COMMERCIAL AND CORPORATIONS LAW(Chapter- contract law)

Nick is the leader of a newly formed political party called ‘the Blue Party’. He organises an open-air rally in Sydney to publicise the party.

Nick contracts with John for him to provide catering facilities at the rally at a cost of $5,000.

Hanson, a committed support of Nick, agrees to fly an aircraft over the rally trailing a banner showing the party’s emblem. Hanson says he will provide the services free of charge.

Ian, a prominent sympathiser of Nick’s political program, writes to Nick saying that he ‘hopes the rally will be the first step towards putting some backbone into the country’ and that, accordingly, he will provide $10,000 ‘to help with expenses’.

Nick is determined that the rally should be successful and, at the last minute, he agrees to pay John ‘a bonus of $1,000 to ensure that things run smoothly’. Similarly, fearing trouble from radical opponents of his political party, he asks police authorities for additional protection for which he agrees to pay $3,000.

The rally is a success but Nick refuses to pay the $1,000 bonus to John and the $3,000 to the police. Hanson finds that his anticipated costs were far more than anticipated and Nick agrees ‘to reimburse him fully in due course’. Ian informs Nick that he cannot pay the $10,000 as his business has suffered a dramatic and sudden decline in profitability. As a result Nick refuses to reimburse Hanson and the police.

Discuss the contractual claims (if any) that exists between: (a) Nick and John

(b) Nick and the police

(c) Nick and Hanson

(d) Nick and Ian