Learning Outcomes:-

• Apply the basic principles of the law of contract.
• Apply the basic principles of consumer law.
• Apply basic legal principles to common commercial law.

Question

• Kuiini enters into an agreement with Zadie Zane to buy icing sugar. Clause 3 of
  their contract states that Zadie will deliver five bags of icing sugar at 9 am on
  Monday morning. Clause 4 provides that each bag will weigh 10kg.

1. The bags are delivered on Monday morning, but at 10 am rather than 9 am. Kuiini says that this is a breach of contract and that she is canceling the contract. Apply all the elements of the relevant legal rules to determine whether Kuiini is entitled to cancel.
2. Now assume that, in addition to being late, Zadie does not deliver five bags of 10 kg each, but rather delivers ten bags of 5kg each. When Kuiini receives the icing late, she empties all the bags into one big container. She now wants to cancel the contract. Apply the relevant statutory provision to determine whether Kuiini is entitled to cancel the contract.
3. Assuming Kuiini was entitled to cancel the contract with Zadie, apply the relevant statutory provisions to advise Kuiini what she must do in order to cancel.

• In a separate matter, Kuiini enters into an agreement with Wingard Wines to provide cakes for a wine-launch Wingard is holding. Kuiini agrees to provide cakes that are shaped to look like wine bottles. She calculates that she will make a profit of $10,000 on the contract. In order to fulfill this contract, Kuiini contacts a mold manufacturer, Shan Sheld. Shan and Kuiini have worked together before and Shan is familiar with the type of work Kuiini does. Shan and Kuiini agree that Shan will make two cake tins shaped like Wingard Wine bottles. Shan delivers the tins as agreed. Unfortunately, they leak and the cakes come out looking nothing like wine bottles. Kuiini is unable to fulfill her contract with Wingard Wines.

1. Kuiini’s sister, Hannah, who is studying law, tells Kuiini that she should try to sell some of the cakes in her shop, as there is a legal principle that requires her to keep her damages low. Identify the principle Hannah is referring to and explain how it applies here.
2. Kuiini claims $9,500 from Shan. This is the profit she would have made off the contract with Wingard less the $500 that she managed to make by selling the cakes in her shop. Shan says that Kuiini can’t claim this much as she didn’t tell him that she would suffer such a big loss if the tins were defective. Name the legal principle Shan is referring to here and apply it to determine whether Kuiini can claim these losses.

• In a separate matter, Kuiini has a contract with Frank Flower to provide her with flour. She accepts that she owes Frank $500 under the contract but, because of her problems with Shan, she is unable to pay. Explain whether the $500 is damages or a debt.