Scenario:
Canberra Balloon Society Pty Ltd (CBS) runs the Canberra Balloon Festival, an important annual tourist event which runs from 1 November 2017 until March 31 20017. During the festival, a fleet of balloons tour the lake and parliamentary zone. The event attracts significant marketing opportunities for CBS. The CBS Board is looking for a feature exhibit that will attract strong sponsorship. At the request of the Board, the CEO, Jimmy Tee approaches Jansky, the world-renowned sculptor who is famous for her original and controversial hot air balloons.
On 3 June 2017. Jimmy asks Jansky if she would be willing to exhibit her remarkable “Sky Toady”, a 34-meter-long 23-meter-high hot air balloon in the form of a Cane Toad. Jansky says she will accept a fee of $8,000 for the hire of the balloon, payable in equal monthly instalments with the first due on 30 November 2017. Jimmy tells her that this sounds great subject to the CBS Board approving the arrangements.
On 13 June, the Board asks Jimmy to enter a contract with Jansky. Jimmy sends her an email to in which he confirms the CBS would like to proceed with their deal as discussed. The next day Jansky sends Jimmy an email proposing the following additional terms:
“1.CBS is responsible for hiring a suitably qualified pilot to fly the balloon and for the proper care and maintenance of the balloon.
2. CBS also agrees to ensure the balloon is kept safe and secure in a weatherproof hangar at all times when it is not being used.”
On 14 June Jimmy replies to Jansky’s email: “Agreed”.
On 15 June 2017, Jimmy consults millionaire balloonist and retired businessman, Richard Brandon about piloting the balloon. Richard is famous for having flown his own private balloon to Antarctica. Richard tells Jimmy that piloting the stunning Sky Toady would be “a dream come true” and he is happy to offer his piloting services “gratis”. Richard also kindly offers to store Sky Toady in his state of the art hangar at his property in Pialligo. Jimmy agrees provides CBS mechanics can access the hangar to ensure the balloon is regularly serviced and kept in good working order. Richard says, “no problem” and he and Jimmy shake hands. The CBS Board agrees with the proposed arrangements and asks Jimmy to enter a contract with Richard on behalf of CBS.
On 15 August, Jimmy asks Richard if he is willing to sign a deed to record the arrangements discussed on 15 June. Richard says there is no need for a deed “just send me around a case of Crystal Champagne to seal the deal mate.” A case of Crystal Champagne is duly sent to Richard’s house on 20 August with this note from Jimmy:
“Dear Richard,
We thank you for agreeing to pilot and warehouse the Sky Toady during the Canberra Balloon Festival. We note that CBR mechanics will be responsible for service of the balloon during its stay on your property. Please note these arrangements are entered into at your own risk. CBR accepts no liability to you for any loss or injury you may sustain for any reason resulting from the terms of our agreement. Happy flying.
Sincerely
Jimmy Tee, on behalf of Canberra Balloon Society Pty Ltd “
Sky Toady arrives on 8 November. For the next two months, the balloon proves a major draw card for the Festival. On most mornings, the giant floating toad can be clearly seen touring around the lake with Richard proudly at its helm
On 8 January, the weather forecast for Canberra is mild and Richard sets out for his daily tour. Unfortunately, not long into the flight, the winds unexpectedly strengthen and he is forced to land the Sky Toady on the lawns above Parliament House. Richard is seriously concussed when the “envelope” deflates too rapidly on its descent. Later this is found to be the result of a maintenance error by the CBS mechanic. Richard is taken to hospital and the balloon is left tethered to the flag pole and subject to the mercy of the rising storm. Sadly, later that night Sky Toady is hit by lightning and burns to the ground.
Richard has told CBS he will sue them for the injuries he received because of the faulty valve. Janksy is furious and is demanding compensation from CBS for the value of the balloon plus the outstanding hire fees.
Advise the Canberra Ballooning Festival on their liability to Jansky and Richard under contract law. ( Note you should not consider issues of tort liability)
Some questions and issues to think about as you go through this exercise:
1. Is there a contract between Jansky and CBF and if so what are its terms?
2. Is there a contract between Richard and CBF and if so what are its terms?
3. Has the contract between Jansky and CBF been breached in some way that has given rise to loss/damage to Jansky (who makes money from the hire of her balloon) or is there an argument that CBR can raise to avoid liability?
4. Has there been a breach of any contract between Richard and CBF?
5. What remedies if any are available to Jansky and Richard against CBF?
You are to consider the scenario below (and the associated materials) and provide advice in the form of a letter of no more than 2,500 words to your client (Canberra Balloon Society Pty Ltd).
