Misleading Conduct and Contractual Avoidance

This assignment requires the application of Australian consumer law principles to a case study involving misleading conduct by an individual (Don) in their business dealings. The student must analyze the situation, identify the relevant legal provisions, and explain how they apply to the scenario. The assignment also involves referencing relevant court cases, such as Johnson v Buttress and Miller & Associates Insurance Broking Pty Ltd v BMW Australia, to support the analysis. The student's task is to determine whether Don has engaged in misleading conduct and if so, what contractual implications arise from this behavior. The assignment requires a thorough understanding of Australian consumer law, including the definition of misleading conduct, and the ability to apply legal principles to a practical scenario.

Contract law

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
QUESTION 2...................................................................................................................................2
QUESTION 3...................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
A contract is formed where the contractual journey begins and 4 of the basic element to
form a contract are offer, acceptance, consideration and certainty and intention to create legal
relation. All these 4 factors operates together with there distinct rules and make a contract legal
and enforceable by law.
QUESTION 1
Issue: A letter was sent by Sarah to Jacqui in which she offered Jacqui to leave with her
and promised her all the property. Upon this Jacqui sent back the acceptance to Sarah over her
invitation to leave with her in Sydney and started her migration arrangement from France. Does
the letter sent by Sarah is a legal contract between her and Jacqui. And is Sarah is bound by the
promise made by her in the letter to Jacqui.
Law:
The contract law Australia:
To form a legal binding contract there are certain requirements which must be met.
These includes agreement, consideration, intention to create legal relation, capacity to contract
and compliance with formalities.
Agreement: A valid agreement is formed through offer and acceptance. This means
consensus of mind of both the parties where parties agree to the same thing.
Consideration: Consideration is the price that is asked by the promisor in exchange for
their promise and is an essential requirement in Australia before a contract will be binding.
Consequently, gratuitous promises are generally not enforceable.
Legal intention: For a contract to be legally bounding the parties must intent to create
legal relation. In is an independent requirement which must be demonstrate separately for a
case1. The parties under social contract have no intention to create legal relation and there is no
legal intention at the time of entering into agreement.
As in the case of Todd and Nicol, 1957, the defendant offer the plaintiff to live in her
house with no rent and upon this the Plaintiff moved to Australia from her country trusting the
promise made by defendant. Dispute arises between them and defendant asked plaintiff to leave
the house. A case was brought against defendant over formation of contract between them. The
1 Formation of contracts Intention to create legal relations, 2018.
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courts stated that this contract have an agreement but there was lack of flow of consideration
from both sides. Another element of a valid contract that is legal intention of parties was missing.
It was held that there was not a valid contract between parties but the trouble faced by the
plaintiff over selling and moving to Australia is based on goodwill and the intention was legal
during the lifetime of defendant. The decision as given as there has been legal contract between
the parties.
Application:
With application of the rules of contract law it can be started that there was valid
agreement between Sarah and Jacqui. As an offer was made by Sarah to Jacqui to live in her
house. It was readily accepted and communicated by Jaqui to Sarah. With application of the case
ruling of Todd and Nicol, 1957, the case also lacked flow of consideration from both parties and
there was no legal intention on part of both Sarah and Jaqui to make a legal contract2. There is a
lack of elements of valid contract.
Conclusion:
This can be stated that there is no valid contract between Sarah and Jacqui as al elements
of contract formation are not present. Moreover, Jacqui is all set to move to Australia with the
decided case law of Todd and Nicol the agreement can said to be legally enforceable with
creation of legal intention of parties to agreement.
QUESTION 2
Issue: One of the friend of Sarah, Don offered her an option to purchase her three
bedroom apartment at a price of $550000.He set up a meeting with her and gave her a
