Business Law Assignment: Contract, Advertisement and Consumer Rights

This business law assignment delves into the intricacies of contract law, advertisement regulations, and consumer rights within the Australian legal framework. The assignment analyzes a scenario involving a party organizer, exploring the formation of a contract, the elements required for a valid agreement, and the consequences of a breach of contract. It examines the rights of a consumer when services are not delivered as promised, referencing relevant legislation like the Australian Consumer Law and the Trade Practices Act. The assignment also addresses the legal obligations of advertisers, emphasizing the importance of honesty and avoiding misleading statements in advertisements. The paper discusses the role of the Australian Competition and Consumer Commission (ACCC) in maintaining fair trade practices and protecting consumer rights, providing a comprehensive overview of key legal principles and their practical application in the business context. The assignment also includes the court case of Jarvis versus Swans Tours and its impact on consumer rights.

BUSINESS LAW ASSIGNMENT
Student’s Name
Course ID
Date

Student’s Surname 2
Question 1
a) Explanation of whether the parties had entered into a contract
A contract can be defined as an agreement that is enforced by the law. In other words,
contract can be presented as a set of promise or promises that are legally enforceable by the court
of justice. The Australian Contract Law represents the set of regulations that legally enforced
promises that are made through free bargain between two different parties to form a legal
relationship1. The first answer presents the case scenario between Lianne (Consumer) and Mary
(Seller) to explain whether the parties have legally entered into a contract. Additionally, the
answer discusses the elements of contract, important clauses for making a contract legal and
different case examples in order to know whether both the parties have entered into a valid
contract through email conversation or not.
Issue
In the case of Lianne and Mary, it can be seen that Lianne wants to give a midyear party
to his friends, for which she was searching for a party organizer. On the other hand, when she
contacted Mary over email with all her requirements, she got a quote of $10,000 for 20 people to
conduct the event. However, Lianne felt that the quote is too high and asked Mary for
negotiation. Hence, Mary sent a counter offer of $9,500 which is valid for 7 days. But, Lianne
did not reply over the offer which made the contract incomplete as she did not accept it within
the valid period.
1 "Australian Contract Law | Julie Clarke", Australiancontractlaw.Com, last modified 2017, accessed September
2017, https://www.australiancontractlaw.com/law/formation.html.

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Later on, when Lianne again asked Mary for the same party on 20th June, the offer got
invalid and Mary sent a new offer with increased cost at $10,000. This time Lianne accepted the
offer, but her acceptance was not considered by Mary and she was unable to send a confirmation
mail. However, within 30 minutes, Lianne changed her mind and said that she wants this deal to
be off. During this period, Mary was unable to send a confirmation mail for the order and no
contract or agreement was made between both the parties.
Rule
It is important to understand several necessary elements to form a valid contract. The
major elements of a valid contract include offer, acceptance, consideration, competency and
capacity and written instrument in certain circumstance. Firstly, any one of the party must make
an offer and the second party has the option to either reject the offer or accept it. In the case of
rejection, the second party can send a negotiated offer and the first party has to accept it or send a
counter offer2. An offer until and unless not accepted by both the parties is not considered as a
valid contract. Furthermore, it is important to see whether both the parties have certain mutual
consideration from the offer or not3. For instance, the buyer will be benefited by the product or
service and in exchange the seller will receive the price for the product or service. Additionally,
in order to form a valid contract, the both the parties must have competency and capacity to meet
the terms and conditions of the agreement. A contract made with a minor is not considered as a
valid contract. Finally, in some cases the contract must be formed as a written document properly
legalised by the court to make it valid. A verbal contract in terms of sale and purchase of a
product or service is not considered valid.
2 Robert Duxbury, Contract Law (London: Sweet & Maxwell, 2015).
3 Roger Halson, Contract Law (Harlow: Pearson, 2013).

