Commercial Law Assignment: Contract Validity, Breach, and Remedies

This report provides an in-depth analysis of Australian Commercial Law, specifically addressing contract validity, breach of contract, and available remedies. The report examines a scenario involving misrepresentation in a business contract, exploring the rights and obligations of the parties involved. It delves into the legal principles governing contract formation, including the impact of pre-contractual statements and the application of Section 18 of the Australian Consumer Law (ACL). The analysis incorporates relevant case law, such as Ellul and Ellul v Oakes, to illustrate the application of legal principles. Furthermore, the report discusses the potential actions available to the aggrieved party in the event of a breach of contract, including rescission and damages, referencing cases like Car & Universal Finance v Caldwell and Doyle v Olby (Ironmongers) Ltd. The report concludes by summarizing the key findings and providing a comprehensive understanding of the legal issues presented.

Australian Commercial Law 1
Australian Commercial Law

Australian Commercial Law 2
Table of Contents
Answer to the question no-1.......................................................................................................................2
Answer to question- 2.................................................................................................................................3
Answer to question- 3.................................................................................................................................7
BIBLIOGRAPHY.............................................................................................................................................9
Website...................................................................................................................................................9
Articles.....................................................................................................................................................9
Case laws.....................................................................................................................................................9
Statute.......................................................................................................................................................10

Australian Commercial Law 3
Answer to the question no-1
Constitution summary
In this study, proposal was developed by elders of the tribe which includes the several points that
are incorporated in the constitutions of the tribe.
It addresses the several points and issues faced by tribes which are given as below.
Previous ruling
The Decisions given should be related to the case set up on the basis of previous ruling of the
same case given by designated jurisdiction.
 It must be binding in nature and strengthen the implementation of the decisions and
authority regulations which might result to vigorous punishment if not met.
 There should be proper equality for the applicability of the decision given by the
jurisdiction or authority.
 Provision and rules implemented could be changed as per the related laws and regulation
implemented.
 The entire issued jurisdiction should be binding in nature.
 There should be proper level of binding and should be based on different appeals in the
appealing authorities.
 Each case will go through the different department and authority. For instance, if person
is not satisfied with the jurisdiction one authority then it may go for the second appealing
authority for revision of case. After that, the decision given by the appealing authority
will override the decision given by previous authority.
 All the decisions and jurisdiction passed by the government should be based on the clear,
true and fair evidences. It should be free from all sorts of mistakes and falsified document
otherwise it may result to high amount of loss to the appealing party.
 The decisions of the one court will not contradict with the change in time and will be
subject to
3 legal systems of Hart

Australian Commercial Law 4
There are 3 legal systems of Hart which is based on the three rules by hart and explained as
below
Rules of change- This rule focuses on the permit change in the existing rule for ensuring the
eliminating and modification in the primary rule as per requirement.
Rules of recognition- It provide the foundation of the legal system on which will the legal and
systematic laws will be undertaken. There are mainly two type of rules first is primary and
second is secondary rules. The first one defines the behavior of person in society and second is
related to providing the base for the primary rule. The tribe uses rules of recognition to form
Rules of adjudication- The rule of adjudication focuses on the individual and institutions which
have power to decide whether the person or group of person broke the primary rules and includes
the entire person who is adjudicated. The tribe person considers these rules while farming and
constitutions.
The Australian Legal system and hart’s rule- legal system of Australian recognizes all these three
rules of the hart’s theory. The rules of recognition, rule of adjudication and rule of change. The
Australian legal system accepts the theory of other experts and uses these different theories
including the Hart’s theory to formulate the legal system. It has included all of its rules such as
rules of recognition, rule of adjudication and rule of change in its legal system at various places.
Nonetheless, the parliament has been using the power to frame laws and pass legislation in the
association.
Answer to question- 2
Issue:
Whether it is possible for the Berry to challenge the validity of the contract in context of
declarations made by the Angelo before entering into the contract?
Rule:

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The rules focuses on the right and obligation of the parties in lieu of contract in which they have
entered. The parties to the contracts need to resolute the conflicts with the contracts terms and
legal system. It is observed that while evaluating the contract the terms of the contract needs to
be based on the pre-contractual terms and conditions. The obligation and right of the parties will
also be determined on the basis of the contract formulated. As per section 18 of the Australian
consumer law, if any of the parties contradict the pre-contractual statements then it will result to
breach of Australian consumer law and he has to face the penalties and charges given under act.
By using the oral written contract between the parties it may be hard for the parties to classify the
statements under contract. One party to the contract induced the other party purchase the second
hand computer by making the statement that computer was manufactured in 2012. The contract
had several questions like what will be the output of the contract if breached. What are the terms
and resolving method to solve the problem in contract? What are the contract and non-
contractual outcomes if breached by the parties?
In order to form contract, it is necessary to enter into contract in written and add all the terms and
condition which parties to contracts think fit. It must be ensured that intention to create legal
relation between parties; it is required to determine the objective. The circumstance and other
factors should also be considered while formulating the contract. As per the case law given, the
case given in the case could be understood in better.
Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.1
In the given case, Judge adopted the position to evaluate the case. It is observed that one party
represent the case in negotiation of the contract to act on the basis of representation. The other
party will be bound to act on the contract once he signs the contract.
It is also called prima facia evidence for conducting such representation was intended as
warranty under the contract.
1 Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.

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It also includes collateral, and sufficient grounds were present that parties to contract intended to
act upon the same when party represent their case against other party2.
It is analyzed that pre-contractual contracts divulges the remedies under both common laws and
statutory law which is given under the competition and consumer act 2010. Under the section of
ACL states that any person who is indulged in trade or commerce functioning will not take
action which is misleading or deceptive.
Misrepresentation is considered as false statement related to fact which was made one party to
another party. However, it is not considered as term in the contract but it motivates other party to
enter into contract. The outcome of the misrepresentation of the contract becomes voidable and
resulted to viability of right to the innocent party to cancel the contract, ask for compensation
and claim.
The misrepresentation of the contract covers the following details.
Materiality- Material in nature which misrepresentation made by party to another
Rely- One party relies on the misrepresentation made by one party to another.
Application:
In the given case, Angelo attempts to make different pre-contractual statements for the turnover
of the statement, expenses of business and competitors.
The signing of contract was covered under the misrepresentation. As Barry found the statements
given by Anglo is not true. In this case, Angelo breached the contract under section 18 of the
ACL and shows the misrepresentation of the contract under the same scenario.
There are two main factors on the basis of which this contract could be assessed as
misrepresentation.
2 ACL, Ellul and Ellul v Oakes, (1972) 3 SASR 377, < https://www.australiancontractlaw.com/cases/ellul.html>,
accessed on 1st may 2018.

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Materiality- the Misperception made by one party is false and has no base which resulted to no
material base for the facts. Therefore, the contract entered with other party may result to void on
the basis of misrepresentation.
This could be understood by using the case of Museprime Properties v Adhill Properties [1990]
36 EG 1143.
This case divulges that if party induce another party on the basis of false facts and document
which induce other part to enter into contract then the entered contract would be voidable against
the against aggrieved party.
Reliance- Misrepresented must rely on the misrepresentation made by misrepresentation. Barry
relies on the misrepresentation made by Angelo.
However, contract between the parties is affected by misrepresentation of facts made by Angelo,
because of which contract is not binding4.
Conclusion:
Now in the end, it could be inferred that Angelo divulges the misrepresentation in the entered
contract to Barry. It resulted to Angelo made misrepresentation to enter the Barry into the
contract of purchase of business, and breach section 18 of the ACL. Therefore, Barry can
challenge the validity of the contract. Section 18 of the ACL and shows the misrepresentation of
the contract under the same scenario.
3 Museprime Properties v Adhill Properties [1990] 36 EG 114.
4 ACL, Misleading or Deceptive conduct, < https://www.australiancontractlaw.com/law/avoidance-
misleading.html>, accessed on 1st may 2018.

