Contractual Relationship and Consumer Rights

This article discusses the contractual relationship between High Five Systems and various parties and the consumer rights under Australian Consumer Law. It analyzes the issues, applicable laws, and application of law in two different scenarios. The first scenario examines the binding contractual relationship between High Five Systems and Jacob, Iris, Hamid, or Ranbir. The second scenario explores Brian's rights under Australian Consumer Law against High Five Systems and Boast Australia. The article concludes with a bibliography of relevant sources.

1
Title Page
Name of the student
Student

2
Contents
Solution 1.........................................................................................................................................3
Issue.............................................................................................................................................3
Applicable law.............................................................................................................................3
Application of law........................................................................................................................4
Conclusion...................................................................................................................................5
Solution 2.........................................................................................................................................5
Issue.............................................................................................................................................5
Applicable Law............................................................................................................................5
Application of Law......................................................................................................................6
Conclusion...................................................................................................................................7
Bibliography....................................................................................................................................8

3
Solution 1
Issue
With whom High Five Systems has a binding contractual relationship, that is, Jacob, Iris, Hamid
or Ranbir?
Applicable law
Two private persons when wish to abide by their promises legally can bind themselves together
under a contractual relationship. A contract is made with the combination of agreement, legal
intent, consideration and party’s ability.1
The offeror acts to convey a proposal explicitly with the hope of confirmation is an offer in law
and is held in Carlill v. Carbolic Smoke Ball Co2. It can be explicit in words, conduct or text
form but as per Smith v Hughes3 the offeree should attain its knowledge to make it legal and
binding in law. An offer made with the help of instant mode of communication is only complete
when the offeree is in the knowledge of the same and is held in Entores v Miles Far East Corp4.
The offeree when agrees to abide by what is offered to him is an acceptance in law. An
acceptance should correspond to the offer in order to hold valid and is held in Empirnall
Holdings Pty Ltd v Machon Paull Partners Pty Ltd5. It can be explicit in words, conduct or text
form but as per Entores v Miles Far East Corp the offeror should attain its knowledge to make it
legal and binding in law. As per Felthouse v Bindley6 an acceptance intended but never
communicated is nothing and results in no contract.
When the acceptance is not in correspondence with the offer but changes the offer terms then,
such act is counter offer and not an acceptance. The counter offer kills original offer. But,
seeking queries and information is no counter offer and is held in Hyde v Wrench7.
1Enshen Li, Business and Corporate Law (Second Edition), (Thomson Reuters: Pyrmont, NSW, 2017).
2 Carlill v Carbolic Smoke Ball Co. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
3 Smith v Hughes (1871) LR 6 QB 597.
4 Entores v Miles Far East Corp [1955] 2 QB 327.
5 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (NSW) (1988) 14 NSWLR 527.
6 Felthouse v Bindley (1862) EWHC CP J 35.
7 Hyde v Wrench [1840] EWHC Ch J90 .

4
When with the help of an advertisement, offers are intended to be received from the desired
person then it s an act of an innovation and is held in Partridge v Crittenden8. The inviter
(offeree) confirmation to the offers results in binding contract.9
Application of law
An advertisement by High Five Systems was displayed on 25th November selling 10 units of
Boast Sound system; model BS100 @ $2000. Whosoever wants to make offer can visit of can
make a call.
As per Partridge v Crittenden an invitation is made by High Five Systems and thus any offer if
accepted by High Five Systems results in contract.
Now,
Jacob called High Five Systems and communicated his acceptance and his desire to make
payment and collect the systems. But, he made an acceptance when there is no offer rather an
invitation s made by High Five Systems. So, the acceptance is not n correspondence with an
offer resulting n no contract.
A call was made by Iris on 245th November. A valid offer was made by Iris but the same was
not communicated to High Five Systems or any of its sales persons. The telephone line was not
working effectively and Iris thus left the message on the answering machine. But, as per
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (NSW) an offer on the machine
has no relevance until it comes in the knowledge of the offeree. Since, the message was only able
to be heard by the staff of High Five Systems on 28th, thus, the communication is complete only
on 28th. But, this offer was never responded by High Five Systems with an acceptance. As per
Entores v Miles Far East Corp an acceptance when intended must be communicated. Since there
was no communication of acceptance, thus, there is no contract.
Further, on 26th November, Hamid wish to purchase the sound system but he is willing to buy the
same as layby so that the payment of the same can be made after the month. He visited High Five
Systems but makes no offer to the sales representative of High Five Systems, Rhonda. He only
8 Partridge v Crittenden [1968] 1 WLR 1204.
9 Paul Latimer, Australian Business Law 2012, (CCH Australia Limited, 2012).

