Commercial Law Assignment: Contract, Misrepresentation, and SOGA

This document presents a solution to an Australian Commercial Law assignment. Part A addresses the establishment of a new constitution for a society, focusing on decision-making procedures, impartiality, and the three-tier legal system proposed by Professor Hart. Part B examines a contract dispute between Barry and Angelo involving misrepresentation in the sale of a vegetable shop, analyzing the legal principles of misrepresentation, fraudulent misrepresentation, and the remedies available. Part C delves into the application of the Sale of Goods Act (SOGA) 1954, Consumer Act 2010, and Australian Competition laws, focusing on implied terms, remedies for breach of contract, and their application to the purchase of goods. The assignment provides detailed analysis of relevant cases and legal principles to support the arguments and conclusions.

Running head: AUSTRALIAN COMMERCIAL LAW
AUSTRALIAN COMMERCIAL LAW
Name of the Student
Name of the Universities
Author Note

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Part A
Answer 1 (A)
There are several problems which have been identified to resolve the problems between the
members of the society. In order to resolve the dispute, a new constitution has been projected for
the society. The procedure of decision making in the field of law has become the chief rule that
the latest constitution has brought to enhance it1. The decisions which have been previously
proposed was said to be inconsistent and it has been identified in the current situation. The
Constitution that has been proposed recently states that the decisions must be reliable in relation
to the details of the cases must be identical with one another. It has been identified that the
seniors what partial in relation with their own members of the family. There should not be any
kind of partiality or discrimination that has been stated in the new constitution which has
introduced new procedures. The basic rules are the primary rules must be addressed by the
secondary rules that have been given by the latest Constitution that has been proposed. This new
constitution has provided some provisions for the executive and there work is to enforce those
rules that have been proposed by the seniors so that members of the society not disregard the
rules. The Constitution that has been proposed recently contains some provisions for altering the
rules as per the requirement of the society. A process of the amendment can be done to alter the
rules in consideration for the need of the community. This kind of amendments must comply
with the rules of the constitution. This Constitution that has been recently proposed provides a
group of individuals who make judgments known as judges who decide whether a member of the
society is expressive in saying the truth. The three-part legal system or the three-tier legal system
that has been projected by a professor named Hart, states the provision which is in relation to the
1 Bix, Brian. "On the dividing line between natural law theory and legal positivism." Law and Morality. Routledge,
2017. 49-60.

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rule of recognition2. This proposal states that if there is any problem with their primary rules then
it can be improved by the secondary rules. The rules that have been set to change the provisions
in the recent Constitution that have been proposed. There are some powers of the administration
that have been passed over the executive to impose that decision that has been taken by the
decision creators in the tribe. This administration also creates their own judgments that are
needed while working out with their authorities. In a similar way, it has been seen that there is a
close link between the rule of recognition and the rules of change in the recent constitution and
this thing has been pointed out by the professor named Hart.
In the new constitution that has been planned by the members of the society, there are some
requirements of the rules of adjudication that have been introduced. This can only come into
force if the judges who make the decision has the power to make sure that nobody in the society
should take the rules with them and they must also know that decisions must be based on proof
or evidence3. In a similar way, the legal system of Australia has proposed the same thing in their
constitution for the members of the society who include themselves within the society as it has
been proposed in the three paths legal system of the professor Hart4. The existence of common
law is very much important in the constitution so that it can repair the problems that have been
recognized to the statutory laws. By the process of the doctrine of precedent, Australia has the
provision off constantly changing their procedure of making of the decision. In a country like
Australia, every single citizen has been treated equally in the eyes of law. Certain laws must be
prepared by complying them with section 51 of the Australian constitution. If these laws do not
comply their non-validity will be taken into consideration5.
2
3 Gillespie, John. Transplanting Commercial Law Reform: developing a'rule of law'in Vietnam. Routledge, 2017.
4 Green, Michael S. "A Puzzle about Hart’s Theory of Internal Legal Statements." Pragmatics and Law. Springer,
Cham, 2017. 195-221.
5 McKendrick, Ewan, and Qiao Liu. Contract Law: Australian Edition. Palgrave Macmillan, 2015.

