Law of Contract A
Practice Problem Questions 2
Question 1
In 2015 Caroline Oates decided to return to live with her ageing parents in the family home. Her
floristry business is booming and although Caroline still misses her husband, who had died 5 years
previously, she is living a happy and productive life raising her two sons. However, her parents were
getting on in years and needed some assistance with ordinary domestic life (shopping, cooking,
cleaning the house, etc), and with the maintenance of the family home in order to keep it liveable and
in good repair. Caroline worked out an arrangement with her parents. She would sell her house, and
she and the boys would move back to the family home to assist them. In return, her parents would pay
her half the value of their house when the time came for them to sell it and move into suitable
‘seniors’ serviced accommodation in a few years’ time. Caroline sold her house and moved into her
parents’ home. For 4 years Caroline, her sons and her parents lived happily with this arrangement.
Caroline did most of the shopping, cooking and cleaning, and paid for the maintenance on the house
because she knew her parents couldn’t afford it.
In 2019, her parents decided it was time for them to move into an aged care residence. They
approached Wollongong Seniors Residence Pty Ltd, and were told that the minimum entry price for
the accommodation and service they needed was $500,000. This was well over half the value of their
house, which they sold for $700,000. Her parents pay the fee to Wollongong Seniors Residence, and
offer Caroline $50,000 from the proceeds of the house. Caroline was relying on receiving half the
value of the house to be able to afford a new home for herself and her sons.
Unfortunately, Caroline also faces difficulties with her business. The intense heat and smoke from the
summer bushfires wreak havoc on the flower-growing industry, and she is unable to source quality
flowers to either keep up with demand, or to maintain the high profit she usually enjoyed. She
approaches her landlord, Simon, and asks for a rental reduction until the flower industry recovers and
she can build her business back up again. Simon readily agrees to reduce her rent from $1500 to $750
per month. Caroline has been a tenant for a long time, and he knows that her business draws
customers to the Balgownie neighbourhood shops.
Relieved at the rental reduction, Caroline begins the search for a new flower supplier. She approaches
South East Blooms Pty Limited, who offer to supply her with 300 flowers a week if she will pay them
$1500 per week, and makes a $200 per month donation to Greenpeace. Caroline thinks this is a
reasonable deal and signs a contract that says ‘South East Blooms will supply Caroline with 300
flowers per week, based on the selection available at the market from time to time’. Caroline is happy
with the first month of deliveries from South East Blooms, but then finds that the stock becomes
repetitive. She calls South East Blooms to complain, but is told that they what they are doing is within
the scope of the contract. Caroline disagrees and stops paying the monthly donation to Greenpeace.
Six months later, Simon finds himself in financial distress and demands Caroline pays full rent, plus
arrears. Greenpeace have also been notified of the donation by South East Blooms and send Caroline
a letter demanding the money.
Explain the contractual rights and responsibilities of Caroline and the other parties to these dealings.
Make sure that you identify the relevant authorities for the legal principles upon which you rely.
Question 2
Practice Problem Questions 2
Question 1
In 2015 Caroline Oates decided to return to live with her ageing parents in the family home. Her
floristry business is booming and although Caroline still misses her husband, who had died 5 years
previously, she is living a happy and productive life raising her two sons. However, her parents were
getting on in years and needed some assistance with ordinary domestic life (shopping, cooking,
cleaning the house, etc), and with the maintenance of the family home in order to keep it liveable and
in good repair. Caroline worked out an arrangement with her parents. She would sell her house, and
she and the boys would move back to the family home to assist them. In return, her parents would pay
her half the value of their house when the time came for them to sell it and move into suitable
‘seniors’ serviced accommodation in a few years’ time. Caroline sold her house and moved into her
parents’ home. For 4 years Caroline, her sons and her parents lived happily with this arrangement.
Caroline did most of the shopping, cooking and cleaning, and paid for the maintenance on the house
because she knew her parents couldn’t afford it.
In 2019, her parents decided it was time for them to move into an aged care residence. They
approached Wollongong Seniors Residence Pty Ltd, and were told that the minimum entry price for
the accommodation and service they needed was $500,000. This was well over half the value of their
house, which they sold for $700,000. Her parents pay the fee to Wollongong Seniors Residence, and
offer Caroline $50,000 from the proceeds of the house. Caroline was relying on receiving half the
value of the house to be able to afford a new home for herself and her sons.
Unfortunately, Caroline also faces difficulties with her business. The intense heat and smoke from the
summer bushfires wreak havoc on the flower-growing industry, and she is unable to source quality
flowers to either keep up with demand, or to maintain the high profit she usually enjoyed. She
approaches her landlord, Simon, and asks for a rental reduction until the flower industry recovers and
she can build her business back up again. Simon readily agrees to reduce her rent from $1500 to $750
per month. Caroline has been a tenant for a long time, and he knows that her business draws
customers to the Balgownie neighbourhood shops.
Relieved at the rental reduction, Caroline begins the search for a new flower supplier. She approaches
South East Blooms Pty Limited, who offer to supply her with 300 flowers a week if she will pay them
$1500 per week, and makes a $200 per month donation to Greenpeace. Caroline thinks this is a
reasonable deal and signs a contract that says ‘South East Blooms will supply Caroline with 300
flowers per week, based on the selection available at the market from time to time’. Caroline is happy
with the first month of deliveries from South East Blooms, but then finds that the stock becomes
repetitive. She calls South East Blooms to complain, but is told that they what they are doing is within
the scope of the contract. Caroline disagrees and stops paying the monthly donation to Greenpeace.
Six months later, Simon finds himself in financial distress and demands Caroline pays full rent, plus
arrears. Greenpeace have also been notified of the donation by South East Blooms and send Caroline
a letter demanding the money.
Explain the contractual rights and responsibilities of Caroline and the other parties to these dealings.
Make sure that you identify the relevant authorities for the legal principles upon which you rely.
Question 2
