You must write an answer to the problem-type question below, using the ILAC (Issues, Law, Application, Conclusion) format, a worked example of which is in the Resources folder.
**In this subject, assignments are marked on-line, using an adapted MS Word programme. You therefore MUST submit your assignment in Word format, NOT as a PDF document. If you submit in PDF it will not be able to be marked.**
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The 1 000 word limit is firm- assignments with greater than 1 000 words will lose 1 mark for excessive length. I would however expect that students should be able to answer the question in far less than 1 000 words. Your bibliography is not included in the word limit but in-text references are.
Dundee Coal Mines Pty Ltd (Dundee) mines coal sells it to a number of customers. Paul, its Managing Director, contacts you one day and relates the following facts. You should assume that any contracts mentioned in the facts were entered into in New South Wales.
Dundee needed a new drill for its mining operations. It entered into negotiations with a drill manufacturer, Aussie Drills Pty Ltd, during which Dundee’s executives presented Aussie Drill’s chief engineer, Bob, with a sample of a particularly hard type of rock that Dundee would need to drill through. Bob said that the SR71 drill would be able to penetrate the rock. Dundee signed a contract to purchase an SR71 drill for $ 250 000. The drill was delivered on time. It had been used for only a few weeks before it broke because it was unable to get through the rock. It transpired that Bob had been careless in analysing the rock sample, and should have recommended the more powerful SR72 drill. Dundee lost $ 200 000 in profit while the drill was out of action.
On 2 January Dundee sent an email to NSW Power Ltd offering to sell NSW Power a million tonnes of coal at $ 70 per tonne. NSW Power responded by sending an email on 4 January saying that it would accept the offer but at a price of $ 69 per tonne. The executives at Dundee did not respond to NSW Power. On 6 January Dundee received an email from NSW Power stating that they accepted the $ 70 per tonne contract offered on 2 January. Dundee did not respond to that email either, and has now received a letter from NSW Power’s lawyers demanding that Dundee perform under the contract.
In February, executives from Adelaide Steel Mills Ltd visit Dundee’s head office in Newcastle, NSW, and sign a contract to purchase 40 000 tonnes of coal at $ 73 per tonne, with delivery scheduled for May. In March, the South Australian Parliament passes the Climate Change Act 2020 (SA), s 5 of which prohibits the bringing of coal into the state. Adelaide Steel Mills has now refused to pay for the coal and says that Dundee should not attempt to send it to them, but Paul tells you that his view is that ‘A contract is a contract.’ He also points out that Dundee has already spent $ 3 000 in setting aside the coal destined for Adelaide Steel Mills.
Dundee entered into a contract with Truck Hire Ltd to hire 12 trucks for 180 days during winter when demand for coal is at its highest. Under the contract, the trucks are due to be delivered on 1 May. Eleven of the trucks are delivered that day, but the final truck is delivered three days late and Dundee loses $ 5 000 in profits. Paul says that Dundee wants to terminate the contract.
Advise Paul as to what the legal position of Dundee Coal Mines Pty Ltd is in relation to these facts, citing relevant legal authority.
In answering this question, you should restrict your research to the law covered in Topics 5-8 only.
As with all problem-type questions, you should assume that all facts alleged are true and are provable in court.
** Please check that you have complied with all the points in the Style Guide (which appears after the marking rubric) before handing in your assignment.**
Online submission via Turnitin is required for this assignment. Details will be provided by your subject lecturer.
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