Assignment Question Fred from Rapid Creek, flushed with the success of the sale of his Armani jacket decides to become a clothing magnate. He goes to the Humpty Doo Fair and meets Garry from Gundagai who offers verbally to sell him 500 genuine Armani coa

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Assignment Question

Fred from Rapid Creek, flushed with the success of the sale of his Armani jacket decides to become a clothing magnate. He goes to the Humpty Doo Fair and meets Garry from Gundagai who offers verbally to sell him 500 genuine Armani coats made in Italy for $10,000. Garry wants cash or the equivalent.

Fred does not have $10,000 but he sees an old acquaintance, Pete from Palmerston. Fred offers to sell his Kia car [worth about $18,000] to Pete for $10,000. Pete says he will buy the car but wants to pay in gold bullion. Fred agrees and accepts a gold bar from Pete in full payment for the car. Subsequently, Fred offers Garry the gold bar given to him by Pete as full payment for the coats. Garry weighs the bar and accepts the deal. Garry is a wheeler and dealer who believes he knows the value of gold.

Fred sets up a stall on Bagot Road and advertises as follows ‘GENUINE FAMOUS NAME JACKETS FOR LESS THAN COST’. Tommy, a tailor from Toowoomba, is passing by. He stops his car and carefully examines the fabric. It feels like good wool. Tommy buys the whole stock from Fred for $25,000. He pays him a deposit of $1,000 cash and leaves his $10,000 Omega Watch as security.

Tommy takes the coats back to his shop and has second thoughts. The only contact details he has for Fred is the phone number on the otherwise illegible receipt Fred gave him. He dials the number and gets a recorded message: ‘You have rung the third bar stool on the left at the Rapid Creek Pub. The occupant is not presently sitting on it, but never fear Fred is near’. Tommy leaves a message for Fred. He says ‘The deal is off, you can have the grand, but I want my watch back’. He receives no reply. 2