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Analysis of First Case

Discuss about the Business Laws for Dodgy Pty Ltd.

In this context, the case of Bill and Jill describes that they contracted with seller Dodgy Pty. Ltd. in this contract; the seller dishonestly stated that the weekly taking of the café is $10,000. The seller also put a term related to the estimation of the per week business cost $3000. But the buyers found that the weekly taking was just below than the weekly business cost. Therefore, Bill and Jill were to remedies against the seller.

The principles of Australian business law force the organizations and individual to make the contract to comply with the legal terms for avoiding unexpected outcomes. The principle of Australian Consumer Law (ACL) includes a term related to unfair contract terms and suggests the standards that should have to use during the contract making between seller and buyer (Ibp Inc., 2013). According to this act, the seller may not use wrong or misleading or deceptive terms that can affect the decisions of buyers.

In the context of Australian law of contract, there are many cases that enhance the understanding towards the legal consequences related to a contract. 

Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1

In this case, the court held that the seller can be responsible for his or her wrong statement that manipulates the decision of the buyers. But the seller will pay only for the loss that would be reasonable rather more than real loss (AustLII, n.d.).

Alcatel Australia Limited v Scarcely and Ors Matter Nose Ca [1998] NSWSC 483:

In this case, the court held that a contract should be made on the basis of good faith otherwise; the loss gaining party because of bad faith may demand the damage of their loss (AustLII, 2016). It means Jill and Bill can demand for their loss because the seller did not use the good faith to make the contract for café.

Nash v Inman, [1908] 2 KB 1

In this case, the court held that the contract made with the minor can be applied in only such condition, if it will relate to the improvement in their social life status (Clarke, 2010).

Both the statute and common law restrict the minors to make contract. The general rule of common law describes that the contract made by minor is voidable, if the contract is made for property, land, money or business (Tomasic, Bottomley & McQueen, 2002). This is because the common law does not believe that a minor can fulfill his or her obligations. It means if a person makes enforceable contract with a minor when the minor has the right to cancel the contract or deny by performing any action as per the terms of contract (Ibp Inc., 2013). The contract law of Australia also describes that the contract can only take place between eligible persons only.  

Understanding of the Australian Business Law Principle

As per the above cases and the description of the principles of contract law, it can be stated that the followings are some remedies to the buyers against the seller.

  • Jill can also void the contract because of the involvement of a minor such as bill, who has not eligible to make the contract for the business or property.
  • Buyers can ask compensation for their loss due to the use of wrong statement related to weekly collection in the contract.

Hugh runs a business, which produces pizza. To deliver the pizza, UberEats is used by Hugh to serve the customers in Sydney. This type of food delivery services helps Hugh to increase sales in Sydney. To cut the delivery cost, High and Theo started to use their own vehicles rather UberEats but they do not register any document related to this. But they do not make any kind of change in the existing advertisement and use Uber to deliver its pizza to customers. To reduce operation cost, Hugh decides to replace the use of out date cheeses in pizzas. They state through advertisements to their customers that Homeslice uses only freshest ingredients and they use chesses directly from customers. But, several customers get sick and one dies after consuming stale and out of date ingredients.

Each state of Australia has Fair Trading legislation related to deceptive or misleading conduct by anyone. In this context, section 18 of Australian Consumer Law (ACL), a person cannot and should not engage in deceptive or misleading conduct (Morandin & Smith, 2011). Schedule 2 of the Competition and Consumer Act 2010 prohibits the corporations’ conduct in commerce or trade by deceptive or misleading to mislead the customers. The section 52 of “Trade Practices Act” (1974) was also related to deceptive conducts which was supplanted by Competition and Consumer Act (CCA) 2010 (Latimer, 2012). As per this law, followings are some elements to establish deceptive or misleading conduct are:

  • Conduct as impugned was done during the commercial or trade activities;
  • The impugned conduct caused misleading or deceptive behavior against individual or group of people (Esmaeili & Grigg, 2016);
  • The plaintiff relied on the defender’s conduct; and
  • As a trust on conduct and its result, the plaintiff or claimant got a loss.

