IRAC approach - identify the issue, the rule, application and conclusion

Question 1  Citation and following instructions (2 marks)

Two marks total for all questions will be allocated to: 

• Proper form of citation; and
• Following exam instructions in respect of formatting,

 Question 1 (500 words / 12 marks)

This question incorporates: 

• The Background Facts and Attachments from the Written
• The additional facts provided in this

 Additional facts

Will’s rehabilitation has been a great success. He is invigorated by his newfound hope for the future and has not been tempted to return to his destructive habits. He is motivated to continue his path to success and stability.

Assume that Will and Joyce signed and exchanged contracts for the Investment Property, and that it formed and became legally binding on Friday 15 April 2022 (‘the Investment Property Contract’). The Investment Property Contract, therefore, was due to settle1 on Friday 29 April 2022.

On Saturday 16 April 2022, Will went out with his friends – Mike, Lucas, and Dustin – to celebrate at the local night club, ‘Upside Down’. Will knew that his friends liked to party hard, but he was committed not to drink alcohol or take illegal drugs per the terms of the Investment Property Contract. He purchased his own water and soft drinks through the night.

At 1:00am on Sunday 17 April 2022, Will went to the toilet. His friends decided to ‘surprise’ him by adding some illegal GHB2 to his soft drink. Will returned from the toilet and quickly consumed his drink, unaware that it had been spiked. Within 10 minutes Will felt high and heavily intoxicated. In this state, his addictions took control, and he happily accepted a ‘top up’ of GHB when his friends offered him more an hour later.

 1 ‘Settlement’ is when Will pays the $50 and Joyce formally transfers title to the land to Will.

2 Gamma hydroxybutyrate. A depressant that can cause feelings of euphoria and disinhibition.

Will returned home at 9am. Joyce was there when he arrived, and she was horrified to see that Will was ‘off his face.’3 Will confessed to what had happened.

Joyce argues that Will has breached cl 1.1.3 of Annexure A to the Investment Property Contract because he ‘took’ an illegal drug merely by ingesting it. Will argues that when properly construed, he did not ‘take’ an illegal drug and breach cl 1.1.3, because his experience in the early hours of Sunday 17 April was ‘not my fault’.

Apply the leading case(s) on the construction of written commercial contracts and express your view on which party’s construction of cl 1.1.3 is correct.

For this question assume that Will’s promise not to take illegal drugs is legal, enforceable, and good consideration.

Question 2 3 Heavily intoxicated.

This question builds on Question 1. It therefore incorporates: 

• The Background Facts and Attachments from the Written Assessment; and
• The additional facts provided in both Question 1 and this

 Additional facts

Assume that Joyce’s interpretation of cl 1.1.3 of Annexure A to the Investment Property Contract is incorrect. Therefore, Will did not breach it in the early hours of Sunday 17 April 2022. He has always performed it properly.

However, Joyce refuses to listen to any contrary opinions about cl 1.1.3. She continues to insist that Will breached the Investment Property Contract and is refusing to settle on the appointed date of Friday 29 April 2022. (Time is not of the essence.)

It is Thursday 28 April 2022 – the day before settlement. Will seeks your advice on whether he can terminate the Investment Property Contract because of his mother’s conduct. Answer the following questions:

1. Can Will terminate today?
2. Assuming that Joyce’s conduct gives Will a prima facie right to terminate today, could he elect to do so?

Question 3 This question provides for an alternate scenario to Questions 1 and 2. The additional facts in those questions are not relevant to this one. This question therefore incorporates only:

• The Background Facts and Attachments from the Written
• The additional facts provided in this
• Additional facts

Will’s rehabilitation has been a great success. He is invigorated by his newfound hope for the future and has not been tempted to return to his destructive habits. He is motivated to continue his path to success and stability.

Assume that Will and Joyce signed and exchanged contracts for the Investment Property, and that it formed and became legally binding on Friday 15 April 2022 (‘the Investment Property Contract’). The Investment Property Contract, therefore, was due to settle4 on Friday 29 April 2022.

