HI6027 Business Law: Contractual Issues & Australian Consumer Law

This assignment addresses two distinct legal issues. Part A examines the validity of a land transfer from a grandmother to her granddaughter, Anna, focusing on potential duress, undue influence, and unconscionable conduct. It concludes that the grandmother likely has grounds to rescind the contract due to Anna's actions. Part B analyzes a contract between John, an unemployed young adult, and Brown Suppliers Pty Ltd under the Australian Consumer Law (ACL). The contract involves monthly appliance deliveries with a significant surcharge. The analysis determines this to be an unfair consumer contract term, granting John rights under the ACL to challenge the surcharge. Desklib provides resources like this assignment to aid students in their studies.

Part A

Issue
Whether the transfer of beach by the
grandmother to Anne is a valid contract?

Relevant Law
• A contract is made when there is offers , acceptances, consideration, capacity
and intention of the parties.
A contract can be rescinded by the aggrieved party on the presence of:
• Unconscionable conduct - An act wherein the bargaining powers of the
contractual parties differ, that is, one party is superior from the other party
and indulges in actions that are not in compliance with ethics, morals and
principles and takes gains of his superior position at the cost of the weaker
party.
• Undue influence occurs when the dominant party by taking advantage of his
position makes an influence on the weaker party. The weaker party makes a
contract without using his free will and mind.
• Duress - Duress occurs when the dominant party takes illegitimate actions,
such as, threat on the arrived party body or property and compels him to
establish a contractual relationship.

Application of Law
Anna is aware that Peter (grandson) is going to inherit the beach house of
the grandmother. The grandmother has transferred the land of the beach
in favor of Anna but the transaction is suffered from:
• Duress – Anna over a period of six months has incurred threats on her
grandmother and persuaded her to transfer the land in the name of Anna.
• Anna holds a stronger position because she is aware that her grandmother
is weak, elderly and can eventually be pressured into signing the transfer
even when the grandmother is not aware as what she is signing. Thus, the
acts are suffering from unconscionable actions.
• Anna is sharing the relationship of parent-child with her grandmother and
thus many a times Anna persuaded her grandmother in a soft manner to
convince her grandmother to sign a transfer of land transferring the beach
house to Anna.

Conclusion
Thus, the acts of Anna are carried with
influenced, threat and unconscionable
conduct. Thus, the grandmother has every
right to cancel the contract of the transfer of
land of the beach on favor of Anna.

Part B

Issue
Whether the contract amid John and Brown
Suppliers Pty Ltd is an unfair contract under
the Australian Consumer Law? If yes, then
what are the rights that can be availed by John
against Australian Consumer Law?

Relevant Law
• A contract is considered to be a consumer contract when the person purchases
goods or seek services from the supplier or the manufacturer for the personal
use or for domestic purposes and not for any commercial activity.
• Standard form of contract – as per section 27 (2), when one party frames all
the terms without getting into negotiations with the other party and the only
option that is left to the other party is either to accept the contract pr to reject
the contract, then, such contracts are considered to be standard form of
contract.
• As per section 24 (1) - An unfair term are terms which does not bring balance
amid the rights/obligations of the parties.
• Once a standard consumer contract is framed by the party and such a contract
contains a term that is found to be not fair in nature, then, such unfair term
can be considered as unenforceable in law and thus void in nature.

Application
• John was a school drop out at the age of 14. Now, he is 19 years of age and is
not employed.
• A contract is made amid John and Brown Suppliers Pty Ltd according to which
an electric appliance is given by Brown Suppliers Pty Ltd to John every month
for the next twelve months @ The price along with twenty percent surcharge.
• John is buying the appliance for his own use and thus as per section 23 (3),
the contract by John and Brown Suppliers Pty Ltd is a consumer contract.
• The contract is made by Brown Suppliers Pty Ltd without involving John and
all the terms that are incorporate by Brown Suppliers Pty Ltd are on its own,
thus, as per section 27 (2), the contract is a standard form of contract.
• One of the terms that was made part of this contract was the price that is
charged by Brown Suppliers Pty Ltd is the whole sale price but is exclusive of
twenty percent surcharge. This term is unfair as per section 24 (1) of ACL.

Conclusion
Thus, Brown Suppliers Pty Ltd and John has
established an unfair contract term and the
same was made part of a consumer contract.
Now, as per section 24 (1), John has the right
to not to abide by the said term.