5
tells him his query. Thus, as per Carlill v Carbolic Smoke Ball Company there was no offer that
was made by Hamid. Rhonda also communicated to Hamid and submitted that the query that is
sought by him s not as per the terms of their company and thus they cannot sell the products on
layby basis. Thus, the query of Hamid was resolved without any communication of any offer
from the side of Hamid or any acceptance from the side of Rhonda.
Thus, later when Hamid submitted that he will come later and will make the payment and collect
the items has no relevance as there was no contract that exists amid the parties.
Also,
Ranbir wants to purchase all the 10 sets of the sound system from High Five Systems and thus he
visited High Five Systems on 27th November. He made an offer to Jimmy (sales person of High
Five Systems). Thus, as per Carlill v Carbolic Smoke Ball Company a valid offer was made by
Ranbir and which was communicated to Jimmy and thus the offer is enforceable. But, Jimmy did
not accepted the offer that was made by Ranbir, rather, he submitted that he is not sure of the
presence of all the 10 sound system and if they were be available then the same will be delivered.
But, this acceptance is nothing but a counter offer that is made by Jimmy including new terms to
the offer of Ranbir.
A valid contract would have been made if Ranbir would have accepted the counter offer of
Jimmy. But, nothing was made on the part of Ranbir which shows his acceptance.
Thus, there was no acceptance that was made and thus there is no contract amid the parties.
Conclusion
High Five Systems has not made any kind of contractual relationship with any of the parties as
there were no offers that are made with the supporting considerations.
Solution 2
Issue
Whether Brian has any rights under Australian Consumer Law against High Five Systems and
Boast Australia?

6
Applicable Law
The Consumer Protection Act is drafted order to protect the interest of the consumer and to
impose certain obligations of the manufacturers and the sellers which must be comply with by
tem at any cost.
Section 3 of the Act submits that any person who is purchasing the goods up to $40,000 or if
more than $40,000 for personal use, then, such person are the consumers and can bring an Acton
against the manufacturer or the sellers. The various implied warranties that are imposed
includes:
i. As per section 18, no seller must indulge in acts that are deceiving or misleading the
consumer s;
ii. As per section 29, no misleading or false representation must be made by the seller;
iii. As per section 33, any misrepresentation with respect to the nature of the product is
not permitted;
iv. As per section 54, the goods so supplied must be of acceptable quality10
v. As per section 55, the goods so supplied must fit the purposes so acquired.11
Application of Law
It is submitted
It is assumed that the sound system was not sold to any of the persons. Rather, the sound system
was sold to Brian. A document was sent along with the system which contains a term according
to which High Five Systems is not giving any guarantees or warranties with respect to the
efficiency of the operation of the sound systems and suitability for purpose.”
Now, Bran purchases 10 sound system of $2000 each. Thus, the value of all the system is
$20,000 and thus less than $ 40,000. So, as per section 3 of the Act, Brian is the consumer and
can thus bring an actions against the ma manufacture (Boast Australia) or the seller (High Five
Systems)
10 Grant v Australian Knitting Mills (1935)
11 David Jones v. Willis (1934) 52 CLR 110.

7
It is submitted that there are several defects that were faced by Brain with respect to the sound
system, that is:
i. Five of the sets are not working properly and are functioning at a very low volume
and are thus not properly audible. Though Bran did not tell the sale person of High
Five Systems that the system was to be used in an educational institution that had
classes with 100 students, however, still the quality of the sound system must be of
acceptable nature. Thus, the quota that is provided of the sound system was not
acceptable and thus there is breach of section 54;
ii. Also, the purpose for which the system was generally acquired is to use the sound of
the system. But the sound is too low and thus there is breach of section 55 of the Act;
iii. It was represented by High Five Systems that the sound system is a boost system
which is false and thus there s breach of section 18 and 29 of the Act.
The exclusion clause that was made part of the document has no relevance as per 64A of the
Australian Consumer Law No consumer guarantees can be excluded with the help of any
exclusion clause.
Conclusion
Thus, there are several implied warranties that are violated. Also, the exclusion clause has no
relevance. Thus, Brian can sue the seller and the manufacturer both.

8
Bibliography
Articles/Books/Journals
Li, Enshen, Business and Corporate Law (Second Edition), (Thomson Reuters: Pyrmont, NSW,
2017).
Latimer, Paul , Australian Business Law 2012, (CCH Australia Limited, 2012).
Case laws
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
David Jones v. Willis (1934) 52 CLR 110.
Entores v Miles Far East Corp [1955] 2 QB 327.
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (NSW) (1988) 14 NSWLR 527.
Felthouse v Bindley (1862) EWHC CP J 35.
Grant v Australian Knitting Mills (1935)
Hyde v Wrench [1840] EWHC Ch J90 .
Grant v Australian Knitting Mills (1935)
Smith v Hughes (1871) LR 6 QB 597.
Partridge v Crittenden [1968] 1 WLR 1204.