The Business And Contract Law Assignments - MyAssignmenthelp.com

Questions: 1. Explain how the contracts Avinash made with the caf were formed. You will need to address all the essential elements of a contract, as well as analyse the legal status of each step or event that led to the caf supplying Avinash with its products. Refer to relevant case law. In this part, do not discuss the impact, if any, of consumer protection laws. You may, but are not obliged to use the IRAC format for this part, given that each step or event must be analysed separately. 2. Explain whether the caf is legally entitled to rely on the clause printed on the ticket to avoid liability in relation to Avinashs injury. For the purposes of this part you should consider both common law as well as legislation .Please use IRAC format for this part. Answers: Answer 1 Issue The main issue of this case revolves around the formation of contract between the local caf and Avinash. Rule Contract law is covered under the common law. A contract denotes the legally binding contract made by the parties of contract to carry out the promise on which the contract is made. It can be formed merely by speaking the terms of contract, resulting in oral/ verbal contact. Otherwise, it can be formed by putting the terms in a document and getting the same signed by parties of contract. In order to form a contract, some elements have to be present, which include offer, acceptance, consideration, intention, capacity, and legality. When all these elements come together, a contract having legal validity is created[2]. In order to begin with the formation of a contact, the first step which has to be taken is the offer to be made by the party. This offer has to provide the terms which are being offered by them to the other party. An offer is quite different from an invitation to treat and there is a need to make a difference between whether the communication which has been made is invitation to treat and an offer[3]. The difference in legal terms between the two is that offer results in contract being formed, whilst an invitation to treat does not, as the former has intent of being bound legally, whilst the latter has the intent of negotiation on the possible terms of contract[4]. Pharmaceutical Society of Great Britain v Boots[5] provides clarity in this matter. This case saw Boots introducing a new system of self service in the shop which they owned whereby the customers had the option of picking the goods kept on the shops shelf, putting them in their basket and taking them to the cashier for paying for the chosen product through cash. The claimant initiated a claim whereby they asked the court to determine the legality of the self service system. This was due to the fact that a pharmacist had to be present when pharmaceutical products were sold in public. The point of contract being formed was questioned here. The court analysed the case and stated that the goods on shelf of shop are invitation to treat. These convert into an offer when the consumer picks the goods and takes them to the assistant of shop for paying in cash. The shop assistant then gets the opportunity of giving acceptance to this offer or not. This is when the pharmacist had to be present[ 6]. The next step in formation of contract is acceptance whereby the party to which the offer is made has to be accepted in a time based manner. Also, Hyde v. Wrench[7] puts forth the requirement of accepting the exact terms of offer, otherwise a counter offer is resulted. The next step required in creating a binding contract is the presence of consideration. The contract needs to have valid consideration, which is mutually decided between the parties, and which would be valid as long as it holds economic value[8]. The next element is intention of the parties to be bound in a legal manner, due to getting in the contract, which gives them contractual rights and even possible contractual liabilities[9]. The contracting parties need to have the contractual capacity to get in a contract, which is usually in terms of their legal age, amongst the other factors. The terms of the contract also have to be legal, and cannot be unfair or against any statute. Application There is a stark similarity between the scenario given in the case study and the established case of Pharmaceutical Society of Great Britain v Boots. This is the reason why the ruling given in this case is applied in the present context. Here, a contract had been created between the local cafe and Avinash when he put his order by touching the screen. His offer had been accepted upon the ticket being generated. To put it in detail, during the time when Avinash was scrolling the menu of the local cafe, it was an invitation to treat. When he selected a product to be ordered, and selected the same on the machine, an offer was made by him, which the local cafe had the option of accepting or rejecting. The consideration value here is of $7.50 and the contractual term includes food products. The acceptance was in form of ticket generation. The intent and capacity are assumed to be present as nothing shows otherwise. Conclusion To conclude, a contract had been created based on the facts given, between the local cafe and Avinash. Issue The main issue of this case revolves around the reliance to be successfully placed by the local cafe on the ticket which was printed for avoiding their liabilities arising from injuries sustained by Avinash. Rule There are different terms in contracts and one of such terms is exclusion clause. As per this clause, the liability of the inserting party can be limited or restricted, in case of certain occurrences. In order for the exclusion clause to fulfil its purpose, it has to fulfil certain requirements. This includes proper insertion of the same in contract and the same being brought before the attention of the parties. Thornton v Shoe Lane Parking Ltd[11] proves helpful in this regard, where a parking ticket was generated from the machine when a driver got in the parking lot and paid the parking fees. Here, the driver was bounded by the