Case Study on Contract Law (Doc)
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Added on 2019-12-18
Case Study on Contract Law (Doc)
Added on 2019-12-18
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CONTRACT LAW
In accordance to the first scenario Rosso, who is residing abroad, enter into a contractwith Sparkles for cleaning the house in the city and in pursuance to the same makes available thekey of concerned place on 15th January 2016. However, after some time when Rosso returns, tohis shock, he finds the entire house in mess. He discovers that the entire place was filed with dustand his belongings were broken into pieces. Apart from others, one of the most valuablepossessions of Rosso, an antique desk, was also found broken. It has been ascertained that thedesk alone shall require repairs worth $10,000. In accordance to the facts it has been ascertainedthat there was a clear breach of contract from the end of service providers. Moreover, anotherissue which is raised in the situation is that Sparkles Ltd. Operated to provide cleaning servicesonly that are elderly and surviving on the basis of pensions. Hence, whether the action ofcompany can be considered as ultra vires to the object mentioned in the memorandum or Rossoshall be entitled to claim damages..In accordance to law, it is stated that the advertisement published by Sparkles wasmisleading and deceptive in nature. In order to establish the nature of misleading it is imperativefor the parties to establish that one of the parties was induced to enter into the contractualrelation on the basis of false impressions. It is an established law that the parties can terminatethe contract if any of the elements of contract are not fulfilled or the parties breach the terms ofthe contract.1 In addition, to these factors there exist various vitiating factors which amount to bea valid ground for avoiding a contract in a lawful manner. Misleading and deceptive practices areone such vitiating factor which allows the aggrieved party to repudiate the contract. Moreover,Australian Consumer Law clearly states prohibitions in respect to the misleading or deceptiveactions of business enterprises. Moreover, the court in Miller & Associates Insurance Broking vBMW Australia Finance stated that silence shall be considered as misleading only in the eventthere arise a duty of disclosure on the concerned party. This doctrine imposes a strict liabilityoffence on one of the parties who has in fact acted in a wrongful manner. Moreover, it has alsobeen held by the court in Perre v. Apand Pty. Ltd (1998) that the intention of conduct shall notmatter as long as there exists scope to protect the interests of the claimant. Hence, if the claimanthas relied on the misleading or deceptive statement/conduct of a corporate and entered into any1Paterson, Jeannie Marie, Andrew Robertson, and Arlen Duke.Principles of contract law. (ThomsonReuters (Professional) Australia, 2012).1
form of relation, then a strict liability shall be imposed on the wrongdoer.2 The primary rationalewhich supports the application of this rule is that any entity making a representation is in ahigher position to know the authenticity of information being represented. In pursuance to thesame, law places complete onus on the person making the representation. It has been opined bycourt in many cases that though this rule is in contradiction to the traditional principle of caveatemptor, it is considered to be more fair and just in nature. Further, in the case of HTW Valuers(Central Qld) Pty Ltd. Astonland Pty Ltd. (2004) it was also established by the court that theclaim under cses of misleading and deceptive conduct shall be allowed only in the instances theclaimant has in fact received quantifiable loss which is economic in nature. In addition, the caseof Butcher v. Lachlan Elder Realty Pty Ltd. (2004) also states that entities shall ensure thatadvertising claims as well as information shall not be in any form misleading or deceptive innature.3 It shall be considered as a clear violation of Section 52 contained in the Trade PracticesAct 1974. In light of the mentioned law and opinion of the court, it can be inferred that the fact thatSparkles published an advertisement which did not clearly mention the fact that the companyoperates only for providing services to elderly persons. Unknown to the fact, Roose relied on theadvertisement and contacted Sparkles for availing the services. At this moment also Sparkles didnot refuse to provide services in accordance to their object of operations, and on the contraryaccepted the offer. Thus, the advertisement published by Sparkles amounted to be a misleadingand deceptive conduct, relying on which Rosse entered into a contractual relation with the entityand made available the key of this empty house for cleaning. In consequence to the same, Rossehas incurred economic losses in terms of broken possessions. Thus, it can be concluded in thecurrent situation that Sparkles was strictly liable under the afore mentioned provisions of law forpayment of damages to Rosse, to the extent of losses suffered by him. In the second scenario, Biff soon after acknowledging the fact that Dennis has a bee avery loyal consumer of Light and Bulb, made a special offer on behalf of Sparkles, to charge anamount of $100 in place of $150 if he signs up for a duration of 2 years. The manner in whichBiff communicated his offer, Dennis erroneously believed that Sparkles had an affiliation with2Furmston, Michael Philip, Geoffrey Chevalier Cheshire, and Cecil Herbert Stuart Fifoot.Cheshire, Fifootand Furmston's law of contract. (Oxford university press, 2012).3Koffman, Laurence, and Elizabeth Macdonald.The law of contract. (Oxford University Press, 2010).2
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