Oliver Bar & Bistro: Principles of Business & Corporations Law Research- Law Assignment Help

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TOA21
Law Assignment Help:

Required

In relation to the Research Hypothetical Question (below), you are required to provide the following information:
1. A summary of the key issues that are to be addressed in resolving Jack’s hypothetical legal problem.
2. A list of the law that is relevant to this problem – including full references to legislation and case law.
3. A brief summary of the relevant law. This means that you paraphrase the law in your own words, focussing on how that law might be relevant to the research problem.
4. A list of any further information you may need from Jack in order to apply the law to the above legal problem.

Your answer should also demonstrate your written skills through clear expression, use of sentence structure, correct grammar, spelling and punctuation.

Hypothetical Question

Mr Hardy is the owner of the Oliver Bar and Bistro. He also owns the Charlatan Liquor Store which is located in the Charlatan Shopping Centre. The shopping centre and liquor store are situated approximately 400 metres from the Bar and Bistro.

Mr Hardy is considering selling the Oliver Bar and Bistro so that he can pursue a full time career as a stand-up comedian. Mr Hardy appointed a real estate agent, Miss Busch, to arrange the sale for him. Miss Busch contacted Mr Laurel, a Canadian millionaire who was keen to invest in Australian property. Mr Laurel had very little experience in the hospitality industry, but he thought that the Oliver Bar and Bistro would be a good investment opportunity. Both Miss Busch and Mr Hardy were aware of Mr Laurel’s limited business experience, especially in regard to the running of a Bar and Bistro.

Miss Busch arranged for Mr Laurel to inspect the Oliver Bar and Bistro. On inspection, Mr Laurel was impressed with the Bar and Bistro’s facilities. He was even more impressed the Bar and Bistro’s financial records for the last three years. These financial records showed a consistent growth rate of 20% in liquor sales each year and a net profit of $500,000 for the previous financial year.

After the inspection, Miss Busch asked Mr Laurel to submit a written offer for the purchase of the Oliver Bar and Bistro. Mr Laurel submitted a written offer of $2,500,000, which included $350,000 for the purchase of the stock and $470,000 for the purchase of goodwill. A contract to purchase the business was prepared which contained the following clause:
Clause 2 – Restraint of Trade: The Vendor warrants that neither he nor his family members will carry on or be engaged in or interested in the business of a tavern, bar, bistro or bottle shop within a 10 kilometre radius of the Oliver Bar and Bistro for a period of 5 years from settlement of this contract.

Mr Hardy was concerned about the restraint of trade clause and telephoned Mr Laurel. Mr Hardy explained to Mr Laurel that he owned the Charlatan Liquor Store in the Charlatan Shopping Centre and explained that the liquor store would be within the 10 km radius of the Oliver Bar and Bistro. In a telephone conversation with Mr Laurel, Mr Hardy stated that he would not sign the document as the restraint of trade clause was going to be a problem for him. Mr Laurel replied that “he was not concerned about the Charlatan Liquor Store, that Mr Hardy should ignore the restraint of trade clause and don’t worry about it as Mr Laurel was a man of his word”.

Mr Hardy and Mr Laurel signed the standard form contract. No amendments were made to Clause 2 and there was no reference in the contract to the 20% growth rate in liquor sales for three consecutive years or the prior financial year’s net profit of $500,000.

Approximately ten months after the settlement of the purchase transaction for the Oliver Bar and Bistro, Mr Hardy decided to finance the purchase of a business known as the “Chaplin Tavern and Bottle Shop” (otherwise known as “Chaplin Tavern”) by his son Charlie. The Chaplin Tavern was within a radius of five kilometres from the Oliver Bar and Bistro.

Mr Laurel has now approached you for advice. He tells you that since Charlie commenced running the Chaplin Tavern, Mr Hardy has been actively encouraging patrons of the Oliver Bar and Bistro to eat and drink at the Chaplin Tavern. Mr Hardy’s actions have caused a noticeable decline in the number of persons eating at the Oliver Bar and Bistro. In addition, contrary to Mr Hardy’s representations prior to the sale, liquor sales had not consistently increased but had, in fact, fallen by 80% over the three year period prior to the sale. As a result, the Oliver Bar and Bistro is now likely to make a significant loss of $150,000 this year. Further investigations reveal that Mr Hardy significantly overstated the net profit figure made by the Oliver Bar and Bistro for the previous financial year and he had been aware of the falling sales.

Advise Mr Laurel as to his legal rights based on your understanding of the materials covered in Modules 1 and 2.

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Posted on : March 28th, 2018
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