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Answer 2
Issue
The issue that has been presented over here is that Barry and Angelo had signed a contract but
there was a misrepresentation of certain terms in the contact.
Rule
The basic argument that has to be done to solve out this issue is that there must be free consent
that is an essential requirement of the contract and especially of misrepresentation. The term
misrepresentation has been defined as a false statement that has been made by an individual in a
contract or an agreement with the other individual. These cannot be considered as the terms of
the contract. It encourages the other party to make another contract. This statement has been
made in the case named Money v Westpac Banking Corporation (1988) ATPR (Digest) 46-0386.
Further, in another case Demagogue Pty Ltd v Ramensky (1992) 39 FCR 317, it has been stated
that the statement or terms in the contract that forms misrepresentation must be false in order to
take actions against them and those facts must not be a normal state. It is said that if a person is
preparing to form a false statement that is in respect with the upcoming situation then this kind of
misrepresentation will not be taken into consideration and there won’t be any actions taken for
such misrepresentation unless and until these terms are formed in a contract.
Adding to it, in the case named Esso Petroleum v Mardon [1976] QB 801, it has been stated that
if there is any law that comes into existence then no actions can be taken against the term. In
another case it was explained that if the term or the statement is true but because of the condition
6 Money v Westpac Banking Corporation (1988) ATPR (Digest) 46-038
7 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

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it got changed or false then it is the liability of that person to give them the information about the
changed term or statement otherwise it will be deliberated as misrepresentation.
According to the case, Lambert v Co-Operative Insurance [1975] 2 Lloyd's Rep 4858 the
statement was made that the capacity of misrepresentation should be as such that it encourages a
person to pursue a contract. The term misrepresentation can only be claimed if the party has
agreed upon to get in a contract. As per the case Car & Universal Finance v Caldwell [1965] 1
QB 5259 it has also been stated that if the party does not carry any information about the term
misrepresentation then the statements in the contract cannot be taken as misrepresentation.
In the field of law, there are three kinds of misrepresentation that have been acknowledged and it
can be categorized as indemnity, damages, and fraudulent misrepresentation. A statement has
been made by the court in the case named Howard Marine v Ogden [1978] QB 57410 that
misrepresentation cannot be claimed if the person has enquired and made the judgment on his
own. However, this regulation cannot be applied in fraudulent misrepresentation.
The term fraudulent misrepresentation can be defined as when a party involves the false
statement intended to make the other person getting engaged in the contract as stated in the case
Edgington v Fitzmaurice (1885) 29 Ch D 45911. Therefore, it is the duty of the court to allow the
parties to give the back the damages that have been caused to them.
Application
The elements to make a contract valid like offer consideration and acceptance is present in the
contract that has been stated in the contract of Barry and Angelo for the purchase of a vegetable
8 Lambert v Co-Operative Insurance [1975] 2 Lloyd's Rep 485
9 Car & Universal Finance v Caldwell [1965] 1 QB 525
10 Howard Marine v Ogden [1978] QB 574
11 Edgington v Fitzmaurice (1885) 29 Ch D 459

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shop12. Angelo made an advertisement and stated that there were no competitors of this business
and the turnover is $20,000 per month. After seeing this advertisement Barry was interested to
buy this shop. However, after the contract was formed between Angelo and Barry it was seen
that there was some false statement that was made in the advertisement and in the contract. The
false statements were that there was no competition around this business and the turnover was
$20,000 per month13. After some days it came to the knowledge of Barry that there was
competition in the same village and the turnover came around to $13,000 per month. With
respect to the test of a material statement, it has been stated that this advertisement can make any
person get in the contract. Thus, by applying this test in the case Derry v Peek (1889)14, it has
been explained that Barry was made to get in the contract. In addition, it was also said that Barry
depended on the advertisement this was made by Angelo to get in the contract to buy the shop.
According to the case of Museprime Properties v Redhill Properties [1990]. The second test of
misrepresentation has been stated. It is rational to mention that Angelo should know that the
competitor is present and about the turnover which he had stated in the advertisement. Angelo
knew that he is making a false statement of the fact that has been mentioned in the contract. The
conduct of Angelo has made a fraudulent misrepresentation that is provided in the provision
stated in the case of Smith v Land & House Property Corp (1884)15. As per the given situation
there are some rights that have been provided to Barry to come out of the contract that has been
made with Angelo. After this, the contract will be considered as void contract according to
Barry. Another right has been provided to Barry that he can claim for damages that have been
12 Pearson, Gail. "Further challenges for Australian consumer law." Consumer Law and Socioeconomic
Development. Springer, Cham, 2017. 287-305.
13 Tonry, Michael. "Fairness, Equality, Proportionality, and Parsimony: Towards a Comprehensive Jurisprudence of
Just Punishment." (2017).
14 Derry v Peek (1889)
15 Smith v Land & House Property Corp (1884)

