200909 Enterprise Law Western Sydney University Kimberley Charles Sport N Surf Law A 2868234

200909: Enterprise Law- Western Sydney University- Kimberley & Charles- Sport n Surf- Law Assignment Help


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There are two parts to this exam and students must answer both parts.

Part A:

Elle runs a Bed & Breakfast house in the Southern Highlands in NSW. To give it acertain quaintness, Elle decides to install outside shutters to frame her windows. Elleorders the pine shutters, which are on sale in the local hardware store. Elle hires ahandyman to install the shutters. The instructions are contained in a bookletsupplied with the shutters. In very small writing appears the following statement:

These shutters are for decoration only and should not be installed where exposed to harsh weather conditions.

The handyman read this clause but did not say anything to Elle. After the shutters had been in place for several months, the wood appeared to be
splitting. Elle notices that some of the shutters are damaged but does nothing about them.

On a windy evening, one of the damaged shutters is blown from the window surrounds and hits Kimberley, a guest who was in the garden enjoying her onecigarette per day. Another shutter flies off and hits Charles, a member of the public, who is taking a short cut across Elle’s property having been caught out too long on abush walk.

Kimberley suffers bruising and cuts across her arm and shoulder and develops a phobia about wind, claiming she can no longer leave the security of her own home,and cannot work. Charles suffers a head injury and is off work for six months recovering.

Elle immediately removes all the shutters.Kimberley and Charles have advised that they intend to sue Elle in negligence.Advise Elle on the likelihood of those claims being successful, giving full legalreasons for your response.

Part B:

Jacob is interested in buying a small retail clothing business called ‘Sport ‘n Surf’ inCronulla. One Saturday, Jacob runs into two former school friends, Rose, who ownsa hairdressing salon in Cronulla and Geoff, who is a business broker specialising inmatching prospective business buyers with sellers in the hotel sector. Jacob tellsRose and Geoff that he is considering buying the business. Rose tells Jacob thatCronulla is booming and that the business is sure to do well, as everyone in Cronullasurfs and plays a sport of some description. Geoff, who is not an accountant, offers
to have a look at the books of the business and give Jacob his view. The books ofthe business have been prepared by Water Accounting Services, the business’ usualaccountants. Geoff inspects the books and tells Jacob that the business is doing welland that it made a profit of $120,000 last year. In fact, due to an error by WaterAccounting Services, the profit was reported as $120,000 when in fact it was$12,000. Geoff advises Jacob that based on the past profit disclosed in theaccounts and his own observations of the business, the purchase price sought by the sellers at $250,000 extremely reasonable.

Jacob bought the business for $250,000 and at the end of twelve months is verydisappointed to find that his profit was only $12,000. He learns from other businessbrokers that a reasonable purchase price for the business, even based on a profit of$120,000 would have been $200,000, but clearly less if based on a profit of $12,000.

Discuss whether Jacob may have been owed a duty of care on the above facts, and if so, by whom. Fully explain your answer.