Legal Issues in Business Law

WORD COUNT: 1486
BUSINESS LAW
STUDENT ID:
[Pick the date]

Question 1
Issue
The legal issue of significance is to determine if any of the statements made in the context of
MowMaster 3000 by Effah would be considered as contractual terms or not.
Rule
During the pre-contractual negotiation stage, a host of statements are made by the seller so as
to lure the buyer into entering contractual relations. Some of these may be facts while others
are opinions. The opinions expressed by the seller about the underlying product are
considered as puffery and hence lack legal validity as these are not part of the contract. On
the other hand, the factual statements about the product under sale are considered as
representations. However, not all representations are included in the contract as terms1.
To highlight the underlying conditions necessary to segregate mere representations from
terms,the relevant case law is Oscar Chess v Williams2. This case highlighted that only those
representations can be classified as terms which have a pivotal role in luring the buyer to
make the purchase. Further, there are some representations which are of non-essential nature
and these are categorised as warranty3.
Application
Considering the applicable rule discussed, critical legal analysis of Effah’s statements in the
context of mower can be carried out to determine if any statement is represented in the
contract. There are certain statements made by Effah which would be termed as puffery since
these were mere opinions that were expressed about the product and thereby not may be
valid. An example of mere representation in the context of MowMaster 3000 is that it is
made in Germany using best quality parts. This is not term as it is not an essential
representation for the contract. An apt example of the term from Effah’s statements would be
that blades would not get blunt and cut through anything. This representation is likely to be
pivotal for the decision to buy the mower on the part of Joan since she intended to use it for
cutting grass and the cutting ability of the mower is pivotal.
Conclusion
1 Robert Bryan Vermeesch and Kevin Edmund Lindgren, Business Law of Australia (Butterworths, 2013, 12th edition) 86
2 Oscar Chess v Williams [1957] 1 WLR 370
3 Athule Pathinayake, Commercial and Corporations Law, (Thomson-Reuters, 2014, 2nd edition) 98
2

Considering the statements made by Effah, one representation related to the ability of the
blades being capable to cutting objects without becoming blunt is a contractual term.
Question 2
Issue
The legal issue of significance is to analyse the enforceability of the exclusion clause which
is present at the sales counter of the hardware store.
Rule
An exclusion clause is a contractual term which a given party inserts with the intention to
lower contractual liability that may potentially arise on account of key pre=determined
events. The enforceability of the exclusion clause is contingent on certain factors. In case of
exclusion clause contained as part of a written contract, the signing of the contract by the
parties would imply that exclusion clause is enforceable4. This is irrespective of the fact that
the exclusion clause was read or not by the contracting party as indicated in the verdict of
L'Estrange v F Graucob Ltd5 case.
With regards to exclusion clause that are displayed or contained in a ticket. It is imperative
that reasonable notice need to be provided to the other party so that informed consent on the
exclusion clause can be obtained. If reasonable notice is not provided, then it is possible that
the potential buyers would not be aware of the existence of this clause. However, an
exception to this arises when the customer has been dealing with a given seller since long and
hence it is reasonable to expect awareness about the exclusion clause6. A relevant case
endorsing the above understanding is Balmain New Ferry Co Ltd v Robertson7.
Application
Considering the stated facts, it becomes apparent that the exclusion clause is not part of any
written contract enacted between Joan and the hardware store with regards to MowMaster
3000 purchase. The display of the exclusion clause is at the sales counter of the store.
Assuming that Joan was not a regular customer and therefore was aware about the exclusion
4 Andy Gibson and Douglas Fraser, Business Law (Pearson Publications,2014, 8thedition )87
5 L'Estrange v F Graucob Ltd [1934] 2 KB 394
6 Shayne Davenport, Business and Law in Australia (Thomson Reuters, 2014, 5th edition) 112
7 Balmain New Ferry Co Ltd v Robertson (1904) 4 CLR 379
3