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made by Angelo as a part of the remedy for fraudulent misrepresentation as provided in the case
of Leaf v International Galleries [1950]16.
Conclusion
To conclude the above-mentioned facts, it can be said that there was a fraudulent
misrepresentation of the facts that were mentioned in the advertisement that was made by
Angelo.
Answer 3
Issue
There are certain rules in SOGA, 1954 that are administered by Consumer Act 2010 and
Australian Competition in Australia. The laws that are stated in the consumer laws can be
applied to those who purchase any domestic product and to that amounts to $40,000. If a person
who purchases the goods within the boundaries of Australia, the SOGA can be applied to them17.
But anything that is purchased not within the boundaries of Australia the consumer laws is not
applicable to them. According to the section 19 of the SOGA, it has been stated that the sellers
are enforced by the implied obligation so that they can give the products that have the reasonable
quality to the purchaser even after there was no agreement for the goods' quality.
Further, it is stated that provisions of the common law legislation, implied terms have also been
added to the contract to assure that operation of the contract is done properly. There are certain
terms that are been discussed and added to the contract. But there are certain terms that have not
been discussed but also be a part of the contract and they are said to be the as fraudulent
16 Leaf v International Galleries [1950]
17 Bridge, Michael G. The International Sale of Goods. Oxford University Press, 2017.

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misrepresentation. These terms that are not discussed are added because it makes the contract
work properly. Certain ways are there to include the implied terms of the contract. According to
the case Commonwealth Bank of Australia v Barker [2013] FCAFC 8318, a statement has been
given that to make the business more productive and efficient, implied terms are induced in a
contract. It has been said that if the implied term is not induced in the contract then it can be
difficult to carry out the contract by the parties to a different level. If the contract has some
customs in the industry then it will be easy to for the contract to have employed terms.
There are various remedies that have been given by the legislation of the common law to those
parties when the contract has been breached. There are certain remedies that are made available
to the party if the contract is breached and they are an injunction, specific performance, damages,
and recession. According to the case Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 15819 it has
been said that it is the duty of the defendant to repair all the damages that have occurred because
of him as he has breached the contract20.
Application
There was a contract that was formed in a written way and both the parties have duly signed it.
There was no lawyer present that time as it was thought by Barry that he did not want any extra
costs21. There were several terms that were incorporated in the contract like a loader and the van
will be given to Barry on buying that shop. After he bought that shop, it came into the note of
Barry that there was no delivery of the van and the loader was not at all working. The van was on
the lease and if Barry wants to use that van, he needs to pay $500 to the person who is the owner
18 Commonwealth Bank of Australia v Barker [2013] FCAFC 83
19 Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158
20 Mar, MaksymilianDel. Legal Theory and the Legal Academy. Vol. 3. Routledge, 2017.
21 Coyle, Sean. From positivism to idealism: a study of the moral dimensions of legality. Routledge, 2017

