Legal Analysis of Misrepresentation and Native Title in Australia

Contents
Hypothetical question..................................................................................................................................2
Issue........................................................................................................................................................2
Applicable Law.......................................................................................................................................2
Application of law...................................................................................................................................3
Conclusion...............................................................................................................................................4
Short Response Question.............................................................................................................................4
Reference List.............................................................................................................................................6

Hypothetical question
Issue
Whether Karen can terminate the contract with Gym & Tonic, and if she is liable to pay the $100
fee?
Applicable Law
When two parties intent to carry on any kind of contractual statements, then, there are several
negotiations and statements that are exchanged amid the parties which comprise of contractual
terms. It is necessary in law that when the statements are made then the same must be of such
that the same are made with honest intention and must be specified without hiding the truth of
the statement. (Ward, 2012)
Now, when one party to the contract makes a statement of fact to another party with an intention
to induce such party, so, that a contract can be made with him, then, such statement can be
considered as misrepresentation provided that the statement so made must not be true in nature
and this fact must be in the knowledge of the person who was making the statement. The false
statement was made in order to deceive the relying party. It is necessary that the
misrepresentation should not be made part of the contract as contractual term. In the leadin g
case of Smith v Land & House Property Corp (1884) and Beach Petroleum NL v Johnson (1993)
the statement of opinions and future intention was considered as statement of fact. It is
necessary that the relying party must actually rely on the misrepresentation before making a
contract and is held in the leading case of Davies v London & Provincial Marine Insurance
Co (1878). (O'Donovan, 2005)
On such grounds, the relying party has the power to consider the contract as non binding in
nature as the contract is suffered with misrepresentation. The aggrieved party can also seek
damages.
This common law of misrepresentation is now given legislative framework by establishing
provisions under the Australian Consumer Law. Section 18 submits that no person in commerce
and trade must get himself engage in any action of conduct that is misleading and deceptive in
nature. The acts are still considered to be in violation of section 18 if they are also likely to
deceive or misled in any given situation. Section 18 of the ACL deals with misleading and
deceptive conduct and the main elements includes: (Folyes, 2016)
i. The person must be carrying out some conduct in commerce and trade;
ii. Such conduct must have the capacity to deceive or misled on the relying party;
iii. There are chances of likeliness of deception or mislead.
Section 29 of ACL also imposes a prohibition on a person who is engaged in commerce and
trade relating to the supply of services and goods and makes sure that no statements must be

made which are misleading or false in nature which are relating to the novelty of the
services/goods or the style, grade, value, quality, standard, etc and is analyzed in the leading case
of ACCC v Valve Corporation (No 3) (2016). (Corones, 2012)
If there is violation of section 18 or section 29 of ACL, then, the aggrieved party has every right
to sue for:
i. Damages under section 236;
ii. Injunction order under section 232
iii. In case of violation of section 29 of ACL, pecuniary penalties of up to $1.1 million
per offence for a corporation can be attained under section 224 of ACL;
iv. fines can be imposed;
v. Infringement notices can be issued.
Application of law
Karen wises to get fit and thus look for a local gym. She found an advertisement given by Gym
& Tonic. As per the advertisement, there were few claims that were made, however, it is
submitted that the same are found to be in violation of section 18 and section 29 of the ACL.
This is because:
i. It is submitted by the gym that it is offering the services of the gym at a reduced price
of $30 per month in place of original price of $60 per month. It is submitted that the
statement so made was made by the gym during its course of business but the same is
made with an intention to induce the customers so that they took the services of the
gym. A deception is made because one of the friends of Karen, Will, submitted that
the gym has never reduced the price as claimed by the gym. This is because originally
the prince of the gym was $40 and it was never $60. Thus, this depiction is a
declaration of truth which was not true and which was made with the intention to
deceive Karen.
So, there is a clear violation of section 18 of the ACL on the part of gym.
ii. The advertisement of the gym also submits that the access to the gym is unlimited. It
was no where specified that the meaning of unlimited access is only related to entry
to the gym and not to the use of the instruments and machines of the gym. There is
clear violation of section 29 of the Act as a misleading impression is given by the
advertisement because the pictures on the advertisement show that the customers of
the gym are using all the kind of machines of the gym. So, there is clear violation of
section 29 on the part of the gym.
iii. Also, there is clear violation of the common law Principe of misrepresentation as few
statements are made by the owner of the gym through the advertisement which are
made in order to deceive Karen and the like customers so that a contractual
relationship can be established with them, that is, they buy the membership of the
gym.