Commercial Law Assignment: Analyzing Roger's Contractual Remedies

This case study analyzes a commercial law dispute between Roger and Felicity concerning the installation of a central heating system. Felicity was contracted to install the system for $20,000, but the installed system failed to provide heat. The analysis focuses on whether Roger can refuse payment and seek remedies against Felicity. The legal framework discussed includes express and implied contract terms, with emphasis on terms implied by trade usage, statute, or facts, referencing the BP Refinery (Westernport) Pty Ltd v Shire of Hastings case. Furthermore, Section 18 of the Australian Consumer Law (ACL) is examined, which prohibits false representations in contracts. The study concludes that Felicity potentially breached Section 18 of the ACL through misrepresentation and that Roger may have grounds to sue for damages and ancillary orders under Sections 236 and 246, provided he fulfills his payment obligation to Felicity first. Desklib offers a range of solved assignments and past papers for students.

Law of Commerce
Running Head: COMMERCIAL LAW 0
9 / 1 8 / 2 0 1 8
Student’s Name

LAW OF COMMERCE 1
Contents
Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................4

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Issue
Whether Roger can refuse to make any payment to Felicity and whether he has any further
remedy available against Felicity.
Rules
Two types of terms are there in a contract. One is expressed, the other one is expressed, and the
other one is implied. An express term is that which parties to the contract decides mutually in an
expressed manner and address the same to each other. An implied term is that which parties do
not decide, but such terms exist there because of the nature of the transaction. Implied terms are
not expressly be agreed by the parties, but they implied by the statue. The court recognizes the
implied terms in a contract. In order to identify this kind of terms, a court can use three ways,
and therefore there can be three types of implied terms in contracts. These are
1. Terms implied by trade usage or custom,
2. Terms implied by statute or general law and
3. Terms implied by facts.
The decision was given in the case of BP Refinery (Westernport) Pty Ltd v Shire of Hastings
UKPC 13, UKPCHCA 1, (1977) 180 CLR 266, is an important one to study when the topic is
about implied terms. In this case, it has been given that for while considering a condition as an
implied term, such condition must have the following features
 The terms must be equitable and reasonable

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 The terms must be of nature that makes the same necessary to provide the contract,
business adequacy.
 Such terms must be of obvious nature that is assumed to be there without saying.
 It must have the capacity to make clear expressions
 It must not be in contradiction of any expressed term of the contract.
Therefore, this can be stated that if there is a condition that has not been clearly expressed by the
parties but is of obvious nature, then such condition will be treated as an implied term of the
contract.
Section 18 of Australian Consumer Law:- Australian Consumer Law (ACL) is prescribed as
schedule 2 of Competition and Consumer Act 2010 No. 51, 197. Section 18 of ACL says that a
person must not make a false representation under a contract. Further, the section demands that
in the course of commerce and trade, a person must not be a part of a conduct that is of
misleading or deceptive nature.
Remedies
Section 236 and 246 provides remedies in respect to a breach of Section 18 of ACL. Under
section 236, it is stated that an innocent party can claim the damages from a liable person; further
section 246 says that a victim under section 18 can demand ancillary orders. However, a person
can seek these remedies only in that condition when he/she completes his/her promises.
Application
In the given case, a person named Felicity was required to install a central heating system in the
house of other person named Roger. They have decided $20000 as a consideration for this

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contract. Nothing else about terms and condition is mentioned in the case. However, applying the
provisions of the case BP Refinery (Westernport) Pty Ltd v Shire of Hastings, it was an implied
term of this contract that the heating system will give heat. As the lead purpose of installation of
the heating system was providing heat into the house, therefore this was very obvious and was an
implied term.
Later on, when Felicity was done with his installation work under the contract, Roger started the
heating system installed in his house by Felicity. The same did not heat. Now the provisions of
Section 18 of ACL come into light. As this section requires that a person must not represent
anything falsely, this can be stated here that Felicity has breached the provisions of Section 18 of
ACL. By providing a fantastic looking heating system, he represented to Roger that the same is
ready to use, which was not actual. However, before moving to seek remedies, Roger is required
to make the payment to Felicity.
Conclusion
Roger can sue Felicity for making misrepresentation under section 18 of ACL and seek the
available remedies under section 236 and 246. In such a manner, he can ask for the damages and
also can ask for the ancillary order. Further, before moving to receive remedies under ACL,
roger need to fulfill his commitment, it means he needs to make the payment to Felicity first.