Apply Legal Principles in Contract and Consumer Law

Apply Legal Principles in
Contract and Consumer Law

Table of Contents
INTRODUCTION...........................................................................................................................6
MAIN BODY ..................................................................................................................................6
What is the fundamental difference between an agreement and a legally binding contract?.6
Identify four contracts about which a client may seek advice from a financial services
provider. .................................................................................................................................6
Lucy wants to know under what type of circumstances would a private agreement between a
husband and wife be considered contractually binding?........................................................7
What is a 'letter of intent' and in what circumstances are such documents likely to be used?7
In what commercial situation may a client seek a letter of comfort? What three forms may it
take? .......................................................................................................................................8
What is a 'letter of comfort'? Name a commercial situation where 'letters of comfort' are
commonly useQuestion 4.1d..................................................................................................8
What are some of the ways an offer and acceptance can be communicated between the parties
to a contract?...........................................................................................................................8
List some of the ways an offer may lapse..............................................................................8
Is Valentine correct? Give reasons for your answer...............................................................9
ACTIVITY 2....................................................................................................................................9
A minor does not have the capacity to enter into a contract which will be enforceable against
them, except in exceptional circumstances. Why? What are those exceptional circumstances?9
If a person who is intoxicated enters into a contract with another person will that contract
always be voidable by the intoxicated person when they return to sobriety? Give reasons for
your answer............................................................................................................................9
Can Tom recover his $15,000? Give reasons for your answer............................................10
In what relationship does the presumption of undue influence arise?..................................10
What is the definition of a guarantor? What is the legal responsibility of a person who agrees
to be a guarantor on a loan for someone else?......................................................................10
Under what circumstances would you advise your client, the bank, that they could
successfully rely on this guarantee should the young couple default on their loan?............10

Provide Dianne and Tina with your advice about whether there is any action and against
whom they may take it, giving reasons for your answers....................................................11
ACITIVITY 3................................................................................................................................11
Why is it important to identify the ‘terms’ of a contract?....................................................11
Using examples, describe how you would explain to a clienQuestion 4.1t the differences
between conditions and warranties, and why the differences matter?.................................11
How would you explain to a client the effect of a signature on a contractual document? Would
your explanation be different if one of the parties had not bothered to read the terms of the
contract?...............................................................................................................................12
List three contractual transactions which are required by Australian legislation to be recorded
in a written document...........................................................................................................12
Is Rolando correct in his refusal? Give reasons for your answer.........................................12
What is a standard form contract? What is the difference between a commercial standard form
contract and a consumer standard form contract? Use examples to explain your answer.. .13
ACITVITY 4..................................................................................................................................13
In what circumstances can a third party (‘stranger’) to a contract be held liable in the event of
a breach? 'subsist' or cone into existence? How is copyright a valuable asset in business? 13
In certain circumstances, rights can be assigned due to operation of law. List three
circumstances where such project can occur........................................................................13
Sheila wants Bruce to pay back the first two progress claims will she be successful? Give
reasons for your answer........................................................................................................13
What is the purpose of a force majeure clause? Under what circumstances will they apply?14
Explain the matters the court will take into account in assessing the measure of damages they
will award Paige...................................................................................................................14
1. An unforeseen event, the fault of neither party which makes it impossible for the contract to
be performed.........................................................................................................................14
2. A remedy to put the injured party in the position they would have been in if the contract
had been properly performed................................................................................................14
3. A court order preventing someone from performing a specific act..................................14
4. Where one party leads the other party to reasonably believe that they will not be insisting
on strict performance of the agreed terms............................................................................14

