Detailed Case Study: Exploring Contract Law and Consumer Law Rights

This case study delves into two distinct legal scenarios. The first involves Ronald, a buyer of antique furniture, and Paula, a seller. Ronald relies on Paula's assurance about the age of a desk, which later proves to be misrepresented. The analysis explores Ronald's rights under common contract law, including the parole evidence rule and misrepresentation, and under Australian Consumer Law, focusing on deceptive conduct and acceptable quality. The second scenario examines the relationship between Natalia and Marion, cousins, where Marion promises Natalia a share in her business if Natalia works for her. When Marion reneges on the promise, the analysis considers the enforceability of the agreement, addressing domestic agreements and the principle of promissory estoppel. The study provides detailed legal reasoning and advice for each scenario, citing relevant case law and legislation.

Running head: LEGAL BUSINESS LAW
QUESTION & ANSWER
Name of the student:
Name of the university:
Author note

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Table of Contents
PART 1.......................................................................................................................................2
QUESTION ONE (a).................................................................................................................2
Issue:.......................................................................................................................................2
Rule:.......................................................................................................................................2
Application:............................................................................................................................3
Conclusion:.............................................................................................................................3
QUESTION ONE (b).................................................................................................................3
Issue:.......................................................................................................................................3
Rule:.......................................................................................................................................3
Application:............................................................................................................................4
Conclusion:.............................................................................................................................5
QUESTION 2.............................................................................................................................5
Issue:.......................................................................................................................................5
Rule:.......................................................................................................................................5
Application:............................................................................................................................6
Conclusion:.............................................................................................................................6
Reference:..................................................................................................................................6

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PART 1
QUESTION ONE (a)
Issue:
The main issue of the case is to determine whether Ronald has claimed his rights against
Paula under the common law of contract or not.
Rule:
The min subject matter of the case is based on certain principle of the contract law. Contract
is a legal agreement where certain terms and conditions are included and the parties are bind
by the terms. According to the general rules of contract, if a party has entered into a contract
by misrepresenting any facts and obtaining the signature of the other party; the affected party
can bring an action against the alleged party. Further, the verbal statements have certain
importance where the validity of the written agreement based on those statements. This
principle has been established in De Lasalle v Guildford. This rule is known parole evidence
rule. It has further been made in the Van Den Esschert v Chappell that an oral agreement is
also form part of a written agreement in case the main intention of the contract has been laid
in the oral agreement and the same has not been mentioned in the written contract. In Oscar
Chess v William [1957] 1 WLR 370, it has been mentioned by the court that when in a
contract, a representee has made false statement regarding a thing and the buyer has bought
the thing innocently, the statement of the representee will be known as representation. In case
of any false statement, the affected party can make action for false statements. Apart from
this, where the terms of the contract are unfair and any party take undue advantage from the
contract, the nature of the contract will be suffer from unconscionableness and the affected
party can the contract.

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Application:
In this present case, it has been observed that Ronald buys antique things but has no
knowledge regarding the verification of the real antique piece. He had seen a desk in the shop
of Paula and stated that he will buy the desk if it was 120 years old. Paula had assured him
that the age of the desk is more than 120 years and as Ronald could not verify the reality of
the statements, he had bought the desk on the statement made by Paula. A contract has been
entered in between them where all these verbal implications had not been mentioned. In the
later stage, it has been observed that the desk was not 120 years old and Ronald has to suffer
huge loss. According to the parole evidence rule, it can be stated that Paula is liable to
maintain all the essentiality of the verbal agreements and in case of any failure, she has to
compensate Ronald. In addition, it can be stated that Ronald has been victimised under the
misrepresentation.
Conclusion:
It is therefore advised to Ronald that he can claim compensation from Paula and challenge
the validity of the contract.
QUESTION ONE (b)
Issue:
The main issue of the case is to determine whether Ronald has any rights against Paula under
Australian Consumer Law or not.
Rule:
In case of sales of goods, the rights and interest of the buyer and the seller are secured by the
Australian Consumer law. The main intention of the Act is to secure the common interest of
the buyer and certain provisions have been mentioned in this Act that intends to maintain

