Detailed Analysis: Australian Contract and Consumer Law Issues

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This report provides a detailed analysis of Australian contract law and consumer protection, addressing key issues through case studies. The first scenario examines the formation of a contract, focusing on offer, acceptance, and the postal rule, as well as the implications of an invitation to treat. It explores the liabilities of parties involved in a potential sale of equipment. The second scenario delves into consumer protection, focusing on warranties, guarantees, product defects, and the application of strict liability. It analyzes the remedies available to consumers under Australian law, including compensation, repair, and replacement, while considering the responsibilities of manufacturers and sellers. The report concludes with a comprehensive bibliography of relevant legal resources and case precedents.
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Running head: AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION
LAW
AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
Name of the Student
Name of the University
Author Note
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1AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
Issues:
Whether the mode of communication of the acceptance was mentioned in the offer
letter sent by David to Micheal?
Whether David should have cross-checked with Micheal about the delay in the
acceptance after making the offer?
Whether Micheal should have communicated to David in a faster way than a letter
about the offer of purchase in instalment?
Whether Micheal should have been tried to communicate in another way before
applying for the bank loan?
Whether the mode of payment was mentioned in the offer letter?
Whether David can be held liable under the exceptions of accepting an offer rule in
cases of postal service?
Whether Micheal is liable to any compensation from David for her loss?
Rules:
This case thrives on looking for the impact of offer and acceptance in establishing a
contractual relationship between two parties. This case also discusses scenarios for revocation
of an offer and acceptance.
This case also highlights the scenarios of counter offers and invitation to treat.
Furthermore, this case will argue about the importance of knowledge of acceptance by the
offeror. Further, it discusses the exceptions in cases of acceptance of offer and rejection of an
offer.
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2AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
Analysis:
In this case, it can be seen that David first mentioned in the letter sent to Micheal that
he is interested in selling his equipment at a particular price. As per the Law of Contracts, this
intention to sell off equipment by David cannot be considered as an offer to sell the
equipment but it was an invitation to treat1. The scenarios in cases of offer and invitation to
offer are different in contract laws. Offer is a proposal made to the offerer by the offeree with
the intention to enter into a legal relationship2. In cases of an invitation to treat, a person
shows his or her interest to negotiate a contract. It can be considered as pre-communication
before making an offer. In case of Harver v. Facey3, the Privy Council held that, when the
owner of a particular thing shows his or her interest in selling that thing at a minimum price
or bargained price, he is not making an offer to sell the thing at that price but merely making
an offer to treat or negotiate. In Smith v Hughes 4, the court believed that intention is the most
vital factor in making an offer. In this case, David, in his first letter, expressed his interest to
sell the equipment specifies that Micheal was open to negotiation regarding the offer which
she did by placing the offer to buy in instalments5. However, David revoked the invitation on
16th April. In the case of an invitation to treat, it can be withdraw by the offeror at any time
before its acceptance, and in case it is accepted by the offeree, it is not completed without
proper consideration6. In this case, Micheal accepted the invitation to treat, but the amount
was not decided between them. Therefore, there exists no contractual relationship between
them.
1 Beale, Hugh, et al. Cases, materials and text on contract law. Bloomsbury Publishing, 2019.
2Giancaspro, Mark. "Is a ‘smart contract’really a smart idea? Insights from a legal perspective." Computer law
& security review 33.6 (2017): 825-835.
3 Harvey & Anor v Facey & Ors [1893] UKPC 1
4 Smith v Hughes (1871) LR 6 QB 597
5 Payne v Cave (1789) 3 TR 148
6 Helvacı, İ., Formation of the Contract. In Turkish Contract Law (pp. 3-13). (Springer, Cham, 2017)
.
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3AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
In case of an offer and acceptance, if the offeree made a counteroffer, then the offer
falls7. In cases where an offer is acknowledged in answer to an invitation to treat, the offer
may combine the terms of the invitation to treat. In this case, Micheal’s letter on 2nd of April
will be treated as an offer. In the other argument of applicability of the doctrine of postal rule,
it is only applicable if the offer is acknowledged by post and then the contract comes into
picture at the time of the post of such acceptance to the offerer.8 But there is no such offer in
this case. Nor the offer made by David was such that it could be seen as an implied offer9.
