What Pertains Breach of Contract

Part A            

Mary owns an extreme adventure sports business in Newcastle. She sells the business to Frida for $350,000. In the contract, Mary agrees that for the next two years she will not open a similar business within 500 kilometres of the sold business. Three months after selling her business to Frida, Mary sets up an extreme adventure sports business in a southern Sydney suburb, 170 kilometres away from Frida’s business. Frida wants to prevent Mary from doing this.

What is your advice to Frida regarding the legality of her contract with Mary?

Part B           

In an effort to reduce bikie-related violence the NSW Parliament passes a law called the Bikies Act  and among other things it provides that “no person shall deal in Harley-Davidson motorbikes with any member of a proscribed bikie gang”. Kevin enters into a contract to sell Malcolm his Harley Davidson. Unknown to Kevin, Malcolm is a member of The Invincibles, a bikie gang proscribed under the Act. Malcolm later refuses to accept delivery of the motorbike. Kevin brings legal action against him for breach of contract. Malcolm argues that the contract was prohibited by the NSW statute and was invalid and as a result cannot be enforced against him.

Advise Kevin.

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