Analysis of Contract Law and Consumer Guarantees under Australian Law

1
Contents
Question 1.............................................................................................................................................2
PART A.................................................................................................................................................2
Issue A...............................................................................................................................................2
Law................................................................................................................................................2
Application of law.........................................................................................................................3
Conclusion.........................................................................................................................................4
Issue B...................................................................................................................................................4
Law....................................................................................................................................................4
Application of law.............................................................................................................................5
Conclusion.........................................................................................................................................6
Part B.....................................................................................................................................................6
Question 2.............................................................................................................................................7
Issue..................................................................................................................................................7
Law....................................................................................................................................................7
Application of law.............................................................................................................................8
Conclusion.........................................................................................................................................9
Reference List......................................................................................................................................10

2
Question 1
PART A
Issue A
Whether there is a valid contract amid Vincenzo Franco and Scenic Views and can the
contract can be invalidated?
Law
A contract is an accord which is established amid two parties on compliance of its essentials.
The main essential elements required for contract establishment includes: (Latimer 2012)
i. Offer – An offer is the proposal/statement made by the offeror and is
communicate to the offeree specifying the terms which the offeror wants to be
comply with.
ii. Acceptance – The confirmation of the offer terms without any changes is an
acceptance (Latec Finance Ltd v Knight (1969).
iii. Intention- The promises are made with legal intention, that is, in case of dispute
the contract is resolved in the court of law.
iv. Consideration – Anything which has value in law which makes the contract
enforceable (Currie v Misa (1975).
v. Capacity – The parties to the contract must be of sound mind and must be major in
law.
vi. Legality – The contract that is made amid the parties must be legal and not barred
by any law Balfour v Balfour [1919]
The parties when giving their assent to the contract must gave the same genuinely. The
consent is not considered as genuine if it is suffered from:
a. Misrepresentation – A contract is suffered from misrepresentation when the
representor makes a false statement of fact to the representee knowing that the
same is untrue with the intention to influence the representee so that a
contractual relationship can be established amid the two Smith v Land &
House Property Corp (1884). (O'Donovan 2005)
b. Undue Influence – when two parties are in the relationship of trust wherein
the superior party is influencing the weaker party and the weaker party is

3
making the contract with independent and free will, then the contract is
suffered with undue influence Johnson v Buttress (1936). (Enonchong 2006)
c. Unconscionability - when one party to the contract acts against the good
conscience then it is an act of unconscionable conduct. When the dominant
party is at an advantageous position compared with the weaker party and the
dominant party is aware of the disadvantage of the weaker party and he used
the disadvantage for his own benefit, then, such an act of the dominant party is
called an act of unconscionable conduct which can render the contract
unenforceable Commercial Bank of Australia v Amadio (1983).
Application of law
Vincenzo Franco and his family had visited Australia to meet their relatives. They decided to
take a trip to Mount Hotham (Ski Resort) in Victoria. They shortlisted a resort “Scenic
Views”.
A conversation took place amid Vincenzo Franco and Mr George Smith (Marketing
Manager) of Scenic Views.
Mr George Smith gave the details of the hotel booking process. When the negotiation
regarding the price took place, than, Mr George Smith responded $350 per night. The price
per night was inclusive of all other things. Thus, an offer was made by Mr George Smith.
This offer was confirmed by Vincenzo Franco and an agreement was made for the booking of
seven nights.
The promises that are exchanged amid the parties are supported with valid consideration of
$350 per night.
The parties are also major and thus have the power to make a contract.
Both the parties also comprises of legal intention.
But, the main question that lies is whether there is presence of genuine consent or whether the
consent is not free.
It is submitted that the negotiations that are made amid Vincenzo Franco and Mr George
Smith are suffered from:
i. Misrepresentation – It is submitted that are various representation that were made
by Mr George Smith and Scenic Views before a contract was made which are
found to be false and are made to induce Vincenzo Franco so that a contract can
be made amid the two.