LAWS20058 Australian Commercial Law: Angelo Case Contract Analysis

This report provides a legal analysis of a case study involving Barry and potential breaches of contract law related to misrepresentation by Angelo. It examines the elements required for contract formation, distinguishing between offers and invitations to treat. The report references relevant case law, such as Bisset v Wilkinson and Attwood v Small, to support the analysis of misrepresentation claims. It further considers the application of the Australian Consumer Law and determines whether Barry can successfully claim a breach of contract based on the issues presented in the case study, particularly focusing on the advertised turnover and the presence of a competitor. The report concludes that while some issues may not constitute a breach of contract, Barry may have grounds for claiming damages related to misrepresentation.

Transcript
1. Cover page
2. Each and every transaction which takes place in business attracts different laws. These
can relate to statutory and/or common laws. The case study presented of Barry involves
certain breaches of law and this report highlights these very breaches. The aim is to
present Barry with a proper advice based on the facts given in the case study.
3. A contract is formed when certain elements or requirements of formation of contract
come together in a particular case. One of these requirements is for an offer to be made
by one party to the other party, which includes some specific terms. An important point is
to differentiate between an offer and an invitation to treat. The offer denotes the presence
of intent of being legally bound; however, this is absent in invitation to treat, and denotes
the negotiation phase of the contract.
4. Such statements, of law or fact, which are made by one party to another party, merely to
bind the other party to get in the contract, these are deemed as misrepresentation.
As a result of presence of misrepresentation, the contract becomes voidable and can be
set aside by the represnetee.
Bisset v Wilkinson: a case of misrepresentation can be made only in case of false
statement being made regarding law or fact, in place of statements covering estimates or
opinions
Smith v Land & House Property Corp: However, even a statement of opinion can make a
person liable, where the representing party was in such a position, so as to know about
the facts of such opinion.

Transcript
Attwood v Small: A defence which is often available in such cases is to show that the
representee had checked the validity of statement; and in such cases, it is deemed that
reliance was not placed on the statement.
5. Apart from the common law, statutory law also prohibits misrepresentation. Competition
and Consumer Act, 2010, through its Schedule 2 presents the provisions of Australian
Consumer Law.
6. In the present case study, there is a need to analyse each of the problems faced by Barry
to analyse the potential of breach of contract being claimed upon by him against Angelo.
In context of the first issue, the turnover of the first two months was just $13,000 per
month as against the advertised turnover of $20,000 per month. Had this term been a part
of the contract signed between Barry and Angelo, Barry could have claimed a breach of
contract on part of Angelo. However, this was a part of advertisement, which has proven
to be an invitation to treat in the previous segment, making it non-binding. So, for this
issue, Barry cannot claim a breach of contract against Angelo. The next issue would also
discard the changes of Barry claiming a breach of contract against Angelo, as the point of
no competitor was covered under the advertisement and not under the signed contract.
7. He has the option of claiming damages for such breach and for the misrepresentation.
However, for the first, second and fourth issue, a claim of breach of contract would not
be successful against Barry, due to the reasons highlighted above.