Case Analysis: Rocky Pop Pty Ltd v Rachael

The case study discusses the issue of an exclusion clause in a contract between Rocky Pop Pty Ltd and Rachael. The company did not inform Rachael about the exclusion clause before enacting the contract, only highlighting it after the ticket was received. This failure to intimate the customer led to the exclusion clause being deemed invalid. Additionally, the company's advertisement did not clearly highlight the refund policy or the absence of Metalurgica band, which could have misled potential buyers. While the company may not have intended to mislead customers, their failure to comply with Australian Consumer Law (ACL) provisions, such as s. 15 and s. 64, may still result in fines and liability for refunds.

Introduction to Law
Contract Law & ACL
STUDENT ID:
[Pick the date]

INTRODUCTION TO LAW
Question 1
Issue
The main issue is to determine the applicability of the exclusion clause in order to defend the
interest of the defendant.
Rocky Pop Pty Ltd is holding a rock concert featuring Metalurgica (most popular heavy
metal band in Australia). In order to promote the same, the company puts up advertisement in
the national newspapers along with internet whereby the ticket price of $ 150 is
communicated and the procedure to claim the ticket is outlined. Further, it is also highlighted
that Metalurgica band would be present. Rachael on seeing the advertisement makes the
online payment of $ 150 and gets the ticket. The ticket outlines the exclusion clause that there
would be no refunds and the company holds no liability if Metalurgica does not turn up due
to any reason. It so happens that before the concert, the Metalurgica band members are
caught in a drug case and hence could not perform at the concert. The company replaced
Metalurgica with another genre band which Rachael did not like and hence demanded refund
before the concert. The company cited the exclusion clause and refused to return the money.
The chances of Rachael succeeding in her refund claim needs to be discussed.
Relevant Rules
Exemption clause may be defined as a contractual term which is incorporated in order to
either exempt a particular contractual party (usually the defendant) from liability or limit the
quantum of liability when a particular event occurs (Carter, 2012). For an exemption clause
to be valid, there are certain pre-conditions that need to be meet which are outlined below.
 It must be communicated to the other party prior to the enactment of the contract
It is imperative for exclusion clause to be enforceable that the party incorporating the same
must make all reasonable efforts to communicate the same or to bring in notice of the other
party so that consent on the same can be obtained. Failure to do so would lead to the
exclusion clause not being applicable (Latimer, 2005). A leading case in this regards is
Thornton v Shoe Lane Parking [1971] 1 All ER 686. In this case , the plaintiff Mr. Thornton
was parking his car in a commercial parking space which made it clear that the owners are
parking the vehicles at their own risk. However, in the process, Mr. Thornton was injured in
the process and claimed compensation. But the owner of the space brought the exclusion

INTRODUCTION TO LAW
clause to the notice of the plaintiff which was printed on the ticket issued. This allowed the
company to escape any liability in relation to injury to the driver. However, this exclusion
clause was not considered enforceable by the court as the ticket was issued was the automatic
dispenser only after the vehicle had been parked. Hence, when the ticket was issued, the
contract was already enacted thus excluding the exclusion clause mentioned on the ticket
from being enforceable (Paterson,Robertson and Duke, 2015). A similar verdict was
highlighted in Olley v Marlborough Court [1949] 1KB 532 where the plaintiff was informed
of the exclusion clause only after the contract was enacted and hence considered non-
enforceable. Hence, it is essential that if the exclusion clause is not explicit, it must be
brought to the notice of the other party before enacting the contract (Lindgren, 2011).
 It has to be legal
If the exclusion clause aims to adversely impact the interest of the consumers, then the same
would not be held enforceable as the objective of exclusion clause is not to provide shield for
the misleading and deceptive action by one of the contractual party (Harvey, 2009).
 In exclusion clauses with regards to protection from negligible conduct, it would be
considered valid only if the any reasonable party on the other side would understand that
the sole purpose of inserting the clause is to protect the concerned party from negligence
conduct. Also, consent needs to be obtained before the contract is enacted (Gibson and
Fraser, 2014).
Application
It is apparent from the given facts that an exclusion clause is present in the given case which
seeks to protect the company (Rocky Pop Pty Ltd) from any liability in case the star band
Metalurgica fails to turn up. In order for this to be valid, it is apparent on the basis of the
relevant rule that the same would need to be communicated to the other party explicitly that
too before the entering of the contract. However, the essential fact to be noticed is that the
exclusion clause was communicated to Rachael only when the physical ticket is received. No
mention of this exclusion clause is there in the advertisement that has been put in the
newspapers and also the internet. Further, the company does not make any attempt to inform
the customer i.e. Rachael about such a condition before enacting the contract. The contract
enactment was completed when Rachael completed the payment and the ticket was
dispatched the company. Based on the above facts, it is apparent that the exclusion clause