Australian Commercial Law 8
Answer to question- 3
Issue:
What possible actions are available to Barry in context of breach of contract?
Rule:
It is found that if one person relied on the misrepresentation made by one party to another and
entered into the contract then that contract would be voidable and could be breached under the
two factors named recession and damages.
Rescission: It stands for the setting aside the contract provides the remedy to the aggrieved party
who entered into the contract on the basis of false misrepresentation The main aim of this
remedy is to put the parties back in the original form which reflects the contract entered into the
parties. The injured party may cancel the contract by giving notice to other party.
It could be understood by evaluating the case law of Car & Universal Finance v Caldwell
[1965] 1 QB 5255.
The one party of the contract in this case, cancels the contract immediately after finding the
misrepresentation made by other party in the contract. He canceled the contract by sending
notice to other party to the contract on the following grounds.
He acted unfair
One party was unaware about the misrepresentation
However, if in case, party fails to restore other party in the well condition then in this case, he
will compensate the loss of other party. Contracts could be end by sending the notice and once
other party accepts the same then the contract is terminated.
5 Car & Universal Finance v Caldwell [1965] 1 QB 525.

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Court has discretions to validate the contract of sales even though the consumer already cancels
it under the misrepresentation Act 1972.
Damages: It is alternative remedy to rescission and aggrieved party has right to ask for the
damage or compensation.
In the case law given, Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 1586, In this case, Court
held that the test of deceit law divulges that aggrieved party should be compensated for the
damage made by other party to contract if he had to face loss due to the misrepresentation .
Judge uses his own discretions to determine whether the contract had the misrepresentation made
by other party. However, he could validate the contract if he thinks fit on the basis of factors and
evidences. There are following grounds to validate the sales contracts such as seller had
resembled ground to believe it has true statement. The statement was made by one party to
another and does not have idea about that statement was misrepresentation7.
Application:
As Barry found the statements given by Anglo is not true. In this case, Angelo breached the
contract under section 18 of the ACL and shows the misrepresentation of the contract under the
same scenario. In this case, Barry could take action against such contract.
Barry found the statements given by Anglo is not true so he could cancel the contract under the
breach of section 18 of the ACL and showing that the contract was entered on the basis of
misrepresentation
Conclusion:
In this case, it could be concluded that Barry could cancel the contract on the basis of two facts
such as rescission and damages. He could also ask for damage if he had any loss by entering into
the contract with the Anglo on the basis of misrepresentation
6 Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158
7 Law handbook, Misrepresentation, < https://www.lawhandbook.sa.gov.au/ch10s02s10.php>, accessed on 1st May
2018.

Australian Commercial Law 10
BIBLIOGRAPHY
Website
ACL, Ellul and Ellul v Oakes, (1972) 3 SASR 377, <
https://www.australiancontractlaw.com/cases/ellul.html>, accessed on 1st may 2018.
ACL, Misleading or Deceptive conduct, <
https://www.australiancontractlaw.com/law/avoidance-misleading.html>, accessed on 1st may
2018.
ACL, Terms of contract, < https://www.australiancontractlaw.com/law/scope-terms.html#pre>,
Accessed on 1st May 2018.
Law handbook, Misrepresentation, < https://www.lawhandbook.sa.gov.au/ch10s02s10.php>,
accessed on 1st May 2018.
Articles
Burton, S. J. (1980). Breach of contract and the common law duty to perform in good
faith. Harvard Law Review, 369-404.
Treitel, G.H., 2003. The law of contract. Sweet & maxwell.
Leng, J., and Wei, S. (2017). The Evolution of Contract Law in China: Convergence in Law But
Divergence in Enforcement?.
Carter, J. W., Courtney, W., and Tolhurst, G. (2017). AN ASSIMILATED APPROACH TO
DISCHARGE FOR BREACH OF CONTRACT BY DELAY. The Cambridge Law
Journal, 76(1), 63-86.
Case laws
Car & Universal Finance v Caldwell [1965] 1 QB 525.

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Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158.
Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.
Museprime Properties v Adhill Properties [1990] 36 EG 114.
Oscar Chess Ltd v Williams and Dick Bentley Products Ltd v Harold Smith (Motors) Ltd.
Statute
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
Stone, R., & Devenney, J. (2017). The modern law of contract. Routledge.