Conclusion:
It can be concluded from the discussion that, in legal parlance, David first made an
invitation to offer which was replied by Micheal with an offer. But the offer did not reach to
David. In between, he sold the equipment to Peter at a higher price. But Micheal, on the
belief of the acceptance of the offer, took a bank loan and sent a cheque to David after the sell
of the equipment. It can be said that David cannot be held liable for damages as there exists
no contractual relationship between David and Micheal.
Scenario 2:
Issues:
What are the remedies available to Jeremy under the consumer protection Law of
Australia?
Whether the rule of caveat emptor is applicable in this case?
Whether the rule of negligence on the part of the manufacturer and seller is applicable
or not?
Whether the rule of strict liability is applicable or not?
7 Hyde v Wrench [1840] EWHC Ch J90
8 Adams v. Lindsell (1818) 106 ER 250
9 Carlill v Carbolic Smoke Ball Company [1892] EWCA 1, [1893] 1 QB 256
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4AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
Rules:
In this case, the Australian Consumer Protection Law is discussed in the context of
warranty and guarantee on consumer products. Also, in which cases warranty and guarantee
is not applicable has also been discussed.
The other factors that are discussed in this case are negligence of the manufacturer
while making any product. The different types of defects and remedies from it under the
Australian Consumer Law has also been discussed in this case. In the case of manufacturing
defect of a product, the rule of strict liability has also been discussed. As the consumer
purchased the product trusting on the words and reviews of the seller, The rule of caveat
emptor has also been discussed in this case.
Analysis:
In this case, Jeremy bought a few products, which turned out to be defective after
installation. When Jeremy made a complaint to the shop from which he bought all the
products, it stated that they could not do anything as the operations of such products were not
warranted and guaranteed10. The same was mentioned in the document which was handed
over to Jeremy during delivery. Jeremy asked for damages for the defective products. Under
the Australian Consumer Law, every manufacturer or seller must guarantee about the safe,
good quality of products. This Further adds that every product must be matched with the
description given by the salesperson or other description written in the brochure. It is the duty
of the seller or the manufacturer to provide reasonable services in emergency cases11. The
installation of any product must be made by a skilled person, so that post-installation the
10 Nottage, L.R.,. Suppliers’ Duties to Report Product-Related Accidents under the New'Australian Consumer
Law': A Comparative Critique. Commercial Law Quarterly, (2011.). 25(2), pp.3-14.
11 Bruce, A., Labelling Illogic: Food Animal Welfare & the Australian Consumer Law. Austl. Animal
Protection , (2012). LJ, 8, p.5
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5AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
consumer does not face any difficulties. In case of non-fulfilment of any such mentioned
duties, the consumer is liable for compensation, replacement or repair in reasonable cases. In
this case, the seller shop refused to act on the complaint of Jeremy, stating that there is no
guarantee or warranty on operations of the product, which is indeed wrong. Right to refund
and replacement of consumer is not applicable cases where the consumer misused the product
or knew about its internal defect from the very beginning. However, a guarantee is not
applicable in case of hidden defects of a product which the manufacturer cannot detect. In
case of a warranty on a product, it is a promise that products are defect-free. Under the
Australian Consumer Law, it is the duty of the supplier or manufacturer to replace, repair the
defective goods. In many cases, items are sold with the warranty against defects. Defects are
of many kinds like manufacturing defects, design defect and warning defect. In cases where
the consumer suffered any damage due to such defect, then the consumer if liable for
adequate compensation.
Every manufacturer owes to its consumer an implied duty to manufacture and sell a
good quality product12. In case a manufacturer fails to obey the duty, he can be tried under the
rule of the negligence of law, especially in cases where the consumer has suffered huge loss
due to the negligence of the manufacturer. In this case, Jeromy has suffered a loss due to the
improper installation of AC by the engineer sent by the AC company and also suffered a loss
due to bad quality of products. Thereby, the AC manufacturing company and Boom company
is liable for damages.
