Business Laws

The assignment content discusses business laws, specifically focusing on consumer guarantees under the Australian Consumer Law (ACL). The first question addresses whether Riviera can claim a refund and compensation from QB4 for faulty Tetra bikes that injured her child. It is concluded that Riviera has a right to claim under the rules of consumer guarantees. The second question explores whether PMSC can terminate a contract through frustration, citing examples such as Taylor v Caldwell (1863) 3. It is concluded that PMSC can terminate the contract and Nicky is entitled to receive compensation of $800.

Running head: BUSINESS LAWS
Business Laws
Name of the student
Name of the university
Author note

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BUSINESS LAWS
Question 1
Issue
The issue in this case is determine the legal position of Riviera in relation to QB4 or Tetra bikes with
respect to the Consumer Guarantees under the Australian Consumer Law
Rule
The Australian Consumer Law is provided in Schedule 2 of the Australian Competition and Consumer
Commission 2010 (Cth).
The law is applicable on all business transactions in Australia which have a value of below $40000.
However on products which have the value of more than $40000 the ACL is applicable in case such
products have been purchased solely for domestic and household purposes.
As provided by the ACL products and services when purchased have implied guarantees that they would
be in accordance to what have been asked for or what is generally expected from the products. In case
such implied guarantees are not present in relation to goods and services the customers can exercise
their consumer rights.
Under Consumer Warranties a product must be that of an acceptable quality, must look acceptable and
must be in relation to what is reasonable expected from them. The goods have to be appropriate for the
use they were requested for. All extra promises made along with the goods also have to be met by the
sellers.
It is expressly provided by the ACL that any attempts by a seller to not include consumer warranties in a
contract are regarded as void. The failure by a seller to repair or replace the goods, not providing cost of
replacement or equivalent goods or not providing payment for repairs is regarded as an attempt to
restrict the liability for consumer guarantees.
In the case of Campbell v Lane (No 2) [2013] QCATA 307 it was ruled by the court that the goods sold by
a seller have to be reasonably fit for the disclose purpose. If the words are not fit for the purpose which
have been discussed by the buyer while purchasing the words it would be a breach of consumer
guarantees and the buyers would be entitled to compensation.
In the case of Norman Enterprises Pty Ltd Leimo Australia v Deng [2013] QCATA 047 it was provided by
the code that the inclusion of an exclusion clause into a contract with restrict the liability of the trader to
make a refund in relation to the goods was not a valid term of the contract as consumer guarantees
cannot be avoided so the inclusion of an exclusion clause.
Application
In this case Riviera had clearly provided to QB4 while making the contract that young children are
coming along with her and the company should make necessary arrangements to provide them very
girls which are safe and suitable for them.
However the vehicles which were provided to the children hard faulty brakes and design problems with
respect to the manufacturers Tetrabikes. The vehicle was also not suitable for young children and was
designed for an age group of 12 to 15 years old teenagers. Riviera child Kang was injured because of the
use of such vehicle. Therefore in this case it is clear that the goods provided by QB4 did not match the
requirements which were mentioned by Riviera. In addition her child have suffered injuries. Therefore as
per the rules of consumer guarantees she is entitled to a refund as well as compensation for the injury
caused to her child.

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BUSINESS LAWS
As discussed by the principles in the above case it is clear that an exclusion clause cannot be
incorporated into the contract which has been made to exclude the liability copper cellar with respect to
consumer guarantees. Therefore the exclusion clause which Quad bikes attempted to add into the
contract to evade the liability with respect to damage or loss to the customers would not be held as a
valid term of the contract.
Conclusion
Riviera in this case has a right to claim refund and compensation directly from QB4 Under the rules of
consumer guarantees as provided in the Australian consumer law.

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BUSINESS LAWS
Question 2
Issue
Whether PMSC can claim the contract to be discharged
In case the contract is discharged by frustration what are the rights of Nicky to make a claim for
damages
Law
In certain circumstances a contract is team to be discharged as a super winning situation which is not in
the control of the parties to a contract has occurred. According to the case of Taylor v Caldwell (1863) 3
where there is a contract between Y and Z where Y consents to hire Z’s property on a specific night may
result in a frustrated contract in case because of Fire the property is destroyed before the performance
date of contract arrived.
Only limited circumstances is doctrine of frustration is applicable. In relation to frustration the courts are
mostly and synthetic in case the event would have been anticipated by the parties and the parties may
have taken specific actions against it polka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [I9431 A.C.
32
According to the provisions of common law incase frustration of contract established it results in
automatic termination of the contract no option to discharge or to perform therefore exists at common
law. The loss which has resulted out of such frustration as per the rules of common law lies where it falls
according to Cantiare San Rocco S.A. v Clyde Shipbuilding & Engineering Co. Ltd. (1924) A.C. 226.
In case of frustration of contract the court must be satisfied that there is no provision in the contract
with states that the contract would continue even if such event has occurred.
However there is an exception to the common law rule of frustration provided by the Frustrated
Contract Act 1978 NSW. That states that frustration discharges the promise but only to the extent which
is required to help a claim for damages for violation prior to frustration
Application
In the given Nicky has gone into a contract with PMSC to provide them a Boat which is one of a kind so
that she can take the children to see penguins.
However after two trips it has been provided that as per the new regulations come into effect the boat
has to undergo safety alterations and would not be able to operate for 3 months.
It can be clearly provided that these circumstances beyond the control of both the parties to the
contract as such implementations of laws would not have been forcing by either party to the contract.
Such circumstances it can be provided that PMSC has the right to terminate the contract through the
doctrine of frustration.
In this case Nicky is not entitled to get the money she has paid to PMSC for the contract as she has
already availed to trips. However Nicky according to the above discussed rules is entitled to claim $800
as she has paid $2000 and both the trips only cost $1200.
Conclusion
PMSC can terminate contract through frustration
Nicky is entitled to receive compensation of $800

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BUSINESS LAWS
References
Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [I9431 A.C. 32
Campbell v Lane (No 2) [2013] QCATA 307
Cantiare San Rocco S.A. v Clyde Shipbuilding & Engineering Co. Ltd. (1924) A.C. 226.
Frustrated Contract Act 1978 NSW
Norman Enterprises Pty Ltd Leimo Australia v Deng [2013] QCATA 047
Schedule 2 of the Australian Competition and Consumer Commission 2010 (Cth).
Taylor v Caldwell (1863) 3