Question 1 Hugo owns a theatre company and has recently entered into a number of

Question

Question 1

Hugo owns a theatre company and has recently entered into a number of contracts.

He rented a lorry from Go Van Hire Ltd for a period of 12 months, while he took a play on tour throughout Hong Kong. The contract provided that the lorry would be roadworthy. Unfortunately, there was a fault in the engine and, due to a shortage of spare parts, the lorry was unavailable for the first two months of the contract period. Hugo had to hire another lorry on a weekly basis at a considerably higher cost, until Go Van Hire Ltd was able to provide him with their lorry.

Two months before the show was due to open, Mark, the stage manager, died suddenly. Hugo asked his daughter, Nina, who had recently graduated in theatre studies, to take over as stage manager and she agreed.

Hugo had hired the famous actors Indy and Jack as lead actors in his play. Before rehearsals began, Indy fell ill and Jack broke a rib.

Indy and Jack failed to attend the start of rehearsals. Consequently, Hugo hired Kev (to replace Indy) and Les (to replace Jack).

Indy was only ill for the first three days of rehearsals, but was available for the remaining rehearsals and for the play.

Jack missed all the rehearsals and the first two weeks of the play. Hugo had to pay Les at a significantly higher rate than he had agreed to pay Jack.

Six months into the tour, a theatre, owned by Ken, in which the company was due to perform, accidentally burned down. Hugo had paid Ken a deposit of $10,000, which Ken is refusing to return.

Required:

b Explain how a court would determine whether there is an intention to create legal relations in the agreement between Hugo and Nina.

ci) Explain the effect of the theatre burning down on the contract between Hugo and Ken.

cii) Explain whether Hugo is entitled to reclaim his deposit.

Explanation / Answer

1St question

As Mark was the stage manager who was working with Hugo for a longer time with his theater company and his daughter Nina who has obtained a degree in theater studies so it is clear intention for Hugo to make a legal agreement with Nina as she has the knowledge in this field to handle the work and alternatively she will also get financially benefited from the job. The court determination is very transparent in this case.

2nd question

In the six month tour, Hugo and Ken had done an agreement where Hugo has given $10,000 to Ken. A performance was going to happen in the theater but before the performance, the theater has come across the fire and it burnt down but Ken was refusing to return the money to Hugo which was the breach in the contract. Hugo should take this matter to court and take legal proceedings to Ken so that Hugo can get his money.

3rd question

Definitely, Hugo should take action to get return money from Ken as it was under the contract. He should reclaim the money and should file a lawsuit to solve this process as earliest and the contract breach that has occurred can be highlighted to get an immediate return of $10,000 from Ken.

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