Assignment: Applying Legal Principles in Contract and Consumer Law

This document presents a comprehensive solution to a contract and consumer law assignment. It addresses fundamental differences between agreements and legally binding contracts, explores various contract types, and examines scenarios where clients might seek legal advice. The assignment delves into topics such as offer and acceptance, contractual capacity, undue influence, guarantees, and the importance of contract terms. It analyzes standard form contracts, third-party liabilities, and the assignment of rights. Furthermore, it covers electronic contracts, agency relationships, misleading conduct, and compliance with the Australian Consumer Law (ACL) and Competition and Consumer Act (CCA). The document provides detailed explanations, case analyses, and practical advice, making it a valuable resource for students studying contract and consumer law.

Apply Legal Principles in
Contract and Consumer Law

Table of Contents
INTRODUCTION...........................................................................................................................6
MAIN BODY ..................................................................................................................................6
What is the fundamental difference between an agreement and a legally binding contract?.6
Identify four contracts about which a client may seek advice from a financial services
provider. .................................................................................................................................6
Lucy wants to know under what type of circumstances would a private agreement between a
husband and wife be considered contractually binding?........................................................7
What is a 'letter of intent' and in what circumstances are such documents likely to be used?7
In what commercial situation may a client seek a letter of comfort? What three forms may it
take? .......................................................................................................................................8
What is a 'letter of comfort'? Name a commercial situation where 'letters of comfort' are
commonly useQuestion 4.1d..................................................................................................8
What are some of the ways an offer and acceptance can be communicated between the parties
to a contract?...........................................................................................................................8
List some of the ways an offer may lapse..............................................................................8
Is Valentine correct? Give reasons for your answer...............................................................9
ACTIVITY 2....................................................................................................................................9
A minor does not have the capacity to enter into a contract which will be enforceable against
them, except in exceptional circumstances. Why? What are those exceptional circumstances?9
If a person who is intoxicated enters into a contract with another person will that contract
always be voidable by the intoxicated person when they return to sobriety? Give reasons for
your answer............................................................................................................................9
Can Tom recover his $15,000? Give reasons for your answer............................................10
In what relationship does the presumption of undue influence arise?..................................10
What is the definition of a guarantor? What is the legal responsibility of a person who agrees
to be a guarantor on a loan for someone else?......................................................................10
Under what circumstances would you advise your client, the bank, that they could
successfully rely on this guarantee should the young couple default on their loan?............10

Provide Dianne and Tina with your advice about whether there is any action and against
whom they may take it, giving reasons for your answers....................................................11
ACITIVITY 3................................................................................................................................11
Why is it important to identify the ‘terms’ of a contract?....................................................11
Using examples, describe how you would explain to a clienQuestion 4.1t the differences
between conditions and warranties, and why the differences matter?.................................11
How would you explain to a client the effect of a signature on a contractual document? Would
your explanation be different if one of the parties had not bothered to read the terms of the
contract?...............................................................................................................................12
List three contractual transactions which are required by Australian legislation to be recorded
in a written document...........................................................................................................12
Is Rolando correct in his refusal? Give reasons for your answer.........................................12
What is a standard form contract? What is the difference between a commercial standard form
contract and a consumer standard form contract? Use examples to explain your answer.. .13
ACITVITY 4..................................................................................................................................13
In what circumstances can a third party (‘stranger’) to a contract be held liable in the event of
a breach? 'subsist' or cone into existence? How is copyright a valuable asset in business? 13
In certain circumstances, rights can be assigned due to operation of law. List three
circumstances where such project can occur........................................................................13
Sheila wants Bruce to pay back the first two progress claims will she be successful? Give
reasons for your answer........................................................................................................13
What is the purpose of a force majeure clause? Under what circumstances will they apply?14
Explain the matters the court will take into account in assessing the measure of damages they
will award Paige...................................................................................................................14
1. An unforeseen event, the fault of neither party which makes it impossible for the contract to
be performed.........................................................................................................................14
2. A remedy to put the injured party in the position they would have been in if the contract
had been properly performed................................................................................................14
3. A court order preventing someone from performing a specific act..................................14
4. Where one party leads the other party to reasonably believe that they will not be insisting
on strict performance of the agreed terms............................................................................14

