Assignment on Australian Consumer Law

Added on - 09 Oct 2019

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Question 1IssueThere are a number of issues that arise here.a)`The contract was to be signed at 4 pm between Richardson and Fraser based on the offermade by Executive Car Fleets Ltd.b)The moment Richardson met with Mary Jones, he came to know through her that it washighly likely that Fraser was going to be fired by their Managing Director.c)At 4 pm the deal was done between the two despite what had happened earlier. However.d)The next day the very same deal was cancelled by the Managing Director of Speedy AutoHires saying that he had fired Mark Fraser at 2 pm, that is, two hours before the deal tookplace.Lawa)As per the Australian Contract Laws, the essential ingredients of the contract were presentthere because a contract is more than an agreement between two parties1. It had offer andacceptance as well as the intention to make a legally binding agreement. Therefore, on thatcount, the offer is completely valid between the two parties as long as the properunderstanding and consent was involved.b)Richardson was in doubt because he was told by Mary Jones that the MD wants to seeRichardson probably to fire him because of his poor performance. The contract has not yetsigned between the two companies, so they need to remove the doubts if any. As we knowthat the contracts become valid when acceptance is given along with the other party givingstatements to the offer it gets. So, it must be unequivocal as well as communicated to theoffer, otherwise, the law would never deem a party to have accepted the offer just becauseit has not straight away rejected the offer2.c)When the deal was signed between Richardson and Fraser, here we have two possibilities –either Fraser did not know that he was fired or he was deliberately doing that so that hiscompany will incur loss. In any case, if he had been given authority to make the deal.d)When the MD of Speedy Auto Hires called Richardson to inform him about the cancellationof the deal then there is a clear case of miscommunication between the parties. Therefore,as per the sections 18 and 41 of Competition and Consumer Act 20103(Commonwealth) andAustralian Consumer Law, the invitations or offers for the purpose of sale and purchasecannot and should not be misleading or deceptive.1John Carter, "Good Faith In Contract: Why Australian Law Is Incoherent" SSRN Electronic Journal.2Philip Santucci, "Substantive Fairness In Australian Standard Form Consumer Contracts: Lessons From The UKExperience" (2011) 11 Oxford Uni Cwealth Law J.3Richard Whish, Competition Law (Oxford University Press, 2009).
Applicationa)As is clear by the contract law4, that the offer for the contract to purchase 30 MercedesBenz is valid. Because the required components of the valid offer definitely seem to begenuine and there is a presence of the intent to the contract. The offer on the part ofExecutive Car Fleets Ltd has been communicated with terms and conditions. In the case ofvalid offers, there can be different forms of intents involving the course of conduct bystating explicitly. While communicating the offer in writing, the offer must contain specificterms like price, manner of acceptance and timing. So, all of these elements were discussedbetween Richardson and Fraser making it a valid offer for the contract.b)When Richardson came to know that something is brewing in Speedy Auto Hires and thenthere was an element of doubt on his part, yet he proceeded with the contract that wasgoing to be signed between the two. At this point, the provision of negligentmisrepresentation5arises wherein any party to the contract is under a special duty of careto the other party. As the circumstances were such that it was reasonable to rely on thestatement made by Mary Jones and it was less likely that her statement would be false.Therefore, Richardson would have taken the special care in this case. He should havespoken to the ‘buyer company’ as to whether the information was correct or not.Moreover, when Richardson informed his Chief Financial Officer about these developments,he strictly ordered him to go ahead with the possible contract. So, as per AustralianContract Law, here, the course of action has been affected by the undue influence. Theundue influence is carried out by taking unfair or improper advantage created by theweakness of the other party.c)When the contract was signed between Richardson and Fraser then it was done on thebasis of the mutual agreement between the two on behalf of their companies. However,when the contract was signed, Fraser was apparently fired by his MD at 2 pm precisely,while the deal took place at 4 pm. But the two conditions that emerge at this point asmentioned earlier were either Fraser knew that he had been fired and deliberately doingthis to bring harm to his company or he did not know about it at all. Since, thecommunication of the firing of Fraser from Speedy Auto Hires was not mentioned in thescenario, so, it is safe to assume for us that Fraser did not know anything about his firing.Therefore, in such a situation, the contract will be valid.d)Now when the deal was cancelled by the managing director of Speedy Auto Hires, thecontract had been signed till then but just before that MD had fired Fraser. So, technically,before signing the contract, Fraser was rendered no authority to sign it on behalf of4John Carter, "Good Faith In Contract: Why Australian Law Is Incoherent" SSRN Electronic Journal.5Corporations Act 2001 (2016) <>.
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