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Case Study 

Bob Burke is a graduate in marketing. After working for a well-known marketing firm for three

years, he decides to establish his own business specialising in marketing issues relevant to business websites. He inspects an office in a new shopping centre in Melbourne owned by Southfield Shopping Centre Ltd (Southfield). The Managing Director of Southfield is Ken Keen.

Bob wants an assurance that no other similar business will be allowed to lease premises at the shopping centre before he signs the lease. This is verbally agreed to by Ken. Bob signs the lease agreement without reading it. The lease agreement contains a clause to the effect that the lease terms and conditions represent the entire agreement between the parties and excludes any oral or verbal representations by any representative of Southfield.

The shopping centre proves to be a financial failure for Southfield due to the high vacancy rate of the shops. Accordingly, six months later, the company allows another business that is similar to Bob's to lease premises in order to help reduce the financial pressure. As a result, Bob's business declines due to the competition.

When Bob complains to Ken, he is told that there is no clause in the lease agreement preventing the company from letting premises to a competitor in the same industry, and that the verbal assurance given by Ken is not binding because of the disclaimer clause in the lease contract.

Advise Bob of any rights he may have under common law and statute.

Top Answer

In the court of law. oral agreements are not effective and... View the full answer

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