Law of Commerce

This document discusses legal issues related to commerce and business law. It covers topics such as contract terms, unconscionable conduct, and the United Nations Convention on Contracts for the International Sale of Goods.

Running head: LAW OF COMMERCE
Law of Commerce
Name of the Student
Name of the University
Author Note

1LAW OF COMMERCE
Answer 1
Issue
The present issue is whether Mr Twaddle can hold PipPop to the verbal statement of the
sales representative.
Rule
Under the common law, the statement with respect to a term of the contract is based upon
certain influences. These influences may include importance that the statement has pertaining
to the contract, the time lapsed between the creation of the contract and the making of the
statement, the understanding and the competence of the parties and the doctrine of parole
evidence.
When a statement carries a great significance with respect to the contract it needs to be
construed to be a term of the contract. A statement has a better chance of being a term if the
time between the creation of the contract and the statement has been less. If the person to
whom the statement has been made has a better knowledge than the person making the
statement would be construed as a representation. The same can be illustrated with the case of
Oscar Chess v Williams (1957) 1 WLR 370. Under the doctrine of parole evidence, a
statement which has not been incorporated within the contract, cannot be treated as a term but
needs to be construed as a representation.
However, the scope of parole evidence can be limited by the collateral contracts and the
same can be illustrated with the case of Van Den Esschert v Chappell [1960] WAR 114.
Collateral contracts are created by promissory statement made by the offeror not
contradicting the contract and consideration extended by offeree with respect to the same.

2LAW OF COMMERCE
Application
In the present case, Mr Twaddle is a businessman and is looking to purchase a new
printing machine which will be able to output more than 10,000 sheets of paper per day. He
contacts PipPop Ltd (PipPop), the largest company in Warrnambool that, among other
businesses, manufactures printing machinery. PipPop’s sales representative suggests the
Speedway machine, which she says, in her opinion, should be able to output 15,000 sheets
per day. Based on that statement, Mr Twaddle bought the Speedway machine and secures
several large printing jobs, which require him to be able to print between 12,000 and 15,000
pages per day. This can be construed to be a term of the contract as the opinion of Mr.
Twaddle has been based upon the same and moreover, PipPop has better knowledge in this
case than Mr. Twaddle.
Again, once it is in use, the Speedway machine is only able to print 10,000 pages per day.
Mr Twaddle contacts PipPop to obtain a refund. PipPop deny any liability and point to their
written contract, which states that the printing capacity of Speedway is 10,000 pages per day.
This can be limited by parole evidence as it has been expressly mentioned in the contract.
Conclusion
Twaddle does not have the entitlement to take legal action against PipPop.
Answer 2
Issue
The issue in the present case is whether Mr. Twaddle has a strong case against PipPop for
unconscionable conduct.

3LAW OF COMMERCE
Rule
There has not been any universally accepted definition of the term unconscionable
conduct. It has been contended by the court in the case of Commercial Bank of Australia Ltd
v Amadio [1983] HCA 1, that the definition of the same is required to be determined
considering the circumstances of the parties. One of the illustrations with respect to
conscionable conduct can be pertained to economic duress. Harsh and oppressive conduct is
to be construed as a unconscionable conduct. Mere unfair conduct cannot be treated as
unconscionable conduct, the element of harshness is required to be present. This can be
illustrated with the case of Australian Competition & Consumer Commission v Renegade
Gas Pty Ltd (trading as Supagas NSW) [2014] FCA 1135.
Application
In the present case, Mr Twaddle decided to acquire a sushi bar business. He borrowed
heavily to purchase the business. The business was located in the premises leased from the
landlords, who happened to be PipPop. The lease of the premises was due to expire but it
contained an option to renew, which Mr Twaddle knew about. Nevertheless, after Mr
Twaddle took over the business from the seller of the sushi bar, he failed to exercise the
option to renew the lease. As a consequence, he was left with the prospect of substantial loss.
PipPop initially refused to extend the time for the exercise of the option. However, after
negotiations, PipPop agreed that they would extend the option for a sum of $50,000. Mr
Twaddle made the payment in protest and then renewed the lease. Owing to these facts, it
needs to be stated that the acts of PipPop needs to have created a considerable amount of
losses to Mr. Twaddle. Harsh and oppressive conduct is to be construed as a unconscionable
conduct. Mere unfair conduct cannot be treated as unconscionable conduct, the element of
harshness is required to be present. This can be illustrated with the case of Australian
Competition & Consumer Commission v Renegade Gas Pty Ltd (trading as Supagas NSW)

4LAW OF COMMERCE
[2014] FCA 1135. This present sitiation cannot be construed to be harsh and the same cannot
be treated as to be an Unconscionable Conduct committed by PipPop.
Conclusion
Mr. Twaddle does not have a strong case against PipPop for unconscionable conduct.
Answer 3
1.
The international convention will applicable to the contract for the sale of printers to
UltraPrint is the United Nations Convention on Contracts for the International Sale of Goods.
It is also termed as the Vienna Convention and has been instituted on 11th of April in the year
1980. It has been enforced on the 1st of January 1988. As in this case the parties belongs to
Australia and Singapore and they are signatories in that conventions, this will be applicable.
2.
The issue is to assess the applicability of the United Nations Convention on Contracts for
the International Sale of Goods in the contract between the parties. Article 1 of the United
Nations Convention on Contracts for the International Sale of Goods requires the parties to
the agreement to be belonging to the signatories of the convention. In this case, the parties
belonged to the Australia and Singapore and both are signatories. Article 2 of the convention
requires the agreements to be of commercial nature and not domestic or personal. This
condition is also met in the present situation. Hence, the convention would be applicable.
3.
The issue is PipPop can exclude the application of the Convention, or at least vary the
effect of its provision. Article 6 of the United Nations Convention on Contracts for the
International Sale of Goods confers the contracting parties to exclude the application the

5LAW OF COMMERCE
same and also alter the application of the same as provided under Article 12. Moreover, an
agreement can be amended by virtue of Article 29. However, this can only be availed if a
declaration has been made in pursuance of Article 96. In this instance, PipPop belongs to
Australia where verbal agreements are valid and not declaration with respect to Article 96 has
been effected. Hence, application of the convention can be excluded.
4.
The issue is whether PipPop can take its time to manufacture the printers as the contract
did not stipulate the date of delivery. Under the convention, by virtue of Article 33 the
delivery with respect to the goods is required to be made either within the time stipulated in
the agreement and in the absence of the same, any time, which seems reasonable. The term
reasonable is to be construed from the circumstance of the case. Hence, in this case the
delivery of the goods is required to be made within reasonable time.

6LAW OF COMMERCE
Reference
Australian Competition & Consumer Commission v Renegade Gas Pty Ltd (trading as
Supagas NSW) [2014] FCA 1135
Commercial Bank of Australia Ltd v Amadio [1983] HCA 1
Van Den Esschert v Chappell [1960] WAR 114
Oscar Chess v Williams (1957) 1 WLR 370
The United Nations Convention on Contracts for the International Sale of Goods