(TIỂU LUẬN) the crucial issue is whether timothy is successful in suing adam for not performing the obligations in this valid contract of selling 80% of adam ranch ltd by the price of 100,000 unde

Timothy v Adam The crucial issue is whether Timothy is successful in suing Adam for not performing the obligations in this valid contract of selling 80% of Adam Ranch Ltd by the price of

Subject Code LAW2447

Individual Written Assignment

Location

Campus

Rmit University Vietnam Saigon South Campus

Table of Contents

Problem Solving Question: 4

A Timothy v Adam 4

1) Contractual Law: 4

a) Contract Termination 4

 Undue influence 4

 Unconscionability 4

2) Conclusion of the crucial legal issue: 4

B Adam v Thomson 5

1) Contractual Law: 5

a) Incorporated term 5

b) Parol Evidence Rule (PER) 5

c) Condition or Warranty? 5

d) Disclaimer 6

e) Negating the valid contract 6

 Unconscionability 6

2) Australian Consumer Law (ACL): 7

a) General Protection 7

 Unconscionable conduct (Section 20 of ACL) 7

 Unfair terms (Section 23 of ACL) 7

3) Conclusion of the crucial legal issue 7

C Hugo v Farm Machines Ltd or Thomson v Farm Machines 8

1) Australian Consumer Law (ACL) 8

a) Defective goods 8

 Manufacturer 8

 Supplies Goods 8

 In Trade or Commerce 8

 Is the good defective? 8

 Caution and Remoteness 9

b) Defenses 9

2) Conclusion of the crucial legal issue 9

D Thomson v Farm Machines Ltd 9

1) Contractual Law 9

a) Incorporating outside verbal statement 9

b) Parol Evidence Rule (PER) 10

c) Condition or Warranty? 10

d) Disclaimers 10

e) Unilateral mistake 10

f) Misrepresentation 11

2) Australian Consumer Law (ACL) 11

a) Misleading (Section 18 of ACL) 11

3) Conclusion of the crucial legal issue 11

Case Note Question 12

1) Introduction 12

2) Legal issue identification 12

3) The judgement 13

a Whether the plaintiffs are consumer 13

b Whether the van is acceptable quality (ACL s 54) 13

c Whether the van is fit for disclose purpose (ACL s 55) 13

d Whether these faults are major failure (ACL s 259(3), s 260) 14

e Remedies (ACL s 262) 14

4) Conclusion: 14

Problem Solving Question:

A Timothy v Adam

The crucial issue is whether Timothy is successful in suing Adam for not performing the obligations in this valid contract of selling 80% of Adam Ranch Ltd by the price of $100,000 under contractual law

1) Contractual Law:

a) Contract Termination

The subordinate legal issue is determining whether Timothy can negate the contract

 Undue influence

It is hard to determine that Timothy has performed undue influence conduct which urge Adam to

sign the unfair contract (Johnson v Buttress Williams v Bayley) 1 , 2 as Adam has time to carefully

think and consult with his accountant

 Unconscionability

Timothy did not have intention to support Adam in managing the Adam Ranch Ltd which Thomson’s works was not monitored and aware Adam’s weaknesses that is painful arthritis Hence, Timothy attempted to take advantages to induce Adam entering the contract to get

increases of land price (Commercial Bank of Australia Ltd v Amadio ) 3

2) Conclusion of the crucial legal issue:

Timothy can sue Adam for not performing obligations in the contract, however, Adam is more prevailed to terminate the contract for Timothy unconscionability conduct

1 Johnson v Buttress (1936) 55 CLR 113

2 Williams v Bayley (1866) LR 1 HL 200

3 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

B Adam v Thomson

The crucial legal issue is whether Adam is successful in suing Thomson for not performing the valid contract of doing some custom seeding for the price of $38 per acre under contractual law and ACL

1) Contractual Law:

a) Incorporated term

Outside terms between Adam and Thomson which are seeding 2150 acres in one-month period and utilizing Germany machines to seed which indicates the high-quality of the work Two terms are guaranteed to be satisfied by Thomson and independently verifiable (Chandelor v Lopus 4 and

Handbury v Nolan ) 5 These terms, which are communicated to Thomson before Adam signs

contracts (Causer v Browne , Thornton v Shoe Lane Parking 6 7 and Olley v Marlborough Court Hotel 8 ), can be incorporated into contract

b) Parol Evidence Rule (PER)

Contract is written; hence, PER are implemented The “Essentiality Test” shows that if Thomson cannot utilize Germany machine for producing high-quality work which has to be done in one month, Adam will not be induced into the contract Hence, they are important which can be incorporated into written contract

c) Condition or Warranty?

