Question:
Koala Balls Australia Pty Limited (“Koala”) is a manufacturer and wholesaler of high-quality sporting balls. Koala manufactures and retails balls for the sports of cricket, soccer, netball and all football codes. Koala’s balls are made from the highest quality fabric and where necessary hand stitched in the factory in Moss Vale NSW.
Koala is seeking to expand into the Asia Pacific region, it placed an advertisement on its website stating the following:
Contact our friendly sales staff to discuss.
The Minister for Sport in Vietnam (“The Minister”) saw the advertisement and decided that the Department of Sport in Vietnam would buy a bulk shipment of sports balls and distribute them through Vietnam, with the two-fold aim of increasing participation in sport and to improve the medal count at the Paris Olympic Games in 2024. The Minister has the authority to enter into contacts on behalf of the Department of Sport.
The Minister sent an email to the sales department of Koala asking for pricing and shipment dates.
Karen from sales sent the following email in response:
Netballs- All Australian made- $5.50:
Soccer balls: All Australian made and hand stitched- $22.00;
Cricket balls: Red, white and pink available- All Australian made and hand stitched- $13.00; and
Footballs- various codes available- All Australian made and hand stitched- $25.00.
The above prices are discounted by 10%, offer open for one week only.
On receipt of the email the Minister sent an email in response:
Will purchase at the quoted price 1000 Netballs, Soccer, red and white cricket balls and 2000 footballs for rugby and 500 for Australian Rules Football.
Ship to Department of Sport Offices Vietnam, Incoterm DDP (2020), next available ship.
Karen responded by email as follows:
Price agreed. Incoterm FOB. Payment by documentary letter of credit.
The Minister responded;
Agreed, advise ship and arrival date.
The balls were packed into a container and loaded on the Ship the S.S. Golden Goose on 6 August 2021. Karen emailed this information to the Minister.
Prior to leaving the Port of Wollongong the Master of the S.S. Golden Goose conducted due diligence on the vessel, however a number of the ships crew had contracted COVID-19 and were unable to sale, the Master decided to sale to Vietnam shorthanded, he left port on the 7 August 2021.
On 9 August 2021 off the coast of the Island of Peace (” Island”), the S.S. Golden Goose was boarded by the well know pirate Captain Sparrow. The container containing the balls was opened by Captain Sparrow’s men and the balls were removed from the S.S Golden Goose. Captain Sparrow distributed the balls to the school age children on the Island.
When the S.S Golden Goose docked in the Port of Vietnam the Minister was informed the cargo had been stolen during the voyage by pirates.
Due to work pressures the Minister had forgotten to insure the cargo.
Part A.
The Minister seeks your advice on the following issues
- Is there a contract between The Department of Sport in Vietnam and Koala Balls Pty Limited in Australia and if so, what are the terms of that contact?
- Has there been a fundamental breach of contact by Koala due to the failure to deliver the balls to the Department of Sport in Vietnam?
- Which party had the legal responsibility to insure the cargo.
Part B.
The owner of the S.S Golden Goose seeks your advice on weather they have any liability for the loss of the cargo?
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