Rollinstone Ltd (Rollinstone) is an electrical wholesaling company operating through warehouses in Melbourne, Sydney and Adelaide. It
supplies electrical consulting services and lights, switches and wiring to builders. The company has an excellent reputation for
providing good advice, quality electrical work and high quality products. It employs qualified electricians and obtains products and
equipment manufactured in New Zealand and Australia.
When a builder contacts the company, Rollinstone sends out an electrician to talk to the builder. Within 24 hours of that meeting
Rollinstone sends a fax to the builder with a list of recommendations, prices and estimate of delivery dates. The client then signs and
returns the fax, and posts a confirmation letter and deposit at the same time. The goods order is then filled and the work done by
Rollinstone, normally within one week of the builder’s request.
Three months ago the company was sold to Eminem who is looking for ways of cutting costs. This includes replacing qualified
electricians who leave with less-qualified people and looking for cheaper sources for equipment and goods.
Jimi Hendricks is a builder who has dealt with withRollinstone for some years. The credit terms, prompt delivery, prices and quality
offered by Rollinstone are all important to him because he builds high quality houses and is often working under very tight timelines
and profit margins. One month ago he rang the Sydney branch as he normally would, to request assistance with the lighting and other
electrical work for a new house. Bob Dillon, who failed his apprenticeship exams, has recently been hired as an electrical assistant.
Bob was sent to give Jimi some advice. After his visit the fax arrived as normal and, without reading it, Jimi signed and returned it,
sending the copy plus deposit through the mail, also as he normally would. This mail is delayed because of a postal strike and does not
arrive at Rollinstone’s offices until two weeks after he posted it.
It was only when Jimi rings Rollinstone to arrange for the work to be carried out (three weeks after he sent the fax and one week after
Rollinstone received his letter and deposit) that he discovered there are problems. He is informed by BettMiddler, the Manager of the
branch, that some of Bob’s recommendations are impossible to carry out, that some switches have to be ordered from a factory in Asia,
that a specialist electrician will have to be employed to do the work and that Jimi will have to pay an extra $1000 up-front if he
wants the work to be carried out within three months. When Jimi objects, Bett points out that the price and time estimates in the fax
were clearly specified as rough estimates only and that under a new policy of the company, Jimi’s order was not sent to the supplier
until Rollinstone received his confirmation letter and deposit.
Jimi is horrified at this bad news as he has only four weeks in which to complete the house or face penalty payments.
Required: advise Jimi as to his legal rights. In your answer, identify any limitations to those rights and his ability to enforce them.
Also identify any further information that you would find useful in deciding whether those rights can be enforced. Always ensure you
refer to relevant case and statutory sources to support your answer.