Victoria University Business Law Assignment: Semester 1, 2019

This Business Law assignment, completed for Victoria University in Semester 1, 2019, addresses a case involving Vincenzo Franco and his family's booking at a ski resort. The assignment delves into key legal issues, including the formation of a legally enforceable contract, examining elements such as offer and acceptance, intention, consideration, capacity, and genuine consent. It analyzes the application of these elements to the scenario, focusing on potential misrepresentation by the resort. Furthermore, the assignment explains terms and representations, collateral contracts, and conditions and warranties. The second part of the assignment considers consumer guarantees under Australian Consumer Law, assessing Vincenzo's rights and potential remedies for the resort's failure to meet service expectations. The conclusion finds that Vincenzo can claim damages from Scenic Views and avail the consumer guarantees available to them under the Australian Consumer Law. References to legal texts are also included to support the analysis.

BUISNESS LAW
Victoria University
Business Law
Semester 1, 2019
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Contents
Question 1...................................................................................................................................................3
Issue........................................................................................................................................................3
Rule.........................................................................................................................................................3
Application..............................................................................................................................................4
Conclusion...............................................................................................................................................4
Terms and representations......................................................................................................................5
Collateral contract...................................................................................................................................5
Conditions and warranties.......................................................................................................................5
Question 2...................................................................................................................................................6
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Question 1
(a)
Issue: on the basis of the facts that have been provided in this scenario, the issue arises if the
agreement created between Vincenzo and Scenic Views can be considered as legally enforceable
contract. In order to deal with this issue, the elements that have to be present in case of a valid
contract need to be examined.
Rule: there are certain elements, which should be necessarily present in an agreement so that the
agreement becomes enforceable under the law or in other words, it is a valid contract. These
elements can be described as follows:
Offer and acceptance: in this context an offer is an open call that has been made to the person
who is willing to accept the promise made by the offeror. Usually an offer is made regarding
products and services. It can be said that an offer has been accepted when the other party agrees
that it will be bound by the terms of the agreement and has provided consideration. Therefore,
offer can be described as the promise made by the offeror to the other party, called the offeree.
Intention: the parties should also have the intention that there will be legally bound by that of the
contract.1 In this way, this intention should also be present on part of the parties for the formation
of a legally enforceable agreement.
Consideration: the law of contract provides that consideration is the bargain that is present in the
form of exchange of value among the parties. On the other hand, if consideration is not present,
such an agreement is not enforced by the law. Therefore, such agreement is voidable. However,
certain exceptions are present to the general rule. In this context, the exchange of value has been
1 Antoine Braci, "Contract Law: An Introduction To The English Law Of Contract For The Civil Lawyer" (2015) 26(3)
King's Law Journal.
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interpreted widely.2 Therefore it not only includes money but also covers property or the promise
of doing something.
Capacity: it is also required under the law that the parties entering the agreements should have
the legal capacity to form a contract. In case of the lack of legal capacity, the contract is
considered as voidable. There are certain persons who are considered as not having the capacity
of forming a contract. Such persons include minors, lunatics, under intoxication and insolvents.
It is also required that the purpose of the contract should not be illegal.3
Genuine consent: For creating a valid contract, and among other things, it is also required that
the consent of the parties should be genuine. For this purpose, the principle of consensus-ad-
idem is applicable. The meaning of this principle is that the parties entering into the contract
should mean the same thing and in the same manner.
Mistake: when a party has given its consent to the contract under some misunderstanding, it can
be stated that the content has been given by mistake. Therefore, other than the misunderstanding
of the party it would not have entered into the agreement. In this context a mistake can be of two
types, mistake of fact and mistake of law.
Misrepresentation: representation can be described as a statement of fact, that has been made
with the intention of reducing the other party to form the contract. If the representation turns out
to be untrue, or in other words, it is a misrepresentation, there are certain remedies that are
available to the other party. However these remedies depend on the nature of the
misrepresentation.
Duress: in contract law, Duress is based on the concept of undue influence. Therefore there
should be the use of false imprisonment, force, threats, coercion or psychological pressure for
2 David Echeverry Botero, "Contract Interpretation Law In Australia: It Is A Maze, Not A Straight Way" (2015) 2(41)
IUSTA.