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equality among the buyer and seller. According to section 18 of the Act, the seller is
restrained to involve in any misconduct and should not take a part in any deceptive
behaviour. In case, the acts of the seller are falling under this category, the nature of the
contract will be unconscionable and will be void. According to section 20 of the Australian
Consumer Law, if the buyer has any special disadvantage regarding any goods and the seller
is aware of the weakness of the buyer and he takes undue advantage from the weakness, the
contract will make between the parties will be void. According to Australia Competition and
Consumer Law, when a party buys certain things that cost less than $40000 or any goods for
their personal or domestic use, he becomes the consumer and in case his rights and interest
becomes hampering, Australia Competition and Consumer Law will be applied on them to
provide them protection. Further, according to section 54 of the Act, the quality of the goods
should be acceptable in nature and in case of any contradiction, the affected party can claim
for compensation and the alleged party or the seller should have to compensate the buyer.
Application:
In this case, Ronald had mentioned that he has no idea about the reality of the antique goods
and he could not identify them. Therefore, he will be depended on the assurance of Paula.
Therefore, the seller had the knowledge that buyer has certain weak points. In spite of that,
Paula had stated certain wrong facts regarding the age of the desk and sold the goods to him.
After the completion of sale, it has been noticed by Ronald that certain new parts have been
included in the desk that clarify the fact that Paula has given wrong statements to him.
Further, the desk had been bought by Ronald at $25000, which becomes $1000 when the
desk has been verified by valuer. Therefore, it can be stated that Ronald is a consumer under
the law of Australia and the seller had done deceptive conduct to sale the desk to him.
Further, the condition of the desk was not acceptable in nature, as Ronald wants 120 years old
desk and in reality, the desk was not that antique.

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Conclusion:
It can therefore be advised to Ronald that he can claim compensation from Paula under
section 18, section 54 of the Australia Competition and Consumer Law. Further, evidences
can be produced under section 20 of the Act.
QUESTION 2
Issue:
The main issue of the case is to determine whether Natalia can sue Marion under the Contract
law or not.
Rule:
The present subject matter of the case is based on certain landmark judgments of the contract
law. According to the general principle of contract law, no legal obligations could be
established in case of domestic agreement. This principle has been established in the case of
Balfour v Balfour [1919] 2 KB 571. According to this case, where certain promises have
been made by the person of close relation, it does not create any legal obligation. However,
this rule has been rebutted in the case of Merritt v Merritt [1970] EWCA Civ 6 where it has
been observed that legal obligation can be made in between the person with close relation. In
this case, the court has focussed on the intention to create legal obligation and according to
the court, if the parties are willing to create legal relations in between them, the contractual
terms will be binding in nature. Further, it has been mentioned in Wakeling v Ripley (1951)
that where certain promises have been made to create legal obligations between the parties,
any of the parties could not take the plea of domestic nature of the promise afterwards and the
person who made the promise will be compelled to fulfil the promise. Therefore, it can be
stated that the legal obligation can be made in between the persons with close relation if there
is any intention to create legal relationship by the parties. In addition to this, there is certain

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equattable principle of law that will be applicable in this case. Considering the issues and
facts of the case, the provisions of the promissory estoppels will be applied in this case.
According to the promissory estoppels, if any person makes any promise to other person and
that other person has relied on the facts of the promise in such way so that he will face loss if
the promise maker could not fulfil the terms of the promise. This principle has been
established for the first time in Hughes v Metropolitan Railway Co [1877]. It has been
mentioned in that case that the promise maker could not withdraw the contents of his promise
once the other person relied on the terms of the promise. The nature of the promise should be
unequivocal. Further, in Waltons Stores v Maher Marion, it has been held that the promise
maker is obliged to maintain all the contention of the promise.
Application:
In this case, it has been observed that Marion and Natalia is cousin and they are closely
related to each other. However, according to the case, it has been observed that Marion had
promised to Natalia that she will transfer 50% of her business to Natalia if Natalia worked for
her for 2years and Natalia had left everything in Perth to join Marion in Melbourne. Marion
denied transferring the share and pleading that it was a domestic agreement and therefore, not
binding by law. Considering the facts of Merritt’s case, Marion is liable to fulfil the promise.
Further, Marion will be stopped to non-perform her promise.
Conclusion:
Natalia can sue Marion under contract law.
Reference:
Balfour v Balfour [1919] 2 KB 571
De Lasalle v Guildford [1901] 2 KB 215

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Hughes v Metropolitan Railway Co [1877] LR 2 App 439
Merritt v Merritt [1970] EWCA Civ 6
Oscar Chess v William [1957] 1 WLR 370
Van Den Esschert v Chappell [1960] WAR114
Wakeling v Ripley (1951) 51 SR (NSW) 183
Waltons Stores v Maher [1988] HCA 7