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You have entered into a contract with a construction company named Easy Builders Pty Ltd (‘Easy Builders’). According to this agreement, Easy Builders is responsible for constructing a custom-designed office building for your new business. The contract specifies that the construction must be completed within 18 months, and it requires the use of a special type of concrete as one of the building materials. However, after six months of construction work, there is a global shortage of this specialised type of concrete due to unexpected disruptions in the supply chain for the raw materials needed to produce the concrete. Easy Builders attempted to find alternative sources for the specialised concrete, but was unable to obtain the quantity required to finish the building project within the 18-month timeframe required. Consequently, you were unable to occupy the office space from the time you had planned. As a result, you incur financial losses of $20,000 for the short-term hire of alternative premises. Due to these circumstances, you wish to terminate the contract with Easy Builders and seek compensation for your losses. You are uncertain about your legal rights in this situation, so you have sought guidance from a Generative AI system regarding the legal aspects of your dispute. The Generative AI system that you have consulted has provided the following response: ‘Can damages be claimed? In contract law, damages are a monetary award given to the innocent party to compensate for any losses suffered as a result of the breach of contract. In this case, the new business suffered a loss of profits of $20,000 dollars as a result of the delay caused by Easy Builders' breach of contract. The innocent party can claim damages to compensate for the loss, including lost profits resulting from Easy Builders' contract breach.’ Part A (2 marks): Using the Generative AI produced response above, identify the elements of the IRAC method that are reflected in this response. That is, identify which sentence(s) addresses the issue, rule, application, and conclusion steps of the IRAC process. Please type your answer directly into the box below.

Question

You have entered into a contract with a construction company named Easy Builders Pty Ltd (‘Easy Builders’). According to this agreement, Easy Builders is responsible for constructing a custom-designed office building for your new business. The contract specifies that the construction must be completed within 18 months, and it requires the use of a special type of concrete as one of the building materials.

However, after six months of construction work, there is a global shortage of this specialised type of concrete due to unexpected disruptions in the supply chain for the raw materials needed to produce the concrete. Easy Builders attempted to find alternative sources for the specialised concrete, but was unable to obtain the quantity required to finish the building project within the 18-month timeframe required. Consequently, you were unable to occupy the office space from the time you had planned. As a result, you incur financial losses of $20,000 for the short-term hire of alternative premises.

Due to these circumstances, you wish to terminate the contract with Easy Builders and seek compensation for your losses. You are uncertain about your legal rights in this situation, so you have sought guidance from a Generative AI system regarding the legal aspects of your dispute. The Generative AI system that you have consulted has provided the following response:

‘Can damages be claimed? In contract law, damages are a monetary award given to the innocent party to compensate for any losses suffered as a result of the breach of contract. In this case, the new business suffered a loss of profits of $20,000 dollars as a result of the delay caused by Easy Builders' breach of contract. The innocent party can claim damages to compensate for the loss, including lost profits resulting from Easy Builders' contract breach.’

Part A (2 marks): Using the Generative AI produced response above, identify the elements of the IRAC method that are reflected in this response. That is, identify which sentence(s) addresses the issue, rule, application, and conclusion steps of the IRAC process. Please type your answer directly into the box below.

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Solution

Issue: "Can damages be claimed?"

Rule: "In contract law, damages are a monetary award given to the innocent party to compensate for any losses suffered as a result of the breach of contract."

Application: "In this case, the new business suffered a loss of profits of $20,000 dollars as a result of the delay caused by Easy Builders' breach of contract."

Conclusion: "The innocent party can claim damages to compensate for the loss, including lost profits resulting from Easy Builders' contract breach."

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