Business Law Case Study: Lame Duck Restaurant's Contractual Dispute

This case study analyzes a business law scenario involving the Lame Duck Restaurant and a customer, Li, who booked a wedding. The restaurant, due to a pricing error, refuses to honor the contract. The assignment uses the IRAC method (Issue, Rule, Application, Conclusion) to evaluate the situation, focusing on contract breach and remedies. The analysis considers whether the restaurant's refusal constitutes a breach, Li's rights to specific performance or damages, and the implications of Li's potential choice to continue the contract. The solution references legal precedents like Associated Newspapers Ltd v Bancks and DTR Nominees v Mona Homes to support its conclusions. The core issue is whether the restaurant's mistake negates its contractual obligations, and the answer examines the consequences of the refusal to provide the venue. The conclusion is that the restaurant's refusal constitutes a breach, entitling Li to seek contract performance or damages.

BUSINESS LAW

Issue
The issue presented in the case study is to conclude on the consequence of refusal by the
Lame Duck Restaurant to provide the premises for wedding, when there is an obligation to do
so.
Rule
It must be significantly noted that being mistaken about a certain part of the contract does not
does not provide the rights to the parties to get away with the contractual obligations. Hence,
even if there is a fundamental mistake, the contractual commitments must be performed as
earlier was decided. It must be noted that if one of the parties to the contract do not perform
their respective commitments, than the other party can treat the said refusal as breach of the
contract. A renowned case of Associated Newspapers Ltd v Bancks1 must be essentially noted
in this regard. According to the judgement in the case law, when a refusal to perform an
obligation of a contract is such that the key objective or basic substance of the contract
becomes invalid, the breach arises. Additionally the above principle was accorded in the case
of DTR Nominees v Mona Homes2 as well. Thus, it must be noted that the aggrieved party can
end the contract altogether only when the breach is major. In such a case, the damages can be
claimed by the innocent party for the violation of the contract.
However, an innocent party may choose to continue the contract and the other party cannot
force the former to terminate the contract on his instance. However, there is a condition to
such an option to continue the contract. The condition is that if the nature of performance of
obligation on the part of the innocent party is such that it requires acts from the other party
too, and other party refuses, the contract cannot be continued for the said portion.
Application
The application of the above stated legal rules to the presented scenario renders following
insights. It would be regarded as a breach of contract if one of the parties in the presented
scenario that is Lame Duck Restaurant refuses to allow the premises being used for the
wedding, as it is the fundamental term of the contract. Further, the breach is regarded as
serious because the invitations are already being sent out to the friends of Li stating the said
premises as venue for the wedding. On application of the principles of the Associated
1 Associated Newspapers Ltd v Bancks (1951) 83 CLR 322; [1951] HCA 24
2 DTR Nominees v Mona Homes (1978) 19 ALR 223

Newspapers Ltd v Bancks, it can be stated that as Lame Duck Restaurant failed to adhere to
its contractual commitments. This gives Li the right to treat the contract as violated, by virtue
of which specific performance can be asked or damages can be claimed. However, the issue
is to determine the consequence if Li elects to continuation of the contract.
Hence, on application of the pronouncement of DTR Nominees v Mona Homes, it can further
be stated that Johnny cannot force the termination of the contract on his instance, as he is not
the aggrieved party in the presented case scenario.
Conclusion
Accordingly, as per the evaluation of the issue, review of applicable rules and the application
thereon, the conclusion is reached the refusal on part of the party Lame Duck Restaurant to
provide the venue for wedding can be regarded as breach of contract by Li. Consequently, it
gives rights to Li to either seek the performance of contract in a specified way or he would be
provided the damages for the said refusal by the restaurant.

Bibliography
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322; [1951] HCA 24
DTR Nominees v Mona Homes (1978) 19 ALR 223