INTRODUCTION TO LAW
was highlighted by the company only after contract completion. Also, it needs to be
considered that Rachael’s decision to go to the band was prompted only by the presence of
Metalurgica band and the alternative band arranged by the company is not liked by Rachael.
As a result, based on the verdict in the Thornton v Shoe Lane Parking case and also Olley v
Marlborough Court case, the exclusion clause would not be held valid.
Conclusion
The above discussion of the case clearly reflects the failure on the part of Rocky Pop Pty Ltd
to intimate the customer (Rachael) of the existence of an exclusion clause before the
enactment of the contract. As a result, it would be struck down by the court and the company
would have to refund the $ 150 or ticket money to Rachael. In order to avoid refund, the
company should have included the exclusion clause in the advertisements so as to inform the
customers about the presence of the same thereby gaining their consent.
Question 2
One of the most significant provisions of the Australian Consumer Law with respect to
protecting the interest of the consumers against deceptive and misleading conduct is s. 18. In
accordance with this section, any person involved in any trade or commerce must not indulge
in a conduct which is deceptive or misleading. It is essential that any conduct which
potentially can mislead is also prohibited under this section (Davenport and Parker, 2014).
The contours of application of section 18 are quite broad and tend to include the misleading
advertisements which are given in order to attract more business or to gain competitive edge
but at the expense of the interest of the consumer (Latimer, 2005). This is apparent from the
landmark case Australian Competition and Consumer Commission v TPG Internet Pty
Ltd [2013] HCA 54. In this case, it was clearly highlighted that there is accountability of the
advertisements that are given either in newspaper, internet or any other media. Further, it was
also highlighted that the attached terms to an offer must also be clearly highlighted and only
focusing on the headlines can potentially misguide the customer (Gibson and Fraser, 2014).
In the given case, the advertisement put by the company in the newspaper and internet fails to
highlight the exclusion clause and also the refund policy. However, it is unlikely that even if
the customers along with Rachael knew the same, there decision to purchase the ticket would
alter in any significant manner. Also, on the defence of the company, it is apparent that they

INTRODUCTION TO LAW
are committed on getting the band Metalurgica but their absence is on account of a reason
which is unforeseen by the company as well as the customers. Thus, it does not seem that the
absence of exclusion clause was with an intention to mislead potential buyers of ticket or
could have significantly impacted their decision. Therefore, it does not seem that the
company can be accused of violation of s.15 of Australian Consumer Law (ACL).
In accordance with s. 64 of ACL, irrespective of the direct and indirect terms of contract, the
guarantee of the seller in regards to certain rights cannot be exempted or limited. Further, in
case of display notices which also extend to advertisements, it is expected that only the
provisions outlined in the advertisement with regards to liability may be applicable
(Lindgren, 2011). Clearly, in the given case, the company has failed to mention that the
tickets would not be refundable and also there is no liability in case of band Metalurgica not
turning up. These clauses essentially are aimed at limiting the guarantee of service and right
to refund which are present in the given sales. Hence, these provisions cannot be considered
enforceable and as a result, there is violation of this section by the company due to which fine
may be imposed on the company besides liability to refund the money taken from Rachael.

INTRODUCTION TO LAW
References
Carter, J. (2012) Contract Act in Australia. 3rd edn. Sydney: LexisNexis Publications.
Davenport, S. and Parker, D. (2014) Business and Law in Australia. 2nd edn.. Sydney:
LexisNexis Publications.
Gibson, A. and Fraser, D. (2014) Business Law. 8th edn. Sydney: Pearson Publications.
Harvey, C. (2009) Foundations of Australian law. 3rd edn. London: Tilde University Press.
Latimer, P. (2005) Australian business law. 24th edn. Sydney: CCH Australia Ltd.
Lindgren, K.E. (2011) Vermeesch and Lindgren's Business Law of Australia. 12th edn.
Sydney: LexisNexis Publications.
Paterson, J. Robertson, A. and Duke, A. (2015) Principles of Contract Law. 5th edn. Sydney:
Thomson Reuters