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In order to make a contract valid through online conversation, it is important for the both
the parties to confirm or accept the offer to make form a legally enforceable agreement4. In other
words, the buyer needs to accept the order of the seller and the seller need to confirm whether the
order with all terms and conditions after the acceptance of the offer by the buyer. If the court
case of Hyde V Wrench (1840) is considered, it can be seen that both the parties do not finally
accept the offer or counter offer that makes the contract void5. In this case, it can be seen that the
seller makes an offer of selling a land for $1,200. However, after the rejection of the offer by the
buyer, the seller sends a counter offer for the same land at $1,000. At first the buyer rejects the
offer and then again accepts it. Hence, it can be seen that the contract is invalid as none of the
parties have finally accepted or send the confirmation of acceptance of the deal. In the same
manner, the cases of Leicester Cirvuits Ltd Vs Coates Brother Plc (2002)6 and GHSP Inc Vs AB
Electronic Ltd (2010)7 were also rejected by the court due to the failure of the formation of
proper contract between the parties.
Application
In all the above cases, the both the parties do not accept or confirms the final acceptance
in written format. The contract or agreement is not formed between the parties that makes the
terms and conditions void and legally unenforceable. In the same manner, if the interpretation
between both the parties is considered incorrect, still yet the contract is not formed as none of the
parties have a written proof of acceptance of the offer and confirmation of the deal by the seller8.
However, in the case of Lianne and Mary, it can be seen that the acceptance of the offer made by
4 R. B Vermeesch and Kevin E Lindgren, Business Law Of Australia (Australia: LexisNexis Butterworths, 2015).
5 Hyde V Wrench, Beav 334 (Rolls Court 1840).
6 Leicester Circuits Ltd V Coates Brothers Plc, EWCA Civ 474 (2002).
7 GHSP Inc V AB Electronic Ltd, EWHC 1828 (2010).
8 Richard Taylor and Damian Taylor, Contract Law (Oxford: Oxford University Press, 2017).

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Lianne was not confirmed by Mary before Lianne refused to proceed with the deal. Hence, it can
be clearly that none of the parties have entered into a contract according to the interpretation of
the events.
Conclusion
On the basis of the above discussion, it can be seen that none of the parties have lawfully
entered into a contract. Lianne has not accepted the offer or counter offer made by Mary. Hence,
there is no chance of accepting the offer later on. However, on 20th June when Lianne sent her
acceptance of the offer, the contract would have been formed if Mary would have sent a
confirmation mail. But, the failure of sending a confirmation mail before the rejection of the deal
has made the contract invalid. Conclusively, it can be seen that both the parties have not entered
into a contract.

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b) Rights of Lianne in case of breach of contract by Mary
The right of the consumer should be known by the customers if they feel that the service
provider is cheating them. In this particular case, assuming a case scenario, the right of the
consumer has been elaborated. Furthermore, the study connects the case scenario with a court
case where the service provider breached the contract and delivered unsatisfactory services to the
consumers. Also, the verdict of the case scenario has been presented in the discussion as well.
Issue
In this particular case scenario, it has been stated that a contract was formed between
Mary and Lianne regarding the Malaysian theme based boat party. The contract was created on
July 30 at a price of $9,500. On the event date, Lianne has discovered a number of negatives in
the provided services. For instance, the food supplied by Mary was completely different from
which was promised in the contract. In place of Malaysian cuisine, Lianne and her friends were
offered Russian-style food. Also, the accommodation given by the service provider was too
nominal to be precise considering the payment made by the consumer. The boat was not fit for
the number of guests as it was extremely cramped. In such scenario, Lianne complained to Mary
to get the compensation for such poor service.
Rule
Under the Australian Consumer Law, Part V of the Trade Protection Act 1974 (Cth) has
provided to identify the right of the consumers in case of breaching a contract. The Section 52 of
the Trade Protection Act 1974 (Cth) prohibits the service providers to conduct such promises that
can be deceptive or misleading for the consumers9. In case of violation of the agreement,
9 "Consumer Rights", Australia.Gov.Au, last modified 2017, accessed September 2017,
http://www.australia.gov.au/information-and-services/business-and-industry/consumer-rights.

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consumer can file compliant under the law. Under the Section 53(e) of the Trade Protection Act
1974 (Cth), service providers or a company should not mislead the consumer about the price of
an offered service.
Application
In a court case of Jarvis versus Swans Tours, the plaintiff Mr Jarvis had been denied the
services under their service contract. Mr Jarvis booked a skiing holiday package in Switzerland
under the service of Swans Tours following the information brochure issued by the company. In
reality, the plaintiff discovered that the offered services were completely different from what was
in reliance with the contract brochure. Disappointed by the services, Mr Jarvis filed a case
against Swans Tour seeking compensation. Evidently, the court ruled in his favour awarding 125
pounds in compensation against the original tour package price of 63 pounds10. In the same
manner, as Lianne has not received the promised services though an agreement has been made,
she can apply the section to get the compensation under consumer right.
Conclusion
By identifying the rights of the consumer and the legislation to deal with such issue of
breaching contracts, Lianne can file a suitable case against Mary seeking damage compensation.
Clearly, Mary denied the services listed in the contracts and it can be easily considered as a
breach of contract. By filing a court case, the plaintiff can be compensated for the loss of
entertainment.
10 Phil Evans, "Spoiled Holidays: Damages For Disappointment Or Distress", The Tourism Industry 6 (2004): 1-7,
accessed September 2017, http://www.austlii.edu.au/au/journals/LegIssBus/2004/3.pdf.

