BLAW204 Business Law - Individual Research Essay

ESSAY QUESTION (T121):

Q2 - 10 marks
On 1 January, Manor Inn Pty Ltd bought a house for the purpose of turning it into a luxury rental property. River Renovations Pty Ltd was hired to carry out all the building and construction work at a contract price of $300,000. During negotiation, Manor Inn made it clear that all building work had to be finished by the end of November of the same year, since it had already taken Christmas holiday reservations totalling $50,000 starting on 1 December.

Due to poor planning by River Renovations, only half of the repairs were completed on 30 November, and Manor Inn Pty Ltd was forced to cancel, and issue refunds for all its Christmas holiday bookings.. which in turn, caused Manor Inn to lose out on a business deal worth an estimated $750,000 with Tourism New South Wales. River Renovations Pty Ltd was not aware of this deal at the time it signed the contract.

Essay question: Is River Renovations Pty Ltd liable for either of Manor Inn Pty Ltd’s financial losses?
Required: Discuss whether the completion date was a condition in the contract, and if so, the likely consequences for this breach. Then, discuss whether River Renovations Pty Ltd should pay compensation for the cancelled reservations; and/ or, whether it should pay compensation for the loss of the deal with Tourism NSW. You must refer to law.

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