Practical for A3 PDF

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Practical for A3...

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Question 1

(a) Issue – The legal issue involves the common law of misrepresentation, where John liable towards Natalie about the statement of the fuel efficiency of the car?

Rule –

A state of mind common law misrepresentation is: a) a false statement of fact, not opinion made by one party and b) to induce the other party to enter into a contract, and c) that in fact induced the other party who relied on it to enter into the contract.

A misrepresentation can be categorized into: 

Innocent misrepresentation: voidable + no damages o Remedies are terminate the contract but can't sue for damages (Whittington v Seale-Hayne)

Applicable of law to facts – In this case, Natalie wanted to buy a car that uses fuel consumption to be less than 8 litres per 100km. However, John mistakenly reads it as 6.9 litres per 100km, and tells Natalie that the blue car uses less than 8 litres of petrol per 100km. Thus, John made a false statement of fact that the car uses less than 8 litres of petrol. Upon hearing it, Natalie entered into the contract, and in fact, she relied on the information to enter into the contract. John can argue that he mistakenly read it wrongly, as he is a trainee who is very inexperienced and still learning. However, Natalie can rebut back by saying that it is his responsibility to know his knowledge before telling the customers.

Conclusion – John is liable towards Natalie for innocent misrepresentation because he was still new. Remedies that Natalie can seek is terminate the contract but cannnot sue for damages (Whittington v Seale-Hayne)

(b) Issue – The legal issue revolves around Natalie rights and remedies against Happy Driving under ACL.

Rule –

S3 of ACL states that as a consumer, the goods purchase does not exceed $40,000 and if the goods do exceed $40,000, the goods are meant for personal uses or consumption and not meant for resale.

S29 ACL is about “making false or misleading representation made by business when selling goods or services.” It must not make false or misleading concerning specific matters that the goods are of a certain standard, quality or grade.

S54 of ACL states that goods are of acceptable quality S55 of ACL states that goods are fit for any disclosed purpose

S260 of ACL states, Where the non-compliance with consumer guarantee is a major failure (breach of condition) or cannot be remedied, the consumer can: 

reject the goods (that is, return the goods for a refund or a replacement) or



require the business to pay to the consumer the difference between the value of the goods and the price paid for them.

Applicable of law to facts – In this case, Natalie is qualified as a consumer under S3 of ACL, as the car cost less than $40,000 and it is meant for her personal use.

John has breached S29(1)(a) of the ACL, where the business must not “make false or misleading representation of the goods and services”. In this case, the cars are made in Wakanda, which is not true. (Hartnell v Sharp Corporation of Australia Pty Ltd). John also breached S54 of ACL, stating that the goods are of acceptable quality. On the way home, the car catches fire and exploded. Thus, the goods is not of acceptable quality.

John also breached S55 of ACL, stating that the goods are fit for disclosed purpose. Natalie wanted a car that uses less than 8 litres, but John told her the blue car uses than 8 litres when it uses 9.6 litres. Thus, the goods are not fit for disclosed purpose.

Conclusion – Under ACL, S276 prohibits exclusion clauses by the manufacturer. Natalie can sue Happy Driving under S236 for damages and sue the manufacturers under S271 for the breach of S54 of ACL.

Question 2 (a) Issue – Under duress, can Peter argue that the contract is not enforceable?

Rule – If one party force the other party to enter into the contract by threatening negative consequences, there is a lack of consent and engaged in duress, the contract is voidable.

The contract will be voidable due to duress: 1. One of the parties has threatened the other party with harm; and 2. The threat of harm contributed to the threatened party’s decision whether to enter into the contract. In this case, it is economic duress. (North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd 1971)

Application of law to facts – John wants to buy Peter’s pony at half price. If not, John will tell Peter’s client that he is stealing money from them. Peter did not do that, but he is scared that people might believe the rumours, and damage his economic well-being, thus he sells the pony at half price. John threated Peter with economic duress (North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd 1971). John put the threat of harm on Peter, if not John will spread rumours, and as a result, Peter sells the pony because of what John will do. Thus, the contract to sell the pony is voidable.

Conclusion – Peter can argue that the contract is unenforceable due to economic duress.

(b)

Question 3 (a) Mary does have remedy against Cars4u. What Cars4u has done in this case is breaching of S18 of ACL, where it states “A business must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

Cars4u engages in conduct of advertising the Honda Civic VTi. They are in trade and commerce, selling and trading of products. The conduct was misleading, as when Mary went out, they told her that they did not have the stock for quite a while. Mary can file complain to ACCC to ask them to sue Cars4u under S18 of ACL.

(b) IP is unlikely to be successful. Under S40 of ACL, it is the assertion of right to payment for unsolicited goods. Since Mary did not ask for the new modem, she does not need to pay because it was sent to her.

Under ACL, IP is unlikely to be successful in claiming $350 from Mary. If IP send a product to the Mary on its own will, Mary does not need to pay, and is not liable for the loss or damage to the product.

(c) Mary is not obligated to return the modem to IP. Under S41 of ACL, after the expiry of a certain period, the product becomes the property of the person, free of charge. Whether Mary want to return or not is up to her.

(d) Ip does not have a remedy against Mary under the ACL, as the product was sent out to Mary. Mary did not ask for it. Thus, it does not make sense that Mary has to pay for that.

Question 4

Rule – Under the common law of formation of contract, is Barry required to pay $50,000?

Rule – Formation of contract = agreement + Intention + consideration

Application of law to facts – there is an agreement between both John and Barry. John is the offeror and Barry is the offeree.

Question 5

Issue – Under the postal rule, Is William liable towards Amanda or Jasper?

Rule – There must be clear offer & acceptance (Powell v Lee) General rule is that acceptance must be communicated to the offeror. (Adams v. Lindsell 1818) Acceptance of offer only, and it is on the day where it is being posted. Does not matter if it is delay or never receive. Acceptance of the offer occurs at the place and time the letter is posted

Social and domestic situations: no intention to do business if agreement is made in social/domestic context but can be overturned. Wakeling v Ridley (1951) There is intention to create legal relation because there are sacrifices being made.

Applicable of law to facts – William makes an offer to sell the tennis racquet for $450. On the 4th of February, Amanda writes a letter to says that she will buy the racket for $450. In this case, William is the offeror and Amanda is the offeree.

On 5th of February, Jasper offers to pay $350. On the 6th, William accepted Jasper offer. In this case, there is an agreement formed between William and Jasper.

There is an exception to the general rule. Based on the postal rule of acceptance in (Adams v. Lindsell 1818), acceptance of offer only, and it is on the day where it is being posted. Does not matter if it is delay or never receive. Acceptance of the offer occurs at the place and time the letter is posted. Since Amanda post the letter on the 4th of February, there is already an agreement formed between Amanda and William to sell the racquet for $450.

It is presumed that it is Social and domestic situations: no intention to do business if agreement is made in social/domestic context but can be overturned (Balfour v Balfour 1919). This presumption can be rebutted be evidence to the contrary

(Wakeling v Ridley 1951). There is intention to create legal relation, based on their conduct.

Conclusion – The letter from Amanda on 4th of February formed an agreement with William. Thus, there is a binding agreement between William and Amanda. As for Jasper...