay anything and Jeremiah never does clean or maintain the car Gertrude has to pay $40 a month for cleaning and maintenance. Six months later, Gertrude decides to begin cycling to work each day,