As incorporated terms are significant, they are Condition terms

4Chandelor v Lopus (1603) Cro.Jac 4

5Handbury v Nolan (1977) 13 ALR 339

6 Causer v Browne [1952] VLR 1

7Thornton v Shoe Lane Parking (1971) 2 WLR 585

8 Olley v Marlborough Court Hotel [1949] 1 KB 532 Ltd

d) Disclaimer

Two disclaimers help Thomson avoid the responsibility for loss or damage of reasonable adjustment of the work and delay of work due to shortage of workers Though Adam has not read

them, they are stated in the contract which are parts of the written contract (L’Estrange v F Graucob Ltd) 9

Reasonable adjustment is adjustments which can be different from the method but bring the same high-quality work Thomson utilize the Chinese machines to do seeding due to shortage of machine which is not reasonable adjustment as it can worsen the work quality

The work finished with the longer period time because Hugo was hospitalized which is not shortage of workers Thomson can replace different workers to finish tasks

Therefore, these breaching conducts are not fallen under scope of disclaimers which declaimers are not effective to avoid responsibility This leads to that Thomson breached both condition terms which is mentioned above

e) Negating the valid contract

 Unconscionability

Thomson utilized the standard model in the past and Adam only asked Thomson to prepare contract without disclosing disease Therefore, Thomson has not aware Adam’s painful arthritis

(Commercial Bank of Australia Ltd v Amadio 10 )

9L’Estrange v F Graucob Ltd

10 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

2) Australian Consumer Law (ACL):

Adam bought the services for serving for his businesses purposes which is not defined as consumers under ACL (ACL s 3) Adam is protected under ACL s 18, s 20 and s 23.11

a) General Protection

 Unconscionable conduct (Section 20 of ACL)

Thomson’s business conducts are providing Adam with high-quality work which has to be done within a month They are in trade or commerce for the price of $38 per arc which is part of ongoing business However, Thomson has not aware Adam’s weakness which is proved in

“Unconscionability” This is not unconscionable conduct

 Unfair terms (Section 23 of ACL)

Though Thomson charged the price twice the price of the market, it is Adam’s responsibility to find out the market price before signing contract which does not imbalance parties’ rights (ACL s

24 (1)) Hence, this is not an unfair term.12

3) Conclusion of the crucial legal issue

Adam can be more prevailed to sue Thomson to terminate contract and get compensation as Thomson breached condition terms Meanwhile, Adam cannot sue Thomson for Unconscionable conduct (ACL s 20) and Unfair terms (ACL s 23) of ACL.13 14

11 ACL s 3

12 ACL s 24 (1)

13 ACL s 20

14 ACL s 23

C Hugo v Farm Machines Ltd or Thomson v Farm Machines

The crucial issue is whether Hugo is successful in suing Farm Machine Ltd for defective goods

of under contractual law

1) Australian Consumer Law (ACL)

a) Defective goods

 Manufacturer

Farm machines Ltd.is importer and sole distributor of “Super Farmer 555” from China which is defined as manufacturer (ACL s 7(1) ).15

 Supplies Goods

Machines is tangible products

 In Trade or Commerce

Farm Machines Ltd earns profits from selling machines which is in trade or commerce

 Is the good defective?

Machines causes injuries for Hugo which is unsafe (ACL s 9 (1) ) All the elements:16

“Marketing”, “Packaging”, “The use of any mark in relation to products” and “Time of supply” are satisfied However, the reasonable expected use is that the average seeding machines should

be run smoothly under water and raining condition based on “Objective Test (Taco Company of Australia Inc v Taco Bell Pty Ltd 17 ) Moreover, the warning was printed in small size which is

not seriously put into notice of Hugo Thus, The machine is a defective good

15 ACL s 7 (1)

16 ACL s 9 (1)

17 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982)

 Caution and Remoteness

If removing the electricity shocks based on “But For” test (Yates v Jones 18 ), Hugo will not be

injured, or the seeding work will not delay These damages are foreseeable Hence, defective machine, which is the causation, affects Hugo and time of seeding work

b) Defenses

Farm Machines Ltd could do contributory defenses against Hugo or Thomson that average users should read the instruction carefully before utilizing machines

2) Conclusion of the crucial legal issue

Hugo or Thomson can sue Farm Machines Ltd for defective good to compensate damages that machines cause to them However, the Farm Machines Ltd can do contributory defenses

D Thomson v Farm Machines Ltd

The crucial legal issue is whether Thomson is successful to sue Farm Machine Ltd in breaching the valid contract under contractual law and ACL

1) Contractual Law

a) Incorporating outside verbal statement

The outside term is that the machine can work in any condition which the sale person falsely communicates to Thomson even though the machine cannot work under wet condition The reasonable notice was delivered before contract formation Outside term can be incorporated into the contract

18 Yates v Jones, 1990

b) Parol Evidence Rule (PER)

PER is implemented due to the written contract Conducting “Essentiality Test”, if the sale person had not stated the false statement that the machine can work in any weather, Thomson will not be induced into the contract Thus, this term is important which can be incorporated into the contract within the scope of the first exception

c) Condition or Warranty?