1. The concept that provides only the parties to the contract can enforce it........................14
2. A three party agreement whereby the original parties agree to discharge their contract in
consideration of a new contract being entered into between one of the original parties and a
third party.............................................................................................................................15
3. When each party properly performs their contractual obligations and the contract is
discharged.............................................................................................................................15
4. A remedy that restores the parties to their pre-contractual position, nullifying the existing
contract.................................................................................................................................15
ACTIVITY 5..................................................................................................................................15
5.1 Explain the term E commerce?.......................................................................................15
5.2 Are there any exceptions to the type of contracts which can be made electronically?
Explain your answer using examples...................................................................................15
5.3 Heidi has the following questions:.................................................................................15
When making an offer over a website, to whom is the offer being made?..........................15
With what legal requirements must Heidi comply? ............................................................15
5.4 What are the requirements of electronic signatures under the ETA?.............................16
5.5 Explain the use and significance of Australian Business Number Digital Certificates. 16
5.6 List three rules under which domain names are allocated..............................................16
ACTIVITY 6..................................................................................................................................16
6.1Is the contract enforceable? If so, from what point in time?...........................................16
6.2 Has Daniel done anything unlawful?............................................................................16
6.3 Tilly engages Shona as an agent to sell her business to Selva. Is Shona a Party to the
contract to sell the business? Explain...................................................................................17
6.4 Explain how an agency relationship differs from that of an independent contractor.....17
6.5 Which party (agent, principal or third party) would not be held liable for fraudulent
misrepresentations where the agent acted outside their authority?......................................17
6.6 Subsequently Silvio conferred with Joe and agreed to ratify his act. Neither Joe nor Silvio
will pay for the cattle when delivered. Who is liable?.........................................................17
ACTIVITY 7..................................................................................................................................18
7.1 Can omitting to provide information ever count as misleading or deceptive conduct? How
would you explain this concept to a client?..........................................................................18

7.2 Are the complaints of the consumers justified? How would you explain this to your client
and what advice would you give them to ensure they operate in compliance with the ACL?18
7.3 Anthea sold Bob some paper and pens for $65. Anthea did not give Bob a receipt. Has
Anthea done anything unlawful?..........................................................................................18
7.4 What argument could Marc make? Do you think he would be successful?...................18
7.5 Sebastian is going camping in the snow and asks the sales assistant which sleeping bag
would be the best for his requirements. He is advised that the SleepDry bag is the best but in
fact he gets wet and cold while camping. Who would be responsible for his miserable
camping trip: Sebastian, the manufacturer or the sales assistant? .......................................19
Activity 8.......................................................................................................................................19
Have Ting and Chrome done anything illegal? Explain your answer with reference to the
CCA......................................................................................................................................19
Has the Bookworm Bookshop done anything unlawful? Has Harmony Publishers done
anything unlawful? ..............................................................................................................19
Has Penny acted lawfully? Explain your answer.................................................................19
Is this lawful? Why or why not?...........................................................................................19
Explain what is meant by a cartel.........................................................................................20
ACTIVITY 9..................................................................................................................................20
9.1 Has Jacob done anything unlawful ?..............................................................................20
Has Rory fulfilled his obligations as an AFS licensee?.......................................................20
CONCLUSION..............................................................................................................................21
REFRENCS ..................................................................................................................................22

INTRODUCTION
Contract laws are those kind of laws which helps in forming of legal agreement that is
required to be developed within parties. These laws deals over various kinds of rules formed to
make an agreement developed in legal contract. Such laws helps in conducting of activities in
smooth and better manner which are related to an organization. Consumer laws are the laws that
has been formed in order to guide consumer about power withheld by them. This file covers
various questions based on these laws and has to be answered.
MAIN BODY
Question 1.1
What is the fundamental difference between an agreement and a legally binding contract?
Contract law is that kind of agreement which is legally enforceable by law. These laws
has been helping in making an agreement legally valid within the eyes of law. Further they have
been explained as follow:
Offer: This is the idea that has been presented by an party who wants an contract to be
formed. It is very first step that leads over contract formation. Only idea to form an contract is
been presented (Narciso, 2019).
Acceptance: In it offer that has been presented is required to be accepted by the party
this is known as acceptance. It is considered as second step that which makes parties to accept
and form contract. Under it an offer made is required to be accepted by other party going to
come into contract.
Consideration: In this after offer and acceptance is completed the next things that comes
in contract is related to guidelines over which an contract is formed. So, in this all rules and
regulations related to contract is being discussed.
Legality: This means that an contract should be over legal terms and should not violate
any kind of legal norms that has been mention under contract act.
Question 1.2
Identify four contracts about which a client may seek advice from a financial services provider.
Lump Sum Contract: As per this contract an fixed price is setted for an contractor by
the person giving him the contract. The contractor can be an engineer or any person willing to