On Saturday 16 April, Will went out with his friends – Mike, Lucas, and Dustin – to celebrate at the local pub. Will was committed not to drink alcohol. However, his

friends convinced him to have ‘one last beer with us to mourn the end of the party days and celebrate your new house.’ Will was very reluctant. Apart from anything else, he did not want to disrespect his mother’s wishes and kindness. Nonetheless, his friends persuaded him to have one last ‘cheeky bevvy.’5

Mike purchased a round of schooners of beer. They all toasted Will and drank them. Will found that he really did not enjoy the taste anymore. If anything, it reinforced that he had made the correct decision about committing to sobriety. He drank half of the beer and then declared that he did not want to finish the rest.

Unfortunately, at that moment, Joyce entered the pub and saw Will with the beer in his hand. Both parties were mortified.

 4 ‘Settlement’ is when Will pays the $50 and Joyce formally transfers title to the land to Will.

5 ‘bevvy’ is an abbreviation of ‘beverage.’ ie, a drink.

Will has breached cl 1.1.3 of Annexure A to the Investment Property Contract by drinking alcohol. Joyce wishes to terminate it because of Will’s breach. Will denies that the breach gives Joyce the right to terminate. Answer the following questions:

1. Can Joyce terminate the Investment Property Contract for Will’s breach? Identify what each party would argue in support of their positions on the issue. You can assume that the term is not a Do not discuss repudiation.
2. If Joyce terminates, then what is the effect of the termination on the Investment Property Contract? (Address this question briefly in a couple of )

You do not have to discuss the doctrine of election, just whether Joyce has the prima facie right to terminate.

Question 4 (500 words / 12 marks)

This question provides for an alternate scenario to Questions 1, 2 and 3. The additional facts in those questions are irrelevant to this one. This question therefore incorporates only:

• The Background Facts and Attachments from the Written
• The additional facts provided in this Additional facts

Will has always respected his older brother, Jonathan. Jonathan was always bright, hard-working and responsible. While the siblings were young, Will always followed Jonathan’s lead.

As Will went through high school, Will realised that Jonathan was not perfect. Will started to challenge Jonathan when Will thought that Jonathan was wrong and did not always follow Jonathan’s advice without thinking about it. When Will spiralled out of control, the brothers’ relationship cooled but Will still highly valued Jonathan’s opinions.

Will was thrilled to work for Jonathan under the training contract (the ‘Training Contract’) with Hawkins Electrical. Things went well from when he commenced working in January 2022 until the beginning of April 2022.

On Monday 11 April 2022, Will negligently damaged a client’s property. The negligent act was due to Will’s overconfidence and inexperience. It was serious enough that Jonathan had the legal right to terminate the Training Contract.

Jonathan was furious and said that he would have to think about Will’s future at Hawkins Electrical.

On Friday 15 April 2022, Will and Joyce signed and exchanged contracts for the Investment Property (‘the Investment Property Contract’). The Investment Property Contract formed on that date and, therefore was due to settle6 on Friday 29 April 2022.

Jonathan was upset when he heard about the Investment Property Contract. He wondered why Joyce was rewarding Will when he had caused so much heartache to 6 ‘Settlement’ is when Will pays the $50 and Joyce formally transfers title to the land to Will.the family, but was not as generous with Jonathan, who supported her through Will’s destructive period.

Jonathan confronted Will about the Investment Property Contract. He demanded that Will grant an option to Jonathan, which would allow Jonathan to purchase the Investment Property from Will for $75,000 when Will became the owner. Jonathan said that if Will did not grant the option, then Jonathan would terminate the Training Contract because of Will’s negligence. That would mean that Will would have breached the Investment Property Contract.

Will was shocked by Jonathan’s proposal. He felt hurt but also felt extremely guilty, and that he deserved it after what he had done. He realised that it was a terrible deal but did not think he had much choice. He also did not want to disappoint Joyce by being fired from Hawkins Electrical.

Will signed the option over the Investment Property in favour of Jonathan, which contained a copy of the contract for sale that would become binding when Jonathon exercised the option. Jonathon paid Will $100 consideration for the option.

Will became the owner of the Investment Property on Friday 29 April 2022 after settlement. Jonathon then moved to exercise the option.

Advise Will whether the option is voidable. Choose one common law or equitable vitiating factor that you think is the most likely to be successful and demonstrate why it is the most likely choice to succeed. Do not address election.