PART B

This Part is worth 20 marks

Please read the following problem question and answer all questions

Pearl is an ambitious barista who is opening up her own Italian coffee shop. She has found a perfect corner premises in the heart of Fremantle and has fitted it with Italian antique décor and rustic colours.

Pearl rings Aroma Coffee, a supplier of commercial coffee machines and coffee.  She speaks to Luigi, the owner, and tells him that she saw the ‘Numero Uno’ coffee machine advertised on his website for $12,000. She tells him

that she would like to purchase the machine for a price of $8,000. Luigi, aware of the high value of the machine, tells her that he will not sell the machine for less than $11,500. Pearl then tells him that she can only just stretch her

budget to $11,000 and that is all she can offer him. After some thought, Luigi agrees to sell the coffee machine to Pearl for a price of $11,000. He takes her credit card details over the phone, dials it through the EFTPOS machine

and tells her that he will deliver the machine to her within five working days.

Please answer the following questions. Do not forget to provide a discussion of the relevant law prior to discussing the outcome of your answer.

(a)    Has an agreement been reached between Pearl and Aroma Coffee? Give reasons for your answer.
(8 marks)

(b)    Does the element of intention to be legally bound exist between Pearl and Aroma Coffee? Give reasons for your answer.
(4 marks)

(c)    Has consideration passed between Pearl and Aroma Coffee? Give reasons for your answer.
(3 marks)

Presentation                                               (2 marks)

Referencing                                               (3 marks)