form a contract. Such contract is suitable as scope and schedule of project is been defined that
allows about engineer to make estimation of project cost.
Unit Price Contract: In these contract estimated quantity is decided over resources that
has to be used in a project. Final project is base upon quantities that is required to carry the work
and there price is being decided. (Micklitz, 2018).
Cost Plus Contract: In this an contract agreement under which purchase agrees for
paying cost of all labor and materials plus amount over contract overhead and profit.
Incentive Contracts: Compensation is based over performance as per the agreed target
which has been set by an organization. In these kinds of contract mainly budget and quality is
seen.
So, in order to make proper and effective utilization of money advice can be taken from
financial advisor. That is going to help in making an organization moderate its monetary contacts
and protects its money also.
Question 1.3
Lucy wants to know under what type of circumstances would a private agreement between a
husband and wife be considered contractually binding?
Private agreements are those kinds of agreement that has been formed between two
parties and organization over mutual basis. In such contract both parties seek to achieve a
common goal to gain profit and generate revenue from the task and objectives willing to be
achieved by them (Law, 2018). In other words this is refereed to as agreements that has been
formed between two parties under which terms and condition is being decided by them only.
Question 1.4
What is a 'letter of intent' and in what circumstances are such documents likely to be used?
An letter on intent is that kind of document that has been preliminary commitment over
one party to do an business. The letter has bee outlined with chief terms over prospective of
dealing with main terms. This is one of the most commonly used business transactions that is
similar as the content of sheets which are related to term. One of the main difference between
two is that letter formats is being used to present it and terms sheet is based over list that has
been presented.
Question 1.5

In what commercial situation may a client seek a letter of comfort? What three forms may it
take?
A letter of comfort is know as that kind of letter over intention through solvency opinions
that is written in document that has been provided over level of assurance which is obligated and
is required to meet ultimately. An letter of comfort is being given to organization or persons that
holds interest by auditors regarding statutory audits, statements and reports use within the
prospectus. Letter of comfort is being attached through preliminary statements for assuring that it
is not different from final version (Dowuona-Hammond, 2018).
What is a 'letter of comfort'? Name a commercial situation where 'letters of comfort' are
commonly useQuestion 4.1d.
In particular the letter is issued by auditors to the lenders as option of solvency with
opinion on weather an borrower is able to pay the money of loan taken by him. They consists of
opinions which is not guaranteed over underlying the organization about its insolvency. Two
parties in a business deal can use letter of comfort that has been put into writing or has been
outlined over terms that is there to make deal possible.
Question 1.6
What are some of the ways an offer and acceptance can be communicated between the parties to
a contract?
Acceptance and offer are one of the most basic element of contract that leads over
forming a legal contract. They both helps in formation of contract in a way that until offer is
being made and accepted contract cannot be formed. For accepting an offer communication must
be done in terms of proposal to both the offered results (Burrows and Booth, 2019) (Beckers,
2017).
Question 1.7
List some of the ways an offer may lapse.
An offer can be lapse under theses condition when death of offeror or offeree takes place.
Also when lapse of time takes place and at the time of revocation. At the time when counter offer
has been made. Lapse of time takes place this means that the time period specified for a contract
to be finished. Revocation means when a offer has been rejected by the party this means that

when a party does not wants to perform an contract. Counter offer under this an new offer is
made when an offer is already in existence.
Question 1.8
Is Valentine correct? Give reasons for your answer.
From the above scenario it is clear that no contract has been formed between Valentine
and Tristan. Though in starting offer has been made but later on rejected. In this revocation of
offer has been done over the contract that has been presented by one party to another
(Anagnostaras, 2017).
ACTIVITY 2
Question 2.1
A minor does not have the capacity to enter into a contract which will be enforceable against
them, except in exceptional circumstances. Why? What are those exceptional
circumstances?
An minor cannot enter into contract as they have been restricted by the common law and
statute operate with restricted capacity of minor within contract. The existing mix within
common law and multiple legislations differ as per the rules and regulation of contract
law.Exceptions in relation to this is that contract not falling with a minor are voidable. Such
contracts result in minor permanently acquiring property with an ongoing obligation.
Question 2.2
If a person who is intoxicated enters into a contract with another person will that contract always
be voidable by the intoxicated person when they return to sobriety? Give reasons for your
answer.
An contract voidable at the opinion of an party that has resulted into intoxication which is unable
over understand nature of contract being made provide with other party knew and person's
disability. The party seeking over withdraw from contract that provides both requirement:
(a) They were suffering with disability
(b) Other party that has ought to be aware about situations.
Question 2.3

