Throughout 2019 the business was doing well and a major part of its commercial success was
due to Wing’s ideas and programming. A competitor, Jerry’s Computers, approached Wing and
offered him a large salary increase and a partnership position if he would leave Tom’s Computers
so as to start a new job in March 2020.
Wing discussed this with Tom who did not want to lose such a valued employee. Tom advised
Wing that, if he stayed, Tom from 1 July 2020 would double his salary and make him an equal
partner in Tom’s Computers. Wing stayed. In July 2020 Tom refused to increase Wing’s salary
and to make him a partner. They argued and Tom terminated Wing’s employment.
In November 2019 Wing, thinking of the promotion and the salary increase, decided to buy a new
computer and laser printer and scanner for $10,000 from Lies IT Pty Ltd whose advertising stated that
all products have a 12 months unconditional guarantee with a full refund if requested. The new
computer was defective and Lies IT Pty Ltd refused to repair the computer or to give Wing a refund.
In August 2020 Wing was anxious to obtain income and he decided to buy a business. He saw a
business for sale, Sydney Computers. Wing asked his accountant, Betty, to investigate the financial and
general trading background of the business. Betty completed the inquiries and advised Wing that the
business would be a good investment. Wing bought the business. Unfortunately Betty misread the
accounts of the business and made serious accounting errors. The business, Sydney Computers, failed
within three months of Wing’s purchase and closed down due to the very poor financial position of the
business before the purchase. Wing lost all monies invested in the purchase.
Provide the following answers to these questions using the IRAC structure and support your
analysis with case and statute references where appropriate.
PART A (20 marks)
1. (Maximum 600 words, 15 marks) How would a court determine whether there was an
enforceable agreement between Wing and Tom? You should support your analysis with case
references. Do not discuss statute.
2. (Maximum 250 words, 5 marks) What possible remedies could be granted if Wing was successful
in legal action for breach of contract against Tom? You should support your analysis with case
references. Only discuss common law and equity where relevant in the answer. Do not discuss