presentation, dispute of her being said that she do not understand all this, he continues the same.
Moreover, he took sign of Sarah on the letter of his company with name and address of the
company printed on it. He stated that it was an expression latter. Sarah being confused by his
presentation and also was very tried signed the letter of being understanding a mere expression
on her interest to sell her house. After some time Don sent the same letter with her signature of
the sale and purchase agreement and deposited $20% of the total amount in her account. Is there
a valid agreement between Sarah and do. Is she bound to sell her house to Don. What are the
base on which sale can be set aside.
2 [1957] S.A.S.R. 72, Supreme Court of SA
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Law:
Undue influence: is a condition under which a contract was formed and this render a contract
voidable. This occurs when there is inequality of power between the parties to contract which
results in weaker party to enter into contract.
Misrepresentation: An actionable pre-contractual misrepresentation occurs where a
party makes a 'false representation either orally, in writing or by conduct3. The representation is
of one fact rather than actual statement. It is made to the other contracting party and it induces
the contract. Where established the key remedy is rescission and remedy is available with
proving misrepresentation.
As it was stated in the case of Johnson v Buttress, 1936 that undue influence arise when
the relation between the parties4. Such that a party is in position to exercise dominance over the
due to reason of trust and confidence.
Application:
With applying the above rules and case decision of Johnson v Buttress, t can be stated
Don used his position as a friend in the relation with Sarah and forced her to sign the letter of the
company. Sarah did the act as she treated Don. Moreover, there was misrepresentation on the
part of Don as he took sign stating her that is as an expression of sale rather he made a sale deed
of the signed letter pad. Here Don took advantage of her dominant position over the reason of
Sarah's trust and confidence in him, and induce the contract.
Conclusion:
It can be stated that the sale deed made by Don does not caret a legal binding effect as it
was made over undue influence and misrepresentation made by Don. Sarah can be set aside the
deed by proving the facts of undue influence and misrepresentation with applicability of case
ruling of Johnson v Buttress.
QUESTION 3
Issue: Does Sarah have a cause of action against Don to his company But Sell Happy
homes under Equity or consumer law of Australia for the conduct of Don.
Law:
3 Contract law: An introduction to the English law of contract for the civil lawyer ,
Cartwright, (2016),
4 (1936) 56 CLR 113 at 126
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Misleading and deceptive conduct:
Statue law:
Section 18 of the Australian Consumer Law (contained in schedule 2 of the Competition
and Consumer Act 2010(Cth) defines that a person must not engage in such activity and the
remedy for such act is available as contractual avoidance 5. As decided in the case of Miller &
Associates Insurance Broking Pty Ltd v BMW Australia, the former party did not disclose to
BMW that the police taken was neither assignable nor cancellable6. Miller was under misleading
conducts as non disclosure also set aside the legal enforceability of the contract.
Application and Conclusion:
As per the section and provision of consumer law Don was engaged in the act of
misleading practices. Moreover, as per the case of Miller & Associates Insurance Broking Pty
Ltd v BMW Australia, Sarah can being a cause of action of Don and his company to be engaged
in misleading and deceptive practice and set aside the contract and file charges against Don.
5 The Journal of the Commercial Law Association of Australia, Lindgren, (2016).
6 [2010] HCA 31.
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REFERENCES
Books and Journals
Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Lindgren, K. (2016). A time difference between Australia and England: Urban 1 (blonk street)
Ltd v Ayres. Commercial Law Quarterly: The Journal of the Commercial Law
Association of Australia. 30(2), 10.
Online
Formation of contracts. 2018. [Online]. Available
through :<https://www.australiancontractlaw.com/contractlaw/formation-intention.html>.
Todd v Nicol [1957] S.A.S.R. 72, Supreme Court of SA. 2018. [Online]. Available
through :<http://netk.net.au/Contract/Todd.asp>.
Johnson v Buttress, High Court of Australia (1936) 56 CLR 113. 2018. [Online]. Available
through :<https://www.australiancontractlaw.com/cases/johnson.html>.
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA
31.. 2018. [Online]. Available
through :<https://www.allens.com.au/pubs/ldr/foldroct10.htm>.
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