Nola was the manager of a supermarket named Danny’s Supermarket…

Nola was the manager of a supermarket named Danny’s Supermarket…

Nola was the manager of a supermarket named Danny’s Supermarket which

was located in a large country town on the north coast of NSW. The store was named after the owner, Danny Doyle who lived in Sydney. On his frequent visits to the store Danny would discuss the purchase of replacement stock and sign the necessary orders for Nola to dispatch to the suppliers. As a rule sufficient stock was ordered during Danny’s visits so that Nola had no need to order further stock. Shortly after Danny’s visit in December, Karen, the sales manager of Annie’s Grocery Wholesalers Co Pty Ltd, called at the store and showed Nola the orders she had taken from a nearby supermarket with which Danny’s Supermarket was in direct competition. Nola was in a dilemma. Danny was overseas for the next two weeks and had left no forwarding address. Faced with the absence Danny and very worried about losing customers to his competitor, Nola placed an order for $40,000 worth of goods for the very profitable Easter trade. Three days later Nola took delivery of the goods and immediately placed them on sale. Unfortunately, the next day Danny had a large consignment of similar goods delivered to the store. In a note attached to the goods Danny apologised for not informing Nola of this consignment but said he had been busy with other retail business matters. On his return from overseas to Sydney, Danny was presented with an invoice for $40,000 for the goods supplied by Annie’s Grocery Wholesalers Co Pty Ltd to the north coast store. He immediately informed the company that he would not pay. In a letter to the company he said:” I will not pay because Nola the manager of my store had no authority to order those goods.” You are required to: Advise Annie’s Grocery Wholesalers Co Pty Ltd: 1. Of any legal rights they may have in order to obtain payment of $40,000 for the goods they delivered to Danny’s Supermarket (9 marks). 2. Would your advice differ if Danny informed you that Nola was expressly prohibited from ordering any goods without his authority? (4 marks). In your answer you are required to refer to relevant legal authority. Question 2 (12 marks) Adam Smith is a 60-year- old former alcoholic who owns the local hotel ‘Adams Bar’. He regularly attends meetings of the Alcoholics Anonymous organisation which are conducted by volunteer workers of the organisation. One of the volunteer workers is Coddo, a local business woman. She and her husband, Leech, often visit him at his room in the hotel when he has difficulties ‘keeping straight’, free from alcohol. During one of these visits Adam tells Coddo and Leech that he would like to free himself from the work and responsibilities of operating the hotel. He is continuing to operate the hotel as this is his only source of income. Adam, Coddo and Leech then discuss plans for Adam’s future financial security. After some discussion Coddo suggests to Adam that has the solution to his problem. She tells him that she knows of a company called Deallo Pty Ltd which specialises in the management of hotels. She says that she is confident that an agreement could be reached whereby the company would take over the management of the hotel for a modest fee and Adam would receive a monthly income Adam is very excited about this and is eager to obtain some security in the future and says he will go to Coddo’s office to sign the necessary paper work. Adam thanks Coddo and Leech and says he can trust them to do the best for him. The next day Adam signs the paperwork. While he is doing this, a solicitor acting for Coddo, Leech and Deallo Pty Ltd, explains the contents of the various documents. For about nine months after signing the documents Adam does not receive any income from Deallo Pty Ltd. The company will not answer his phone calls or emails and Coddo and Leech have refused to talk to him. He finds out from other sources that the only shareholders in the company are Coddo and Leech. Adam also discovers that the agreement provides for a term of 20 years, and that management fee is calculated at 20% of the gross takings of the hotel and that Adam is excluded from any management of the hotel. Adam is anxious to have the agreement set aside. He seeks your advice. Discuss fully the grounds on which Adam may rely in order to have the agreement set aside by the court. Refer to relevant legal authority in support of your answer.v