1. The concept that provides only the parties to the contract can enforce it........................14
2. A three party agreement whereby the original parties agree to discharge their contract in
consideration of a new contract being entered into between one of the original parties and a
third party.............................................................................................................................15
3. When each party properly performs their contractual obligations and the contract is
discharged.............................................................................................................................15
4. A remedy that restores the parties to their pre-contractual position, nullifying the existing
contract.................................................................................................................................15
ACTIVITY 5..................................................................................................................................15
5.1 Explain the term E commerce?.......................................................................................15
5.2 Are there any exceptions to the type of contracts which can be made electronically?
Explain your answer using examples...................................................................................15
5.3 Heidi has the following questions:.................................................................................15
When making an offer over a website, to whom is the offer being made?..........................15
With what legal requirements must Heidi comply? ............................................................15
5.4 What are the requirements of electronic signatures under the ETA?.............................16
5.5 Explain the use and significance of Australian Business Number Digital Certificates. 16
5.6 List three rules under which domain names are allocated..............................................16
ACTIVITY 6..................................................................................................................................16
6.1Is the contract enforceable? If so, from what point in time?...........................................16
6.2 Has Daniel done anything unlawful?............................................................................16
6.3 Tilly engages Shona as an agent to sell her business to Selva. Is Shona a Party to the
contract to sell the business? Explain...................................................................................17
6.4 Explain how an agency relationship differs from that of an independent contractor.....17
6.5 Which party (agent, principal or third party) would not be held liable for fraudulent
misrepresentations where the agent acted outside their authority?......................................17
6.6 Subsequently Silvio conferred with Joe and agreed to ratify his act. Neither Joe nor Silvio
will pay for the cattle when delivered. Who is liable?.........................................................17
ACTIVITY 7..................................................................................................................................18
7.1 Can omitting to provide information ever count as misleading or deceptive conduct? How
would you explain this concept to a client?..........................................................................18

7.2 Are the complaints of the consumers justified? How would you explain this to your client
and what advice would you give them to ensure they operate in compliance with the ACL?18
7.3 Anthea sold Bob some paper and pens for $65. Anthea did not give Bob a receipt. Has
Anthea done anything unlawful?..........................................................................................18
7.4 What argument could Marc make? Do you think he would be successful?...................18
7.5 Sebastian is going camping in the snow and asks the sales assistant which sleeping bag
would be the best for his requirements. He is advised that the SleepDry bag is the best but in
fact he gets wet and cold while camping. Who would be responsible for his miserable
camping trip: Sebastian, the manufacturer or the sales assistant? .......................................19
Activity 8.......................................................................................................................................19
Have Ting and Chrome done anything illegal? Explain your answer with reference to the
CCA......................................................................................................................................19
Has the Bookworm Bookshop done anything unlawful? Has Harmony Publishers done
anything unlawful? ..............................................................................................................19
Has Penny acted lawfully? Explain your answer.................................................................19
Is this lawful? Why or why not?...........................................................................................19
Explain what is meant by a cartel.........................................................................................20
ACTIVITY 9..................................................................................................................................20
9.1 Has Jacob done anything unlawful ?..............................................................................20
Has Rory fulfilled his obligations as an AFS licensee?.......................................................20
CONCLUSION..............................................................................................................................21
REFRENCS ..................................................................................................................................22

INTRODUCTION
Contract laws are those kind of laws which helps in forming of legal agreement that is
required to be developed within parties. These laws deals over various kinds of rules formed to
make an agreement developed in legal contract. Such laws helps in conducting of activities in
smooth and better manner which are related to an organization. Consumer laws are the laws that
has been formed in order to guide consumer about power withheld by them. This file covers
various questions based on these laws and has to be answered.
MAIN BODY
Question 1.1
What is the fundamental difference between an agreement and a legally binding contract?
Contract law is that kind of agreement which is legally enforceable by law. These laws
has been helping in making an agreement legally valid within the eyes of law. Further they have
been explained as follow:
Offer: This is the idea that has been presented by an party who wants an contract to be
formed. It is very first step that leads over contract formation. Only idea to form an contract is
been presented (Narciso, 2019).
Acceptance: In it offer that has been presented is required to be accepted by the party
this is known as acceptance. It is considered as second step that which makes parties to accept
and form contract. Under it an offer made is required to be accepted by other party going to
come into contract.
Consideration: In this after offer and acceptance is completed the next things that comes
in contract is related to guidelines over which an contract is formed. So, in this all rules and
regulations related to contract is being discussed.
Legality: This means that an contract should be over legal terms and should not violate
any kind of legal norms that has been mention under contract act.
Question 1.2
Identify four contracts about which a client may seek advice from a financial services provider.
Lump Sum Contract: As per this contract an fixed price is setted for an contractor by
the person giving him the contract. The contractor can be an engineer or any person willing to