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of the van. In addition, it has been stated by Angelo that the monthly cost to manage the business
will amount to $8000 but the expenses got increased because of the use of van with sums the
amount to $8500. It is said that when the goods are brought then it is implied that the goods will
be in a proper condition and must be appropriate for the purpose as stated in Doyle v Olby
(Ironmongers) Ltd [1969]22. This implied term is later on maintained by section 19 of the SOGA
1954 and it states that it is contract’s implied term that the loader was given to Barry will be fit
for the use. But the loader came out to be damaged. In fact, Barry can claim for expenses from
Angelo that was incurred for him to fix the loader23.
Conclusion
Barry has the right to claim for the damages with respect to the loader that came out to be broken
and the expenses of the leased van that has occurred to him.
Part C
Script
 Hello Mr Barry. My name is and I am here to advice you about the contract that
you have signed with Angelo.
 I got to know that you had seen an advertisement and it stated that there were no
competitors of this business and the turnover is $20,000 per month.
 After seeing this advertisement you got interested to buy this shop.
 It came to my notice that you did not hire any lawyer so that there is no additional cost
that can be gained by you.
22 Doyle v Olby (Ironmongers) Ltd [1969].
23 Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials.
Wolters Kluwer Law & Business, 2016.

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 It has been stated that the elements to make a contract valid like offer, consideration and
acceptance that has been stated in the contract between you and Angelo for the purchase
of a vegetable shop.
 It also came to my notice that it is rational to mention that Angelo should know that the
competitor is present and about the turnover which he had stated in the advertisement.
 I also got to know that there was a false misrepresentation that was made by Angelo.
 The meaning of false misrepresentation is that the terms that are considered to be wrong
or false are presented in the contract.
 You must know that if there is any law that comes into existence then no actions can be
taken against the term.
 I want to notify you that Angelo knew about the misrepresentation that he has presented
in the contract.
 In addition it can be found by the court that you depended on Angelo on the
representation that has been made by the advertisement so that you can get in the contract
with Angelo to buy that shop.
 You must know that you can sue Angelo if you do not want to get out of the contract.
 However, it has been stated by Angelo that the monthly cost to manage the business will
amount to $8000.
 The expenses got increased because of the use of van with sums the amount to $8500.
 You must know that there are some rights that have been provided to you to come out of
the contract that has been made with Angelo.
 You must consider the contract as the void contract. Void contract means a contract that
carries illegal acts.

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 Another fact that you must know that you can claim for damages that have been made by
Angelo as a part of the remedy for fraudulent misrepresentation.
 The term fraudulent misrepresentation can be defined as when a party involves the false
statement intended to make the other person getting engaged in the contract.
 It was known to me that there was no delivery of the van and the loader was not at all
working.
 I also got to know that the van was on the lease and if you want to use that van, you need
to pay $500 to the person who is the owner of the van.
 You must know that you can claim for expenses from Angelo that was incurred for him
to fix the loader.
 You must also know that you can claim for the damages that have been caused to you by
breaching the contract.
 It must be known by you that there are certain terms that are been discussed and added to
the contract.
 But there are certain terms that have not been discussed but also be a part of the contract
and they are said to be the as fraudulent misrepresentation.
 There are various remedies that have been given by the legislation of the common law to
those parties when the contract has been breached.
 There are certain remedies that are made available to the party if the contract is breached
and they are an injunction, specific performance, damages, and recession.
 It has been said that if the implied term is not induced in the contract then it can be
difficult to carry out the contract by the parties to a different level.

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Reference list.
Bix, Brian. "On the dividing line between natural law theory and legal positivism." Law and
Morality. Routledge, 2017. 49-60.
Bridge, Michael G. The International Sale of Goods. Oxford University Press, 2017.
Coyle, Sean. From positivism to idealism: a study of the moral dimensions of legality.
Routledge, 2017.
Gillespie, John. Transplanting Commercial Law Reform: developing a'rule of law'in Vietnam.
Routledge, 2017.
Green, Michael S. "A Puzzle about Hart’s Theory of Internal Legal Statements." Pragmatics and
Law. Springer, Cham, 2017. 195-221.
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases
and materials. Wolters Kluwer Law & Business, 2016.
Mar, MaksymilianDel. Legal Theory and the Legal Academy. Vol. 3. Routledge, 2017.
McKendrick, Ewan, and Qiao Liu. Contract Law: Australian Edition. Palgrave Macmillan, 2015.
Pearson, Gail. "Further challenges for Australian consumer law." Consumer Law and
Socioeconomic Development. Springer, Cham, 2017. 287-305.
Tonry, Michael. "Fairness, Equality, Proportionality, and Parsimony: Towards a Comprehensive
Jurisprudence of Just Punishment." (2017).

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