Assessment task 3 will primarily assess your IRAC skills (i.e. the ability to identify the legal issue, the ability to identify legal rules, and the ability to apply the legal rules to solve legal problems). All of the topics of the course are examinable.
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Table of Contents Task 1: Problem-solving questions 3 Case 1: Ria v Maya 3 Case 2: Andrew v Ria……….3
Case 3: Maya v Duyen……… 4
1 Common Law………4
2 Australian Consumer Law (ACL)……….6
Task 2: Case Note questions 8 Introduction 8 Identification of legal issues 8 Critical analysis of the judge’s application of the legal rules to solve the legal issues….8 Conclusion……….9
Trang 7TASK 1: PROBLEM-SOLVING QUESTION
Case 1: Ria v Maya
Legal issues
The main issue here is whether Ria can sue Maya for breaching the modifiedcontract of an extra $2,000 payment considering the original contract?Additionally, 5 supplementary issues are [1] whether there is a binding originalcontract of $35,000 between Maya and Ria, [2] Whether the binding contract ofextra $2,000 payment exists, [3] Whether the agreement had been made, [3]Whether the consideration is valid, [4] Whether both parties had a legal intention
to be bound by the contract
Rules and Application
There is a binding contract between two parties if 3 elements: Agreement1,Consideration2, and Intention to be bound3 were valid
There was a legally enforceable contract of $35,000 payment between Maya andRia There were no issues in this original contract and both parties performedfully their legal obligations as Ria finished work on schedule and Maya paid
$35,000 to Ria
1 Smith v Hughes [1871] LR 6 QB 597
2 Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87
3 Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42
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Trang 8Due to the water leak, Maya offered to pay an extra $2,000 to Ria for completingwork on time The offer was clear and contained all key details4 and was
communicated to Ria (R v Clarke5) Hence, Maya’s offer was valid However,
there is no evidence that Ria actually communicated with Maya about whether
she accepted the offer Based on Felthouse v Bindley6, Ria’s acceptance wasinvalid Thus, no agreement was established and no intention to be bound
Ria made an insufficient consideration because solving leak problem is also hercontractual obligation imposed by the original contract to get Maya’s houseready, which isn’t beyond the scope of this contract7 Ria’s consideration isinvalid Overall, there is no binding contract of paying additional $2,000
Conclusion
The binding contract of $35,000 payment exists Ria can’t sue Maya forbreaching the modified contract of extra $2,000 payment and Maya had the rightnot to pay extra fee to Ria
Case 2: Andrew v Ria
Legal issues
The main legal issue is whether Andrew can sue Maya for breaching a contract
of purchasing curtains from Fab Curtains? The subsidiary issues are: [1] Whetherthere was a valid binding contract between both parties [2] Whether the
Trang 9revocation is valid, [3] Whether Ria owed Andrew the money for delivered
curtains
Rules and Application
Same rules are mentioned in case Ria v Maya
Ria made an offer of purchasing the No 30679 curtain with a 10% discount inPab Curtains Ria’s offer was clear, complete8 and well-communicated9 toAndrew by email Therefore, the Ria's offer was valid
Andrew accepted her offer by action of delivering the curtains for discussed price
on November 3 Ria explicitly remarked that she needed fabrics in two weeks,and Andrew delivered curtains within 10 days that satisfied the requestedschedule Thus, Andrew’s acceptance was effective when the original invoice
was mailed on October 28 under Postal rule (Adams v Lindsell)10 His acceptancewas certain and complete11; that was communicated12 to Ria on 28 October,expressed in the invoice alongside Hence, the agreement is valid Ria arranged
to return curtains on 3 November but Andrew accepted offer on 28 October, soRia failed to communicate her revocation to Andrew before his acceptance
(Dickinson v Dodds)13
8 Mildura Office Equipment & Supplies Pty Ltd v Cannon Finance Australia Ltd above n 4
9 R v Clarke above n 5
10 Adams v Lindsell [1818] 1B & A 681
11 Scammell and Nephew Ltd v Ouston above n 4
12 Felthouse v Bindley above n 5
13 Dickinson v Dodds (1876) 2 Ch D 463
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Trang 10Both considerations were valid as they were sufficient14 to include all legal values
to exchange between two parties Andrew would deliver No.30679 curtains toRia on time, and Ria would pay the discussed price to Andrew There was anintention to be bound in business context because they engaged in a purchasingagreement
All elements are satisfied so this legitimate contract was established
Conclusion
Andrew can successfully sue Ria for breaching the contract of purchasingcurtains from his business Therefore, Ria still must pay money to Andrew forcurtains delivered on time from Pab Curtains
Case 3: Maya v Duyen
I COMMON LAW
Legal issues
The main legal issue is whether Maya can sue Duyen for breaching the contract
