Australian Contract & Consumer Law

This assignment delves into the complexities of Australian contract and consumer law through several case studies. Students analyze scenarios involving negligence, duty of care, and rights under the Australian Consumer Law (ACL). They apply legal principles to determine liability, assess damages, and evaluate the applicability of relevant legislation like the ACL.

LAWS20061 Management Law (2017 Semester 2)
Assessment 3- Case Study
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TABLE OF CONTENTS
Question 1............................................................................................................3
Issue........................................................................................................................................3
Rules.......................................................................................................................................3
Applicability of rules..............................................................................................................3
Conclusion..............................................................................................................................4
Question 2............................................................................................................4
Issue........................................................................................................................................4
Rules.......................................................................................................................................4
Applicability of rule...............................................................................................................4
Conclusion..............................................................................................................................4
Question 3............................................................................................................4
Issue........................................................................................................................................4
Rule........................................................................................................................................4
Applicability of rule...............................................................................................................5
Conclusion..............................................................................................................................5
Question 4............................................................................................................5
Issue........................................................................................................................................5
Rule........................................................................................................................................5
Applicability of rule...............................................................................................................6
Conclusion..............................................................................................................................6
References............................................................................................................7
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Question 1
Issue
Herein, the issue can be seen in terms of determining the validity of Agreement. On
understanding whether the contract is valid as signed by Susan.
Rules
It is important to understand the elements of a valid contract:
1. Offer and Acceptance: First and foremost step in creating a contract is through an
offer by one party and acceptance by another. It is important that such an offer and
acceptance must be valid. Since, a contract primary relies on the criteria of the
agreement, the foundation of agreement find its roots through offer and acceptance.
Offer and acceptance together make an agreement.
2. Mutual Consent of Parties: in order to establish a valid contract the parties must
exhibit consensus on the same thing at the same time and in the same senses. There
must be two parties for the formation of a contract that is a promisor and promisee.
3. Intent to create legal obligation: An agreement should validly create a legal
obligation. Other than the offer and acceptance, it is important that both parties have a
legal intent to go to the court of law, in case if the other party doesn’t meet up its
promise (Knapp, Crystal and Prince, 2016). The intention must be to create a legal
relationship with clear and certain terms. An agreement that does not create a legal
relationship is said to be void.
4. Meaning of agreement must be certain: the agreement should be certain or must be
capable of being created certain. In the case where the terms of the agreement are
uncertain, vague or confusing, it will lead to no binding for the parties. Every set of
promises constitutes an agreement. The proposal, as well as acceptance, should be
definite. The acceptance of the proposal must be communicated to the promisor in the
mode as prescribed by the offerer.
Applicability of rules
In case of the first element, it is quite clear that Tom has made an offer to Susan and
she accepted the offer through a valid written agreement. It is noticeable that the signature of
both parties had been taken which makes it legally binding on them. Furthermore, the
intentions were made clear by Tom during the contract to Susan and henceforth cannot be
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expressly declared void in any circumstance. Thus, Tom’s move to offer Susan only
$100,000 to which they have made an agreement is valid.
Conclusion
In the case wherein, Tom makes an offer and Susan accepts the offer it turns out into a valid
agreement, which is signed legally by mutual consent. Thus, as per the Contract law, Tom
content to pay $100,000 is valid.
Question 2
Issue
Whether or not Steve is legally bound to buy the car from Jason
Rules
An offer and invitation to offer are two different terms, which shouldn’t be treated
equally. While an offer is a proposal and an Invitation to offer (treat) is to invite someone
to make a proposal. Invitation to offer requires being understood differently from offer as the
offer will legally bind the person on acceptance and on other hand invitation to treat is merely
an invitation and does not bind legally. In case of an offer, there is intent to enter into a
contract making it considerably certain (Chen-Wishart, 2012). Besides, in case of an
invitation to offer is an act, which further leads to an offer, this is made with an aim to induce
or negotiate the terms. The main element which leads to binding legally is valid acceptance.
Thus, for making a person binding it is necessary to ascertain the elements which should exist
for the formation of valid acceptance:
 Acceptance must be communicated to the offeree.
 Conditions and terms of acceptance must be same as provided in the offer.
 Certainty should exist in agreement.
There must be some initial discussions before the offer is formally accepted. Such
preliminary discussions are known “invitations to treat”. The other names given to such pre
contractual discussions are “requests for information” or “statements of intention”. However,
the invitation to treat is not compulsory to accept, it the parties to contract must not ignore it;
since it may affect the offer in some or the other sense. For example, where an invitation to
treat is made in response to an offer the terms of the invitation to treat must be expressly
incorporated in different terms.
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Applicability of rule
A contract is legally binding only in case voluntary agreement relating to same has
been formed; in which one person makes an offer and other accepts the same. The current
case states about an invitation to offer so made by Steve to Jason on the suitable
modifications it wished for. Herein the offeror i.e., Steve does not make an offer, rather he
invites Jason to make an offer. It only meant to do so for receiving offer and negotiations.
While the offer is quite a specific term as it is meant to create legal relations and is an
essential element for making a contract. On the other hand, Invitation to offer is a stimulus to
instigate the people to make an offer. In the present case, no valid acceptance has been
provided by Jason for making the specified modifications. Further, he was not informed by
Steve that expenditure is being done to make a car in his accordance. Thus, all the elements
of valid acceptance which is necessary for legally binding a person is missing in the present
case. In the present case, the offer of “invitation to treat” is made without any negotiations by
an action. The offer is supposed to be accepted on the terms of the “invitation to treat”.