Can Tom recover his $15,000? Give reasons for your answer.
Yes Tom receives sum $15,000 because of the flaw that has been mentioned in the
contract. As per this breach of contract has taken place due to the violation of National
Construction Code. This breach can be recovered within the form of damages that is an remedies
available in contract law. The code has been formed in order to take care of all kinds of
construction activities that takes place within an construction contract.
Question 2.4
In what relationship does the presumption of undue influence arise?
In undue in undue influence has been established by an contract avoidable. This occurs in
an inequality of power between contracting parties resulted in weaker party entering in an
contract. It can be in the form of undue influence in which an influences arises when a contact
results in unfair dealing. This has been justified under the case of Johnson v Buttress.
Question 2.5
What is the definition of a guarantor? What is the legal responsibility of a person who agrees to
be a guarantor on a loan for someone else?
Guarantor is the person who gives guarantee over an object that has to be paid by him to another
person. Yes an person holding guarantee is liable to pay loans when required to do so. As it is
his responsibility to seek that loan has been paid by an the person or individual that has taken
loan (Narciso, 2019).
Question 2.6
In this scenario young couple took out sizeable home loan and insistence of bank with
client and ask husband elderly Chinese parents to graduate for loan. Parents have limited spoken
and written English.
Under what circumstances would you advise your client, the bank, that they could successfully
rely on this guarantee should the young couple default on their loan?
Discharge of Guarantor by Release of Principal Debtor:
Section 134 of the ICA provides that the guarantor shall stand discharged from its
liabilities under a contract of guarantee in case of any agreement arrived at between the creditor
and the principal debtor, by which the principal debtor is released.

Question 2.7
Dianne recently received sustainable inheritance ad is keen to invest in creating business.
She is required to advice Smart advisor Pty Ltd. In this Dianne is invest 'Feed Me Cafe'. Andrew
assurance Dianne invested within the cafe. This is seeking on Andrew's advice and decided to
invest extra funds to achieve an even greater return. Tina has poor health with minor disability
and lend Dianne $30,000 with the hope of getting double return.
Provide Dianne and Tina with your advice about whether there is any action and against whom
they may take it, giving reasons for your answers.
In this case Tina is having poor health and cannot be able to work with more consistency
and the money given to be invested has been done to gain higher return that is not certain. Inn
this case disregard of liability by surety is applied. Eligible to the benefit of every security which
the creditor has against the principal debtor. This holds true even if at the time of entering into
the contract of guarantee the surety was unaware of the existence of such a security.
ACITIVITY 3
Question 3.1
Why is it important to identify the ‘terms’ of a contract?
It is important to identify the term of contract in order to make sure that all elements
existing within an contract has been followed in proper manner. This gives legality to contarct
formed between parties.
Question 3.2
Using examples, describe how you would explain to a clienQuestion 4.1t the differences
between conditions and warranties, and why the differences matter?
The following are the major differences between condition and warranty in business law:
Condition is considered to be an obligation that is required and has to be fulfilled by
another person and in warranty surety is given by seller regarding the product. In condition the is
Question 4.1vitality within the contract of sales and in warranty there is ancillary. In case of
breach of condition result is termination of contract while in warranty it may or may not lead to
cancellation .
Question 3.3

How would you explain to a client the effect of a signature on a contractual document? Would
your explanation be different if one of the parties had not bothered to read the terms of the
contract?
An signature is considered to be an contractual document or an written agreement that
has been demonstrating that a party is understood over terms and conditions of an contract. A
party in an agreement by his signature, regarding of weather actually rQuestion 4.1eading of
contract within.
Question 3.4
List three contractual transactions which are required by Australian legislation to be recorded in
a written document.
An valid contract is being legal contract over three elements that is required to form an an
contract. Such elements are offer, acceptance and consideration. Earnest money deposited that
satisfy the third requirements that considered and seller takes property off market in reliance
contract(Naude, 2018).
Question 3.5
Michele has undertaken an inventory of the electrical appliances throughout her business
and discovers that some require cleaning and repair. MichelQuestion 4.1e takes the appliances to
Rolando the repairer, with whom she has not dealt before. Unfortunately, whilst the goods were
waiting to be repaired, Rolando’s repair shop was burgledQuestion 4.1 and the appliances
stolen. Rolando refuses to accept liability for the loss and draws Michele’s attention to a small
sign on the door leading into a back room of the shop which says “No liability for loss or damage
to goods accepted under any circumstances”. Rolando points to these same words printed on the
back of the receipt Michele was handed when she deposited the appliances for repair.
Is Rolando correct in his refusal? Give reasons for your answer.
Ronalndo can refuse the contract in a way that he already gave prior information about
the risk that is involved in getting the items repaired by him. In this case there is not going to
breach of contract as customers has taken risk despite of reading the warning given on receipt.
Question 3.6