of providing food and drinks service? Besides, supplementary issues are [1]Whether there was a binding contract between Maya and Duyen, [2] Whetheroutside statements can be incorporated as terms into the contract, [3] WhetherDuyen breached any the outside statement, [4] Whether the breached term is acondition, [5] Whether disclaimers help Duyen escape liability from breach ofcontract
Rules and Application
1 Formation contract
14 Biotechnology Australia Pty Ltd v Pace above n 7
Trang 11Same to case Ria v Maya, there was a binding written contract between two
parties since Maya signed the written contract prepared by Duyen Moreover,Duyen did provide food and drinks on schedule to Maya
2 Breach of contract
a Outside statements
In this case, there were 2 verbal statements 1st is that no food would contain ingredient and 2nd is that cleaning-staff would be provided to help Maya after theparty
fish-Regarding 1st statement, this is a guarantee from Duyen that no food will contain
fish (Chandelor v Lopus15), that can be verified easily (Handbury v Nolan)16;
communicated via phone-call and agreed by both parties (Causer v Browne)17,before the contract was formed18 Hence, reasonable notice was given Mayastated specific request about no fish in food as her mother would be allergic tofish seriously To ensure her mother’s safety, this statement is very significant,which entitles it to be first exception of PER19 Hence, it is incorporated into thecontract as an express term20 The incorporated term was breached becauseDuyen included fish-ingredient in food
15 Chandelor v Lopus (1603) 79 ER 3
16 Handbury v Nolan (1977) 13 ALR 339
17 Causer v Browne (1952) VLR 1
18 Thornton v Shoe Lane Parking (1971) 2 WLR 585
19 Van den Esschert v Chappell [1960] WAR 114
20 L’ Estrange v F Graucob Ltd [1934] 2 KB 394
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Trang 12For 2nd statement, Duyen promises to send cleaning-staff21, that is verified22 andcommunicated to Maya23 before the contract formation24, expressed a reasonablenotice However, it isn’t significant enough for the contract since Maya stillenters the contract, even if she knows the cleaning-staff is absent As what Mayareally needs is the presence of appropriate food, not cleaning-staff Thisstatement can’t fall into the first exception of PER25 so it can’t be incorporatedinto the contract as legal term26.
b Essentially test
Applying “Essentiality test”27, Maya wouldn’t enter the contract if she knewincorporated term would be breached, hence the breached term was a conditionthat Maya can terminate the contract and claim damages28
c Disclaimer
Determining whether three disclaimers in this case satisfy 2 conditions foreffectiveness The first disclaimer, involving Duyen being irresponsible for foodallergies caused by reasonable substitutive ingredients, is mentioned as a legalterm in the written contract29 Maya requests no fish-ingredient food so areasonable person would know that fish wasn’t reasonable substitution Thus, thebreach of the contract went beyond the scope of the disclaimer, makingdisclaimer be ineffective
21 Chandelor v Lopus above n 15
22 Handbury v Nolan above n 16
23 Causer v Browne above n 17
24 Thornton v Shoe Lane Parking above n 18
25 Van den Esschert v Chappell above n 19
26 L’ Estrange v F Graucob Ltd above n 20
27 Tramways Advertising v Luna Park (1938) 61 CLR 286
28 Poussard v Spiers and Pond [1876] 1 QBD 410
29 L’ Estrange v F Graucob Ltd above n 20
Trang 13The second disclaimer for no duty about allergies via email and the third, a sign
in “the box”, were also ineffective because they were communicated aftercontract formation30, so there wasn’t any reasonable notice Besides, the 3rd
disclaimer wasn’t a contractual document where a reasonable person is expected
to figure out contractual terms
Conclusion
Maya can sue Duyen for breaching the incorporated term Maya can have someremedies as terminate the contract and require damages, which included $5,000for her mother’s medical bill Disclaimers were ineffective to protect Duyen fromliability for contract breaching
3 Collateral contract
Legal issues
Whether the collateral contract is valid for the outside statement that can’t beincorporated into the contract
Rules and Application
The second verbal statement can be enforceable as a collateral contract following
help Maya clean up However, there was no evidence that providing staff was significant enough to induce Maya to enter the primary contract
cleaning-30 Causer v Browne above n 17
31 De Lasalle v Guildford [1901] 2 KB 215
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Trang 14The collateral contract for the verbal statement of sending cleaning-staff wasinvalid Hence, Maya can’t sue Duyen under breach of collateral contract sinceits insignificance
Rules and Application
The statement of providing food without containing fish, and sending staff after party were false which made wrong material fact, and directly
cleaning-addressed to Maya, after considering Derry v Peek32 However, only statement of
no fish in food was important enough to cause Maya to enter into main contract
Trang 15Subsidiary legal issues are: [1] Whether Maya was consumer, [1] WhetherDuyen’s conduct was misleading or deceptive breaching s18-ACL? [2] WhetherDuyen’s conduct was unconscionable under ACL-s20? [2] Whether the unfairterm is established under s23 of ACL by Duyen’s business?