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Question 2
In Australia, publishment of advertisements in different media such as TV, radio, print, or
the internet has been controlled under the Australian Consumer Law i.e. the Consumer and
Consumer Act 2010 (formerly known as the Trade Practices Act 1974). Advertisement
publishment can be identified as one of the most comprehensive practices in modern trade and
business scenario11. By using a number of advertisement platform, companies offering products
or services through advertisement to reach towards the target demographics. Precisely, the
contents of the advertisement are designed in a certain way that can create a considerable impact
on the mind of the target audience. Hence, by considering the fact honesty and integrity must be
delivered through the advertisements so that consumers should not be trapped. In this study, the
discussion has been made to evaluate that any business advertiser must be careful about the
statement and disclosures made in their advertisement12. Evidently, the business advertisers must
understand that every advertisement delivered to the target market audience should follow the
guidelines and legally ruled developed by Australian courts as well as the Parliament of
Australia. In the meanwhile, the study has been developed ensuring that business advertisers
should have identified the legal obligations of marketing and avoid misleading statements.
The national law of Australia i.e. the Consumer and Consumer Act 2010 is responsible
for fair trading practices and consumer protection. Moreover, the Australian Federal
Government’s agency named the Australian Competition and Consumer Commission (ACCC)
has been authorised to maintain fair trade practices protecting the consumers from any damage13.
11 Jeannie Paterson, "Introducing The New, National Australian Consumer Law", Alternative Law Journal 36, no. 1
(2011): 50-50.
12 "Legal Obligations Of Marketing", Business.Gov.Au, last modified 2017, accessed September 2017,
https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/marketing/legal-obligations-of-
marketing.
13 "Marketing Minds", Marketingminds.Com.Au, last modified 2017, accessed September 2017,
http://www.marketingminds.com.au/regulation.html.

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Furthermore, the regulatory authority has the power to regulate the infrastructural development
of the industry. The Australian Consumer Law has been accountable for almost everything and
anything related to marketplace even the advertisements published by the business advertisers to
promote their products or services. In order to maintain and influence the fair trade policy
protecting the rights of the consumers, the ACCC has published guidelines for advertising and
selling to be read by the business advertisers14. Understandably, such guidelines restrict the
business advertisers to deliver misleading statements about the products and services offered to
the target demographics.
The ACCC has recommended that honest advertisement practices should be followed by
the market advertisers as the Australian Consumer Law is very strict in this regard. Precisely, in
order to promote the advertisement for selling a product or service, the law has provided a
number of regulations to be followed so that consumers’ right as well as fair trade policy will be
upheld15. In the underlying section, a few of the rules have been described as follows:
 Misleading Statement: As per the ACL, the misleading or false statement should not be
promoted through advertisements. The business advertisers must provide accurate
information about the products and services. In case of found guilty, advertisers should
be imposed fines for misleading the consumers16. In case of false statement or content, it
will not matter if the false statement was intentional or unintentional.
 Using Social Media Platform: In case of promoting advertisements in the social media
networking sites such as Facebook, Twitter, and YouTube etc by developing channels,
14 Luke Nottage, "The New Australian Consumer Law: What About Consumer ADR?", QUT Law Review9, no. 2
(2010).
15 Kimberlee Weatherall, "The Consumer As The Empirical Measure Of Trade Mark Law", The Modern Law
Review 80, no. 1 (2017): 57-87.
16 Jeannie Paterson, "Introducing The New, National Australian Consumer Law", Alternative Law Journal 36, no. 1
(2011): 50-50.

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advertisers should be taken the responsibility of providing accurate information and
description of the products. As social media networks directly connect the target audience
with the advertisers, strict advertising guidelines must be followed by the business
advertisers to avoid misconception.
 Managing Online Reviews: Reviews are an integral part of social media ads. Influenced
by the online reviews, target audience has been convinced about the quality of the
products. Hence, the advertisers must identify the fake online reviews should be avoided
to maintain transparency in providing the information.
 Claims regarding the Country of Origin: In most of the product advertisements,
country of origin has been included to create a positive impact on the target audience.
According to marketing regulation provided by ACL, if any advertiser has chosen to
display the origin country of a product or item, they have to meet legal requisites
validating the claim. In case of misconduct, a massive fine will be charged to the
advertiser.
In order to identify what will be the consequences of misleading advertisements, a
summary of the court case between Singtel Optus Pty Ltd and Australian Competition and
Consumer Commission (ACCC) has been presented. In 2012, Federal Court of Australia found
that Singtel Optus Pty Ltd was misleading the target customers through their advertisement
campaign promoting ‘Think Bigger’ broadband data plan. According to the investigation, it was
found that the telecommunication company was misled the consumers by not providing detailed
information about the internet broadband plan. In the corrective process, the lead judge of the
court case found that the misleading information of the ads created a substantial impact of a large

