Q1(Consideration;Promissory Estoppel) On January 1 2009, Ryan entered into a 5 year lease of a restaurant...
Question;Tutorial Questions;Question 1 (Consideration;Promissory Estoppel);On January 1 2009, Ryan entered into a 5 year lease of a restaurant;premises in the central business district of Southport, Queensland. In 2010;the local council approved a light rail project. This involved the construction;of rail lines which ran past Ryan?s restaurant. Construction commenced in the;same year on 1 July with completion of the project to occur by early 2015. The;construction works in and around Ryan?s restaurant and associated traffic made;it difficult for customers to access the restaurant, so much so that sales;revenue dropped 60%. Ryan wanted to quit the lease and if sued for breach of;the lease, intended to file for bankruptcy as he had very few assets other than;the restaurant. David, the owner of the premises and Ryan?s landlord, did not;wish to lose Ryan as a tenant because it was unlikely that David would find;another suitable tenant given the market conditions. With this in mind, David;approached Ryan on 1 January 2011 and entered into an oral agreement with Ryan;to reduce the rent from $15,000 per month (as stated in the written lease;agreement) to $5,000 per month. The agreement did not state the period for;which the reduced rent was to be paid. Due to good weather, the construction of;the rail line in Southport was completed early (January 2013). In fact;business has been very good for Ryan since 1 January 2013, with revenue up 20%;compared to the time just before construction commenced. In response to the;improvement in Ryan?s business, David has demanded rent in arrears from Ryan;claiming that he has to meet his existing contractual obligation to pay $15,000;per month and that Ryan provided no new consideration under the verbal;agreement to reduce the rent.;Advise David as to whether he can claim from Ryan under common law;(consideration) and/or equity (promissory estoppel);(a) Rent in arrears from 1 January 2011, or;(b) Rent in arrears from 1 January 2013;Question 2 (Consideration);In December 2012, Archie and;Bob enter into a written contract whereby Archie agrees to rebuild Bob?s Toyota;Supra for $5,000 to be payable upon completion. Archie rebuilds the Toyota;Supra and provides an account for $5,000. Bob advises Archie that he is willing;to pay Archie $3,000 and promises to professionally wash and detail Archie?s;BMW roadster as and when requested by Archie during 2013. Bob asks Archie;whether he would be prepared to accept this arrangement as full and final;settlement for the rebuilding work. Archie agrees and receives the $3,000.;Shortly after receiving the money, Archie asks Bob whether he uses the Maguires;brand of car wash and polish when detailing Archie?s car. Bob promises Archie;that he will use this brand. In fact Bob uses a different brand of car wash and;polish. Archie finds out, changes his mind on the arrangement and decides to sue;Bob for the $2,000 on the grounds that Bob has an obligation to pay the balance;and that Bob breached the agreement to use the Maguires brand of car wash and;polish. Advise Archie.
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