As both incorporated terms are significant, they are Condition terms as proving in the

“Essentiality Test” above

d) Disclaimers

There are disclaimers that Farm Machine Ltd will not be responsible for injuries from machine

utilization Even though it is contained non-contractual document, which is description (Le Mans Grand Prix Circuits Pty Ltd v Iliadis 19 ), it is conjunct to the clause of written contract that the

description has to be read Therefore, a reasonable person will carefully read terms and clauses as well as description which stated in the written contract This is sufficient notice Therefore, the losses and damages of Thomson is fallen within the scope of disclaimers, hence, Farm Machines Ltd will not be responsible for these losses and damages

e) Unilateral mistake

Thomson believed in the false statement of sale person which is a mistake (Taylor v Johnson 20 ).

Furthermore, the mistake is important to the contract Additionally, a reasonable sale person has

to know about products Thus, the staff might know this mistake and take advantages from it This proves that there is unilateral mistake

19 Le Mans Grand Prix Circuits Pty Ltd v Iliadis [1998] 4 VR 661

20 Taylor v Johnson (1983) 151 CLR 422

f) Misrepresentation

Even though the machine cannot work under wet condition, the sale person communicates to Thomson that machines can work regardless the weather condition This is a false statement which can be verifiable by third-party through utilizing them in various weather The reasonable notice was delivered to Thomson before contract formation The false statement is important to Thomson which induces Thomson into contract Hence, this is misrepresentation

2) Australian Consumer Law (ACL)

Thomson purchases machines for their businesses which is earning profits Thus, Thomson is not defined as a consumer (ACL s 3 – Cited above in Adam v Thomson)

a) Misleading (Section 18 of ACL)

Non-consumers are still eligible to ACL s 18 21

Sale person demonstrates false statement which machines can work regardless weather condition This is in trade and commerce and a part of ongoing business as Farm Machines Ltd sells machines for profits

Based on “Objective Test”, a reasonable buyer will trust the sale staff who can consult to figure

out the most suitable products (Taco Company of Australia Inc v Taco Bell Pty Ltd – Cited

above in Hugo v Farm Machines Ltd or Thomson v Farm Machines Ltd.) Hence, this would induce Thomson into fundamental errors

3) Conclusion of the crucial legal issue

Thomson can successfully sue Farm Machines Ltd Thomson can negate the contract under Misrepresentation in Contractual Law However, Thomson will receive more protection and remedies if he sues under Misleading in ACL Thomson will be prevailed

Case Note Question

21 ACL s 18

1) Introduction

On 19 June 2018, Senior Member K Ross, who is the judge, determine the case of Kadiroglu v Australian Motor Homes Pty Ltd and Knotts Investment Pty Ltd

2) Legal issue identification

The plaintiff is Kadiroglu who sue the defendant “Australian Motor Home Pty Ltd and Knotts Investment Pty Ltd” to look for compensation for their losses and damages On 18 August 2016, the plaintiff enters the contract of purchasing new Avida CV at $77320 from the defendant to take a trip around Australian in 12 months At the time of collection, the one drawer handle was loose which has been amended immediately After that, in the trip around Australia, the van has emerged many issues such as braking issues, side bowing out and water leak However, these issues have made the car in non-operating condition Even though the plaintiff has attempted to fix it in services location, there are significantly delaying in fixing the van Thus, the judge has to decide whether the defendant violates ACL s 54, s 55 and whether this conduct is major failure to determine the compensation

3) The judgement

a Whether the plaintiffs are consumer

The plaintiff acquired the van to take a trip around Australia for 12 months which is a personal purpose Hence, the plaintiff is a consumer under s ACL s 3 regardless whether value of products surpass $40000 This decision is convincing and flawless

b Whether the van is acceptable quality (ACL s 54) 22

I agree with the judge’s decision in this determination The plaintiff has not provided evidence to prove that the van has structural fault which are extensive water damage and the bowing of the wall I agree that the van was supplied in acceptable appearance and finish However, it is not free from defects There are defects in fridge and stove, cupboard handles, pumping wire and hose Additionally, there is no evidence to show that at the supplying time, the van was unsafe Lastly, these issues are minor issues which are excepted the structural faults The whole van is concluded as a durable van with minor issues Thus, the judgement is convincing and flawless

c Whether the van is fit for disclose purpose (ACL s 55) 23

The plaintiff communicates to the defendant that he intends to utilize the van for traveling around Australia for 12 months Moreover, the bowing walls and saturated floor made him stop his trip However, there is no evidence that these significant issues have happened by witnesses I agree that the electric step has not been amended in reasonable period of time Thus, it is not suitable to use for disclosing purpose The decision is convincing and flawless

22 ACL s 54

23 ACL s 55