Conclusion
Thus, in current case Steve is not legally bound to buy a car as offered by Jason as he
had made only an ‘invitation to offer’ and not an ‘offer’ which makes it fundamentally not
legally binding on Steve to make the purchase. Further, Jason expended the amount on his
own anticipation for making the car in saleable condition. He neither asked Steve regarding
the expenditure which was made for making the car as per his choice.
Question 3
Issue
Herein, the issue is whether Harry has any defence to negligence act of Carl.
Rule
Battery tort law - As per the common law, the battery is the tort of deliberately bringing
about an offensive and un-consented harmful contact with a person or with something that is
intimately associated with them. According to some practical examples, a physician may
touch a person, under the defence of necessity, without the consent of the person for the
purpose of rendering medical service to them in an emergency. Similarly, under the defence
of consent, if a person has consented to participate in a contact sport expressly or impliedly,
cannot claim for a contact permitted by the rules of that sport against other participants within
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the duration of play. As per the Civil liability act in case of any loss, there shall be five
principles as mentioned in Perre v Apand Pty Limited (1999) shall be applicable:
1. The duty of Care: this is evaluated on the basis of reasonable forcibility as stated in
the famous case of the Donoghue v Stevenson neighbour principle wherein the pure
economic loss requires the consideration of relationship nature in terms of proximity
(Cornock, 2014). In accordance with the Australian law, duty of care are the legal
obligations which are imposed on an individual who is required to observe the
standard of “reasonable care” while performing any act that is capable of having a
possible stake on others. This standard is the first element which is established for
proceeding with an action in negligence.
2. Breach of Duty: It is seen that the person in such circumstances could have
undertaken precautions. A duty of care imposed by law must be displayed by the
claimant that is breached by the defendant. In turn, an individual who has breached
the duty is subjected to a liability.
3. Indeterminacy of Liability: there is no indeterminacy of liability as the potential
liability is not open-ended. The operation of law between two individuals, who are not
in direct relationship with each other, imposes “duty of care”; eventually the
individuals become related to each other in some of the other manner, as per the
common case law.
4. Causation: As per the common law it is important to acknowledge that the damage
was reasonably foreseeable (Mackaay, 2013). The social contract must be considered
for formalising the duty of care with implicit responsibilities to be conducted by the
individuals towards others living in the society. It is not necessary that a duty of care
has to be defined specifically by the applicable law, though it often arises through the
common law’s jurisprudence.
5. Damage: as a result of an act or any omission the plaintiff had to suffer an injury.
The High Court of Australia has different views from that of the British approach towards
duty of care; the latter still recognizes the element of proximity. The law of Australia first
determines whether or not the case in hand fits in a category where a duty of care has been
found. If the case is out of the range of the established category, it must be foreseeable that
the defendant’s action could harm the society as general. If the case is out of the range of the
established category, it must be foreseeable that the defendant’s action could harm the society
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as general. It is then the Court applies a test of 'salient features' for determining that whether
the defendant is owed a duty of care.
Applicability of rule
In this case, Harry as a duty of care could reasonably foresee the economic loss.
Further, the probability of poor cooking judgement existed as Carl had no knowledge about
sashimi. Later, the causation of health illness to Harry was caused due to the negligent
conduct of Carl but nevertheless, defence of consent is applicable harry could have avoided
the circumstance but he provided consent to the same.
Conclusion
Herein, this regard Harry could have escaped, as there was a probability of risk since Carl
didn’t know how to cook sashimi. Though Carl has proven negligence and led to the damage
conducted against Harry. Yet, as per the volition fit injuria doctrine, Harry could perceive the
reasonable assumption of risk and as such Carl as a defendant can claim its right.
Question 4
Issue
Betty rights under Australian Consumer Law against the apple website
Rule
As per ACL section 56 and 57, all the usual consumer rights are applicable when one
shops with an Australian online business (Coteanu, 2017). This section states that goods must
be in accordance with the cited description either verbally or on packaging or labelling.
Accordingly, it states that the online websites should present no misleading guidelines and
compete fairly on the basis of quality and price. The products of Apple.Inc comes with
guarantees that are not excluded under the Australian consumer law. The person is entitled,
under the law to any replacement or reimbursement for a chief breakdown for any reasonably
foreseeable loss. The company also stands liable to a person who is entitled to get the product
repair or replaced if they fail to meet the standards of acceptable quality if it is not a major
failure. An Apple Limited Warranty is also received by the person when they purchase the
products of Apple hardware with which they can obtain additional benefits on the purchase,
like the optional Apple Care Protection Plan or Apple Care+.
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Applicability of rule
Betty can use her rights to claims for the damages against the online website of Apple
under APL, which serves misleading information as the website, have a good reputation and
misleads by faulty specifications.
Conclusion
In the current case, Betty has the right to claim for her rights against the online website under
ACL as the product so delivered is not as per the specifications so mentioned.
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References
Beale, H., Tallon, D., Vogenauer, S., Rutgers, J. W., & Fauvarque-Cosson, B. (2010). Cases,
materials and text on contract law. Hart.
Chen-Wishart, M. (2012). Contract law. Oxford University Press.
Cornock, M. (2014). The duty of care. Orthopaedic & Trauma Times, (24), 14-16.
Coteanu, C. (2017). Cyber consumer law and unfair trading practices. Routledge.
Knapp, C. L., Crystal, N. M., & Prince, H. G. (2016). Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Mackaay, E. (2013). Law and economics for civil law systems. Edward Elgar Publishing.
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