Rules and Application
Disclaimer is ineffective in ACL
In this case, Maya had paid $18,000 for food and drinks service supplied byDuyen, which was below $40,000 and Maya acquired it for domestic purposes.Hence, Maya is a consumer as per s3-ACL33 and can receive the protectionsunder the ACL
1 Misleading or deceptive conduct
Duyen has made a promise to Maya to provide foods without fish-ingredients andcleaning-staff34 Duyen’s business was an ongoing business, operated to earnprofits35 Duyen pledged there wouldn’t have fish-ingredients in food and providecleaning-staff, but the reality is the opposite Applying “Objective test”36, anordinary reasonable person would be induced to believe Duyen’s statement andenter the error Thus, Duyen has engaged in misleading conduct under s18-ACL37
2 Unconscionable conduct
33 Australian Consumer Law (Cth) section 3
34 Ibid
35 Ibid
36 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982)
37 Australian Consumer Law (Cth) section 18
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Trang 16Duyen made clauses that she can replace the substantive ingredient38, and herbusiness is in trade/commerce (mentioned previously) Maya didn’t read the lastpage of the contract so she didn’t know it authorized Duyen to reasonablysubstitute ingredients in her judgment This is Maya’s weakness because shelacks contract information to deal with Duyen However, there was no evidencethat Duyen was aware and took advantage of Maya’s weakness Hence, Duyendidn’t engage in unconscionable conduct under s20-ACL39.
3 Unfair term
The clause given by Duyen that she had the right to terminate the contract if shecould not prepare enough food for the party, expressed unfairness that caused asignificant imbalance in the party’s rights and obligations when the mistake wascaused by business Furthermore, there was a standard form contract since it wasprepared by Duyen and accepted by Maya Under s23-ACL40, unfair term wasestablished
Remedies: Maya can sue the business, terminate the contract with Duyen ACL41) and aware damages under s236-ACL42
(s237-Conclusion
Maya can successfully sue Duyen for general protections under s18 aboutmisleading or deceptive and s23 regarding unfair terms in ACL
Specific protections
38 Australian Consumer Law (Cth) section 3
39 Australian Consumer Law (Cth) section 20
40 Australian Consumer Law (Cth) section 23
41 Australian Consumer Law (Cth) section 237
42 Australian Consumer Law (Cth) section 236
Trang 17Rules and Application
Under s23 (3)-ACL43, there is a consumer service contract because Duyensupplied food and drinks service to Maya44, as a part of her ongoing business45
(mentioned previously) and this is consumer service with $18,000 payment (lessthan $40,000), acquired for domestic use46
Duyen supplied food with inaccurate state for the consumer, causing her poisonsince she negligently forgot to preserve foods in the fridge Hence, Duyenbreached s60-ACL47 about due care and skill guarantee
Duyen breached the guarantee under s61 of ACL48 because she supplied based food and failed in sending cleaning-staff, which dissatisfied Maya’sdisclosed purpose before signing the contract
fish-Remedies: The failure providing unsafe foods including both rancid food andfish-ingredient food, was critical enough that a reasonable person wouldn’t enterthe contract if she identifies failure, it become a major failure under s260-ACL49
43 Australian Consumer Law (Cth) section 23 (3)
44 Australian Consumer Law (Cth) section 2
45 Ibid
46 Australian Consumer Law (Cth) section 23 (3)
47 Australian Consumer Law (Cth) section 60
48 Australian Consumer Law (Cth) section 61
49 Australian Consumer Law (Cth) section 260
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Trang 18Therefore, Maya can require a refund deposit of $1,000, and claim recovery forher damages.50
This case “Nguyen and Sy v The Trustee for the Nero CKD Unit Trust t/as View
by Sydney [2017] NSWCATCD 98” was judged by G.J Sarginson on 31 October
2017
Identification of legal issues
Applicants were Anh-Lan Nguyen & Walter SY, and the respondent was The Trustee for the Nero CKD Unit Trust t/as View by Sydney, with Ms Hobbs as respondent representative
Applicants held a wedding reception on 15 January 2017, for which therespondent was the event organizer There was a water leak when the weddingreception happened that caused inconvenience and dissatisfaction for applicantsand their guests The applicants argued that due to respondent’s bad service, theirwedding was delayed and more costly for photographs, they can sue respondentsand seek damages of $20,000
50 Australian Consumer Law (Cth) section 259