Sunday, 15 June 2014
Consideration
SHORT ANSWER ASSIGNMENT 1On the 25 May 2010 Jack Lumber Limited (JLL)
entered into a contract with lightwood Industries (LL) of the heights of
the hill to sell lumber planks 10 feet long at $100 each for the next
two years to LL (end 25thMay 2012). LL has another contract with
Deadbeat Homes to build kitchen cupboards at Deadbeat’s housing Site in
Paramin for which the lumber plank are used.JLL delivered over 1000
planks during 2010 and was paid the contract price by LL. However, in
January 2011 JLL announce a potential increase in the price of lumber
planks to $110 per plank and warned of further increases to come in
subsequent months.LL in February 2011 entered into another contract to
build cupboard for Strongback Housing Limited at their housing site in
Biche.In April 2011 JLL announce an official increase in prices to $120
per plank. At this point LL requested a meeting with JLL to discuss this
price increase and it effects on LL activities at it’s construction
site in Paramin and Biche. After the meeting JLL submitted a revised
contract with the new pricing arrangement.LL accepted deliveries of the
lumber planks from JLL which reflected the new pricing arrangement of
$120 but paid the initial contract sum of $100 per plank and as such LL
was in arrears to JLL.LL is adamant that they have a binding arrangement
with JLL for two years ending 25thMay 2012 to purchase lumber planks at
$100 and JLL subsequent contractual arrangement in April 2011 failed
for want of consideration.The Lawyers for LL has indicated that JLL is
already obligated to sell at $100 per plank before the new contractual
arrangement in April 2011 to sell at $120.lightwood Industries (LL) is
owned by Mr Lightwood your Father and he is aware that you are currently
pursuing Business Law and he sought you advice on the issue. Please
advised Mr Lightwood on the issue of consideration.
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