Snazzy Prints Pty Ltd (hereafter ‘Snazzy Prints’) is a factory producing jeans with snazzy prints....

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Snazzy Prints Pty Ltd (hereafter ‘Snazzy Prints’) is a factory producing jeans with snazzy prints. Its jeans are primarily sold to novelty clothes shops. It has recently engaged the services of Repair Expertz Pty Ltd (hereafter ‘Repair Expertz’), due to one of its machines (which had high production capabilities) having broken down. Snazzy Prints Pty informed the engineers at Repair Expertz that the machine had to be repaired and returned in a week’s time. Snazzy Prints did not inform the engineers that this was the only machine it had which could do special designs for the jeans. The specialist engineers at Repair Expertz were not available to repair the machine until four weeks later due to a breakdown of its key repair tool and informed Snazzy Prints of this three days before the expected delivery date of the machine. Snazzy Prints decided to terminate the contract at this stage. After a week of desperately looking around, Snazzy Prints discovered Vincenzo Machinz, a manufacturer of this machine and managed to hire the machine at a cost of $600 a day. Snazzy Prints was however, unable to source the newer version of the machine due to stock shortages of that machine.The machine was not as efficient as the one that Snazzy Prints normally used as it was an older version and consequently, Snazzy Prints was only able to manufacture (and therefore sell) half the quantity of jeans it was accustomed to selling. In the meantime, Snazzy Prints suffered $100,000 in lost revenue due to the reduced production capabilities of the new machine. Unknown to Repair Expertz, Snazzy Prints was further meant to sell its unique jeans to a television show called ‘Guess the Price’. Due to the slower production capabilities of this machine, Snazzy Prints has suffered a loss of $400,000 relating to the loss of the lucrative contract with this show. The jeans were meant to be delivered to the organisers of the television show during the period when Snazzy Prints was desperately searching for machines to hire but could not find one quickly. Please answer the following questions: a) Are the losses of $100,000 and $400,000 fully claimable in damages by Snazzy Prints as against Repair Expertz under contract law? Explain why.  (10 marks) b) Assume further for purposes of this part, that there were certain statements made about the efficiencies of the hired machine by Vincenzo Machinz before entry into the contract which turned out to be untrue, hence resulting in lower production. Advise Snazzy Prints whether they have any rights as against Vincenzo Machinz if these statements were not in the written hire contract that they signed. Advise on all possible arguments that could be raised. (5 marks)

Himanshu · Accepted Answer

a. Contract law regulates the validity of deals signed among two or more entities when there is a transaction of some kind expected to take place. Contracts are rendered in virtually all commercial deals. Instances of such business arrangements involve bills of sale, purchasing orders and job agreements. A business arrangement imposes such responsibilities which must be met by the parties to the agreement Lawfully, the inability of one side to satisfy all of its agreed commitments is known as a violation of the agreement or breach of contract. Depending on the particulars, a violation may arise if the entity fails to comply on schedule, failed to execute in compliance with the conditions of the arrangement or refuses to conduct at all.
Anticipatory violation happens when, before the output is expected the party either
It disregards or deactivates itself from executing the deal. In this scenario, we have two parties Snazzy Prints Pty Ltd (Snazzy prints is a factory producing jeans) and Repair Experts Pty Ltd. As we have analysed, that repair prints due to their recklessness could not make the task on time. Since there is a breach of the agreement as stated to have happened, Snazzy Prints may opt to enforce the contract under its terms or may seek to recover any financial damage arising from the alleged violation. Payment of damages: payment in one sort or another is the most frequent solution for a violation of the agreement. Snazzy prints can claim for liquidated damages, liquidated damages are particular penalties originally established by the parties to the contract in the case of a violation of the contract. Liquidated compensation should be a fair approximation of the possible losses that could arise from the violation (Lawwithshaheen, 2021)
b. Fraud includes and entails any of the below actions undertaken by a negotiating party or its collusion or its agent with a view to misleading or manipulating another party or its representative to enter into an arrangement.
· The suggestion, as a matter of truth, of what is not valid of someone who does not consider it to be true.
· Effective deception of a reality by a person who has awareness or conviction of the truth.
· A pledge made without the plan to make that occur.
· Any such behavior designed to deceive you.
· Any such act or absence are clearly declared by law to be fraudulent
The misled party has the choice of affirming the agreement and demanding that it be held in the role in which it might have been, if the statements were valid, or that it may cancel the agreement to the degree that it is not carried out. As Vincenzo Machinz made some claims about the productivity of the hired machine before entering into the deal, which proved out to be inaccurate culminating in lower production.

Snazzy Prints Pty Ltd (hereafter ‘Snazzy Prints’) is a factory producing jeans with snazzy prints. Its jeans are primarily sold to novelty clothes shops. It has recently engaged the services of Repair...

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