ticket, even before it had been brought to the attention of the driver. Basically a contract gets formed on the ticket being taken. Here, the exclusion clause was not brought to the attention of parties before contract was formed and so the exclusion clause printed at the backside of ticket would not be deemed as a proper insertion of exclusion clause and no r would be deemed as properly displayed. Thus, when the car is damaged at parking lot of company, the damages would have to be paid by the company. The Australian Consumer Law (ACL)[12] is covered under the Competition and Consumer Act, 2010[13], which safeguards the interests of the consumers in the nation. As per section 3 of ACL, a person is deemed as a consumer when they make purchase of goods or attain services, the sum of which is less than $40,000, for their personal use or consumption[14]. Section 60 of ACL provides that the contracts for supply of services come with an implied warranty for the services to be given in a manner of care and with proper skill[15]. The other relevant provision here is section 64 of ACL, which provides that a contractual term becomes voided, where the purpose of this term is to amend, exclude or alienate the consumers rights for relying on the regime of consumer guarantees[16]. Application There is a stark similarity between the scenario given in the case study and the established case of Thornton v Shoe Lane Parking Ltd. This is the reason why the ruling given in this case is applied in the present context. In the case study also, the exclusion clause was printed at the backside of the ticket generated from the machine, and this was not brought to Avinashs attention. Upon merely ordering his food order, he was served with the ticket, which was the receipt for the purchased good. For holding this exclusion clause as valid, the cafe should have displayed it prominently, put it separately, or brought to the attention of Avinash before the contract was formed in terms of Avinash paying the sum for goods and the cafe accepting the same. Thus, the exclusion clause based on the common law would be invalid in this case. So, for the injuries sustained by Avinash, the cafe would have to reimburse Avinash. Avinash would be deemed as a consumer pursuant to section 3 of the ACL owing to the food order being for his own consumption and the amount of this being less than $40,000. As a result of this, sections 60 and 64 can be applied on him. Based on these two sections, the local cafe could not deny the liability which they owe to Avinash as the services provided by them were not done in a careful manner as per the requirements of the applicable sections. Further, the local cafe had no right of modifying, excluding, alienating or restricting the rights of Avinash for getting a product which was safe for his or any other consumer. Care should have been taken by cafe in preparing the food product which was not done. Conclusion To conclude, reliance cannot be placed by the local cafe on the ticket which was printed for avoiding their liabilities arising from injuries sustained by Avinash. Answer 2 In the contracts which are formed, there are two types of terms, i.e., the express terms and the implied terms. The express terms are the ones which clearly state what has to be done and what the rights or liabilities are. The implied terms are the ones which provide in an implied or obvious manner, and during the negotiation phase of contracts, these are usually brought to the parties attention[17]. The presence of the former term cannot be denied, but the same can be done for the latter term. In the following parts, it is shown that even though there appears to be difference between express and implied terms, these are almost the same. Before showing the manner in which the two terms are varied, there is a need to highlight the difference between the two terms. The initial point of differentiation between the two is in their definition. Express terms are clearly stated in the contract, in an explicit manner, on what has to be done, and what has to not be done. The implied terms are the ones which stem from the expressed contractual terms, which have not been mentioned by any of the parties of the contract in the contract; nevertheless, they still form a part of the contract. Here, when the two terms are carefully analysed, it becomes clear that the implied terms are stemmed from the express terms. So, they are quite similar in nature. Due to the similarity in nature, they are not required to be stated again. A key difference between the two is that the express terms can be claimed upon easily, but the same is not an easy task for the implied terms. In other words, where the express terms are disputed, they can be clarified by reading the contract on which they are stated. However, when it comes to the implied terms, any of the contracting parties can deny the presence of the same. In such cases, the court plays the role of deciding upon the presence of implied term. Again, a careful analysis of this depicts, that even the express terms require court to play an important role, where they read the express terms when they are ambiguous, to decide upon the meaning and their presence. And at times, the implied terms are not included contested upon, as these are understood based on the contract taken place[18]. For instance, based on the applicability of ACL in the previous case, even though it was not stated that the provisions of ACL had to be followed, but it was implied that the same was n ot done. By not following these provisions, the cafe was made liable, even when the same was never expressly stated in the contract formed between the local cafe and Avinash. To conclude, even though the express and implied terms are varied in their generic sense, they are more or less the same and are present in the contracts in a parallel manner. 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Wrench (1840) 3 Beav 334 Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401 Thornton v Shoe Lane Parking Ltd (1971) 1 All ER 686 Competition and Consumer Act, 2010 (Cth)