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  3. question 1 four step process question 25 marks students...

Question: question 1 four step process question 25 marks students...

Question details

Question 1 - Four Step Process question (25 marks)


Students are reminded that Question 1 examines ‘Topic 7 – Remedies for breach of contract’ only.


The Four Step Process marking rubric is:



No marks specifically allocated


14 marks


8 marks


No marks specifically allocated


3 mark available



Justine Lim decides to open her own art gallery in Perth, the Gallery of Modern Art (GMA). To launch the opening of GMA, Justine sources a new contemporary painter in Melbourne, James Scott, who specialises in painting Australian native plants and wildlife. Given the rarity of contemporary paintings depicting Australian native plants and wildlife, Justine believes that exhibiting James Scott’s paintings will make her gallery very successful in a highly competitive art market in Perth.


Justine contacts James Scott and asks to exhibit his work at the grand opening of GMA on Saturday 1 March 2018. To ensure he agrees, Justine tells him that the grand opening of GMA will be a very luxurious event and that no expense will be spared! She predicts she will spend over $100,000 on the event to ensure it is a great success. James Scott agrees and sends her a standard contract stating the terms upon which he is willing to exhibit his paintings. The contract states:

  1. James Scott agrees to release 25 paintings for exhibition at the grand opening of GMA in Perth from Saturday 1 March 2018 to Saturday 8 March 2018.
  2. GMA are responsible for couriering the 25 paintings. The paintings will be ready for collection on Friday 21 February 2018 and must be returned by Friday 14 March 2018.
  3. The work of other painters must not be displayed within the gallery whilst the gallery exhibits the work of James Scott.


Justine agrees to the terms specified by James Scott in the contract, and signs the contract.

Justine contacts David, the owner of Courier Express to hire their services to courier James Scott’s 25 paintings from Melbourne to Perth. David agrees and requires a non-refundable deposit of $2,000 to secure his services. The cost of the shipment and delivery of the 25 paintings will be an additional $5,000 per delivery. A 10 day cancellation policy applies otherwise the cost of the scheduled delivery must be paid in full. 


To promote the opening of GMA, Justine hires the public relations services of Travis’ consultancy business. Not only is Travis responsible for promoting the opening of GMA, he is responsible for designing and printing the invitations and arranging the publicity for the event. The cost of hiring Travis’ services is $2,500.


News that GMA will be exhibiting James Scott’s work at its opening night travels around Perth fast. The local newspapers report the GMA opening as the art event of the year! 


On Thursday 20 February 2018 (one day before the paintings are due for collection), James Scott hears untrue rumours that GMA’s opening will exhibit a number of Australian painters. Without clarifying the circumstances with Justine, he decides to terminate the contract. Justine makes no attempt to reason with James Scott. Acting hastily, she decides to cancel the GMA grand opening, since she does not have any art work to exhibit.


Justine is very upset and wishes James Scott would carry out the terms of their contract because if he does not she will incur substantial loss, such as:

  1. The non-refundable deposit of $2,000 to secure the services of Courier Express and the cost of the first delivery of $5,000 (as it was too late to cancel their services).
  2. The cost of $2,500 for hiring Travis’ public relations services.
  3. The costs incurred for the grand opening as of Thursday 20 February 2018 (e.g. invitations, deposit for musicians, food, etc.) – estimated value of $150,000.
  4. The negative publicity generated as a result of cancelling the GMA opening at short notice – Justine estimates that the damage to GMA’s reputation would be $5,000.
  5. The cost of $2,000 for professional counselling that Justine has sought as a result of James Scott breaching the contract.









Assuming there has been a breach of the terms of the relevant contract, using the Four Step Process, determine:

  1. Whether Justine will be successful in obtaining orders from a court to make James Scott exhibit his paintings in GMA; and
  2. If Justine is unsuccessful in obtaining orders from a court to make James Scott exhibit his paintings in GMA, what remedies are available for breach of contract by James Scott? To what extent will James Scott be liable for the losses claimed by Justine?
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