BLO1105 VU Sydney Assignment S1 2018: Contract Law & Consumer Rights

This assignment solution addresses two primary issues: the validity of a contract between Magda and Avinash, and the consumer rights of Elton in his dealings with Magda. Regarding the first issue, the analysis examines the elements of offer, acceptance, and consideration, concluding that no valid contract exists due to Magda's revocation of her offer before Avinash's acceptance. As for Elton, the solution determines that he qualifies as a consumer under the Australian Consumer Law (ACL) and that Magda breached several implied terms of the contract, including sections 54, 55, and 56, and also violated section 18 of the ACL by engaging in misleading and deceptive conduct. The document further discusses the validity of consideration in contracts, highlighting instances where consideration may be deemed invalid, such as past consideration, existing duty, duty in law, and part payment of debt. The assignment concludes that while a contract existed between Magda and Elton with valid consideration, Magda's actions violated Elton's consumer rights under the ACL.

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Solution 1
A

Issue
Whether Magda and Avinash had a
valid contract?

Law
Main contractual elements includes:
Offer
An offer is the proposal made by an offeror to an offeree communicating his
desires with a hope of approval.
Iinvitation to treat are not offers
An offer can be revoked before the same is accepted.
An open offer must be supported with value to make it binding.
Acceptance
When the offeree confirms the offer then it is an acceptance.
If offer not accepted, but the terms of offer are changed, then, it is counter
offer.

Consideration
Anything of value which is required to support the offer and acceptance in
order to make them enforceable in law.
Legal intention
The parties must have legal intent to bind by the contract and enforce in law.
Capacity
The parties should be of sound mind and must be major.

Application
i. Magda sells her prints through website and studio.
ii. She offered ‘Paris Stilton’ for sale @ $2,000 with description- ‘a limited
edition of only 3 prints’. Only one was unsold.
Advertisement is not an offer but an invitation to sell.
On 19th February
ii. An offer by Avinash @$1,600.
iii. Magda reject offer and quote new offer @ $1800.
So, a counter offer which cancelled the offer of Avinash.
Avinash asks Magda to hold the offer till 21st February but without
consideration.

20th February
Avinash confirms the offer of Magda but require certificate of authenticity
that verified the portrait’s origin and status as a limited edition work.
So, offer by Magda on 19th is not accepted.
Additional term was incorporated.
So new counter offer was made by Avinash.
Magda is willing but require confirmation by 4PM.
No confirmation by Avinash by him 4PM on 20th February.
So, no acceptance is made by Avinash.
Magda revoked the offer at 11:30AM on 20th February.
Thus, the offer by Magda was revoked.

Conclusion
There is no contract that exists amid Avinash and Magda.
The offer by Magda was revoked by her before the acceptance of
Avinash.

B

Issues
– Whether Elton qualifies as a consumer?
– Whether Magda has breached any terms of the
contract?
– Whether Magda has made any misstatements?

Law
The Australian Consumer law is applicable
Section 3
A person is consumer if the goods are purchased
for consumption/persons use and the worth is
less than $40,000.

Implied Terms
Section 55
Goods must fit for the purpose so acquired.
Section 54
Goods acquired must be of acceptable quality:
i. free from defects,
ii. must be safe,
iii. durable,
iv. must fit the purpose for which it is supplied
Section 56
Goods sold on description must correspond with the
goods.