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population. Due to the event, the court imposed a penalty of $3,610,000 on Singtel Optus Pty
Ltd17.
Evidently, misleading or deceptive conduct has become one of the major issues of
concern in modern advertisement. The consumer law in Australia has set several sections so that
the right of the consumers can be protected. The Section 18 of Australian Consumer Law has
provided how to deal with the issue of false or misleading advertisement claims. Hence, the
business advertisers should identify the legislation and the guidelines before promoting any
advertisements. In some of the advertisements, the advertisers have unintentionally delivered
false information that can be costly at the end. Precisely, during advertisement campaigns
efficient use of words should be preferred as words can be misleading to the target audience.
In the case of Singtel Optus Pty Ltd versus Australian Competition and Consumer
Commission (ACCC), the telecommunication company used the word ‘Unlimited Downloadable
Data’ that had become a major setback for the service providers. Mainly, it should be agreed that
honest advertisements must be promoted towards the target audience so that any legal loopholes
can be avoided during ad campaigns. Conclusively, the advertisement creators must carefully
observe the guidelines before promoting an advertisement. Also, a proper disclaimer should be
added to the advertisement so that consumers can get the full details about the product or
services. Thus, honest advertisement will protect the consumer right as well.
17 "Advertising And Selling Guide - Misleading Or Deceptive Conduct", Australian Competition And Consumer
Commission, last modified 2017, accessed September 2017, https://www.accc.gov.au/publications/advertising-
selling/advertising-and-selling-guide/avoid-misleading-or-deceptive-claims-or-conduct/misleading-or-deceptive-
conduct.

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Bibliography
"Advertising And Selling Guide - Misleading Or Deceptive Conduct". Australian Competition
And Consumer Commission. Last modified 2017. Accessed September 2017.
https://www.accc.gov.au/publications/advertising-selling/advertising-and-selling-guide/avoid-
misleading-or-deceptive-claims-or-conduct/misleading-or-deceptive-conduct.
"Australian Contract Law | Julie Clarke". Australiancontractlaw.Com. Last modified 2017.
Accessed September 2017. https://www.australiancontractlaw.com/law/formation.html.
"Consumer Rights". Australia.Gov.Au. Last modified 2017. Accessed September 2017.
http://www.australia.gov.au/information-and-services/business-and-industry/consumer-rights.
"Legal Obligations Of Marketing". Business.Gov.Au. Last modified 2017. Accessed September
2017. https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/marketing/
legal-obligations-of-marketing.
"Marketing Minds". Marketingminds.Com.Au. Last modified 2017. Accessed September 2017.
http://www.marketingminds.com.au/regulation.html.
Duxbury, Robert. Contract Law. London: Sweet & Maxwell, 2015.
Evans, Phil. "Spoiled Holidays: Damages For Disappointment Or Distress". The Tourism
Industry 6 (2004): 1-7. Accessed September 2017.
http://www.austlii.edu.au/au/journals/LegIssBus/2004/3.pdf.
GHSP Inc V AB Electronic Ltd, EWHC 1828 (2010).
Halson, Roger. Contract Law. Harlow: Pearson, 2013.

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Hyde V Wrench, Beav 334 (Rolls Court 1840).
Leicester Circuits Ltd V Coates Brothers Plc, EWCA Civ 474 (2002).
Nottage, Luke. "The New Australian Consumer Law: What About Consumer ADR?". QUT Law
Review 9, no. 2 (2010).
Paterson, Jeannie. "Introducing The New, National Australian Consumer Law". Alternative Law
Journal 36, no. 1 (2011): 50-50.
Taylor, Richard, and Damian Taylor. Contract Law. Oxford: Oxford University Press, 2017.
Vermeesch, R. B, and Kevin E Lindgren. Business Law Of Australia. Australia: LexisNexis
Butterworths, 2015.
Weatherall, Kimberlee. "The Consumer As The Empirical Measure Of Trade Mark Law". The
Modern Law Review 80, no. 1 (2017): 57-87.