12 Chin, O.T., Geet, O.Y.M. and San, O.T., 2019. MAPPING PRIVITY OF E-COMMERCE CONSUMER
CONTRACTS FOR SALE OF GOODS. ICBEISS 2019 Seri Pacific Hotel, Kuala Lumpur, Malaysia 29 June
2019, p.179.
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6AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
The rule of strict liability states that every manufacturer must take reasonable care
while producing any product so that it does not cause a consumer any injury while using the
same. In this case, every manufacturer is liable for faulty product manufacturing13.
In cases of the seller, it is their duty to maintain good quality and standard of the
products they are selling. A proper inspection of goods before a sale is necessary from the
sellers part14. In this case, the salesman sold the product depending upon the review and claim
of the manufacturer. Hence, One stop shop can be held liable for damages or replacement.
In the case, the application of the rule of caveat emptor is not applicable as the buyer
was unable to see the hidden defects of the manufacturing products15.
Conclusion:
It can be concluded from the above-mentioned discussion that, Jeromy is very much
liable to get remedies in the form of damages, repair or replacement under the Australian
Consumer Protection Law and Law of Torts from the AC manufacturer, the One Stop Shop
and Boom company, who is the microwave manufacturer.
Bibliography
13 José Ganuza, J., Gomez, F. and Robles, M.,. Product liability versus reputation. The Journal of Law,
Economics, and Organization, (2016) 32(2), pp.213-241.
14 Jack, M., Chen, J. and Jackson, S.J., May. Infrastructure as creative action: Online buying, selling, and
delivery in Phnom Penh. In Proceedings of the 2017 CHI Conference on Human Factors in Computing Systems.
(2017). (pp. 6511-6522). ACM.
15Viven-Wilksch, J., The adventures of good faith: can legal history and international developments provide
guidelines for Australia?. Alternative Law Journal, (2015).40(2), pp.89-92.
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A BOOKS
Giancaspro, Mark. "Is a ‘smart contract’really a smart idea? Insights from a legal
perspective." (2017) 33.6: Computer law & security review 825-835.
Beale, Hugh, et al. Cases, materials and text on contract law. (Bloomsbury Publishing,
2019).
Helvacı, İ., Formation of the Contract. In Turkish Contract Law (pp. 3-13). (Springer, Cham,
2017)
Nottage, L.R., Suppliers’ Duties to Report Product-Related Accidents under the
New'Australian Consumer Law': A Comparative Critique. Commercial Law Quarterly,
(2011). 25(2), pp.3-14.
Bruce, A., Labelling Illogic: Food Animal Welfare & the Australian Consumer Law. Austl.
Animal Protection , (2012). LJ, 8, p.5
Chin, O.T., Geet, O.Y.M. and San, O.T., MAPPING PRIVITY OF E-COMMERCE
CONSUMER CONTRACTS FOR SALE OF GOODS. ICBEISS (2019) Seri Pacific Hotel,
Kuala Lumpur, Malaysia 29 June 2019, p.179.
José Ganuza, Juan, Fernando Gomez, and Marta Robles. "Product liability versus reputation."
The Journal of Law, Economics, and Organization 32.2 (2016): 213-241.
Jack, Margaret, Jay Chen, and Steven J. Jackson. "Infrastructure as creative action: Online
buying, selling, and delivery in Phnom Penh." Proceedings of the 2017 CHI Conference on
Human Factors in Computing Systems. ACM, 2017.
Jack, Margaret, Jay Chen, and Steven J. Jackson. "Infrastructure as creative action: Online
buying, selling, and delivery in Phnom Penh." Proceedings of the 2017 CHI Conference on
Human Factors in Computing Systems. ACM, 2017.
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8AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
B Cases
Harvey & Anor v Facey & Ors [1893] UKPC 1
Smith v Hughes (1871) LR 6 QB 597
Payne v Cave (1789) 3 TR 148
Hyde v Wrench [1840] EWHC Ch J90
Adams v. Lindsell (1818) 106 ER 250
Carlill v Carbolic Smoke Ball Company [1892] EWCA 1, [1893] 1 QB 256
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