3 Horst Eidenmüller, "Justifying Fair Price Rules In Contract Law" (2015) 11(3) European Review of Contract Law.
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influencing a person to act in a particular manner that is not in the best interests of the person or
to act in the manner in which such person does not want act.
Undue Influence: the relationship between the parties is of such a nature that one party is in a
position to dominate the will of the other party and uses this unfair advantage for achieving the
consent of the other party, it can be said that the consent of the other party has been obtained by
undue influence.
Unconscionability: a contract can be described as unconscionable if it is so one-sided that it will
be unfair for one party and as a result and enforceable. An unconscionable contract is a type of
contract, which allows no meaningful choice to one party, generally due to the major difference
that exists between the bargaining power of the parties.
Application: In this case, Vincenzo Franco and his family had come from Italy to visit their
relatives in Australia. Therefore, they did not speak English very well. Due to this reason they
have problems in understanding the terms and conditions that were related with booking the ski
resort, Scenic Views in Victoria. At the same time, the marketing manager George Smith was not
sure if for Vincenzo was understanding what was being told to him. When the services promised
to Vincenzo were not provided to him, he did not want to stay at the resort and wanted a refund
for seven nights. However, he was told that as per the terms and conditions of Scenic Views
Hotel, he could not get the refund and normally a cancellation fee equal to three nights’
accommodation has to be paid. Under these circumstances, it can be stated that a cause of action
under misrepresentation is available to Vincenzo for the representations made by Scenic View
Hotel
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Conclusion: Therefore, in this case, the conclusion arises that Vincenzo can claim damages from
Scenic Views.
(b)
Terms and representations: A term of the contract is a provision that is a part of the contract.
However, a representation can be described as a statement of fact, and it is not a part of the
contract. Therefore, representation generally does not result in contractual obligations but it may
be considered as a tort e.g., misrepresentation.
Collateral contract: A collateral contract is an independent contract that is orally or in writing.
This contract is made between the parties to a distinct agreement or it may be created between
one original party and a third-party. Generally, a collateral contract is formed between the parties
before or while entering into the original contract. Collateral contracts are generally created
because they carry the terms that are in conflict with the terms of the main agreement; the main
contract was drafted incorrectly; the incorporation of these terms in the main agreement has been
superseded by rules of evidence; a third-party mediator is required for resolving an issue between
the original parties; and the parties are not willing to or not allowed to overstep the privity of the
original contract. Most of the collateral contracts are unilateral. This means that only one party is
making the promise in return of the funds.4
4 Josse Klijnsma, "Contract Law As Fairness" (2015) 28(1) Ratio Juris.
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Conditions and warranties: A condition is a stipulation that is necessary for the main purpose
under the contract. In case of the priest of condition, the other party is allowed by the law to
repudiate the contract.
A warrantee is a stipulation collateral to the main subject of the contract. Hence, in case of a
breach of warranty, a claim for damages can be made, but the other party does not get the rights
to repudiate the contract and reject the goods or services.
Question 2
In the present case, Vincenzo can avail the consumer guarantees that are available to them under
the Australian Consumer Law. The law provides in this regard that consumer guarantees are the
set of rules that apply to the goods and services bought by the consumers. According to these
rules, the circumstances where a business is under a legal obligation to provide a remedy to the
consumers have been mentioned. The application of consumer guarantees is automatic,
regardless of any extended warranty given by the manufacturer or the seller. They also apply in
cases where the warranty has expired.
Consequently, in this case also, Vincenzo is allowed by the law to seek compensation from
Scenic Views for his loss. There are several problems present in the services that were available
at the resort. Hence, Vincenzo can see the remedies provided by the ACL for the loss caused by
the failure to meet the consumer guarantees.
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References
Braci, Antoine, "Contract Law: An Introduction To The English Law Of Contract For The Civil
Lawyer" (2015) 26(3) King's Law Journal
Echeverry Botero, David, "Contract Interpretation Law In Australia: It Is A Maze, Not A
Straight Way" (2015) 2(41) IUSTA
Eidenmüller, Horst, "Justifying Fair Price Rules In Contract Law" (2015) 11(3) European
Review of Contract Law
Klijnsma, Josse, "Contract Law As Fairness" (2015) 28(1) Ratio Juris
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