Therefore, the main aim of the doctrine is to provide protection to consumer from any misleading behavior of organization by deciding the action of the defender under the terms of strict liability. These sections of law also provide several remedies to customers against the misbehavior or deceptive conducts of the organizations.

In above case, Australian Competition and Consumer Commission (ACCC) claims Google Inc has violated the section 52 of the Trade Practices Act 1974 (Cth) because its search engine displayed deceptive and misleading information during the search (High Court of Australia, 2013). This event has taken place between 2005 and 2008. In the reference of this case, the court held that the organization of the Google search engine can be liable for deceptive conduct, if it uses promotional method to represent the information to the customers (High Court of Australia, 2013). But, the characteristic of Google describes that it does not offer anything to customers directly therefore, it may not be liable for the misleading conduct.

Relevant Cases

The rule related duty of care means the fulfillment of entire necessities from manufacturer of products before the delivery of the customers to satisfy the needs of customers. In the above case, the court states that there is a close relationship between manufacturer and consumer because it is a duty of the manufacturer to provide the quality products to customers with the safety of customers (Fitzroy Legal Service, 2016). As per this, it can be concluded that the manufacturer should have to fulfill the obligations related to duty of care.

According to the judgment in the given case, a person who has the duty is to serve the customers but he has not fulfils the obligation, then this situation will called the breach of duty. The breach of duty is also established in above defined case. In the case, the district court states that it is a duty of the teacher to work for the welfare of student in the place of intimacy inside or outside of the school. Hence, the action of teacher to seduce the student is an example of breach of duty towards the students (Carternewell Layers, n.d.). Similarly, it was the duty of Hugh to use the quality cheese and other ingredients in the making of pizza, while the case defines that they were using out dated cheese that only caused a negative impact on human health.

In the above case, the plaintiff loosed money due to the use of chemical in a product. As a result, the plaintiff spent more than three months in the hospital to recover health. In this case, court describes that the injury of the customer is form of damage that is required to establish the tort of negligence (Goodden, 2009). Therefore, the manufacturer of the product would be liable for the loss of customers. 

In the given case, the above defined principles of CCC and ACL can be applied to define the responsibility of the manufacturer towards the loss of the customers, which take place after the consumption of pizza. 

The sections related to misrepresentation of information and use of unfair business practices will help the plaintiff or the customers of Hugh to get compensation for their damage from the manufacture of pizza. This is because they did not only use the wrong information related to services but also used outdate ingredient by naming fresh ingredients. As a result, the court can be able to give the judgment in favor of plaintiff.  

References

AustLII (2016) Alactel Australia Limited v Scarcella & ORS [Online]. Available at: https://www.austlii.edu.au/au/cases/nsw/NSWSC/1998/483.html (Accessed: 14 September 2016)

AustLII (2016) GATES v. The City Mutual Life Assurance Party Society(1986) 160 CLR 1 [Online]. Available at: https://www.austlii.edu.au/au/cases/cth/HCA/1986/3.html (Accessed: 14 September 2016)

Carternewell Layers (n.d.) Australian Civil Liability Guide, 9th ed [Online]. Available at: https://www.carternewell.com/Australian-Civil-Liability-Guide-9th-Edition/index.html#87/z

Clarke, J. (2010). Nash v Inman [Online]. Available at: https://www.australiancontractlaw.com/cases/nash.html (Accessed: 14 September 2016)

Esmaeili, H. & Grigg, B. (2016) The Boundaries of Australian Property Law. Australia: Cambridge University Press.

Fitzroy Legal Service (2016) Duty of care [Online]. Available at: https://lawhandbook.dev.jed.cecc.com.au/handbook/ch06s03s02.php (Accessed: 14 September 2016)

Goodden, R.L. (2009) Lawsuit!: Reducing the Risk of Product Liability for Manufacturers. USA: John Wiley & Sons.

High Court of Australia (2013) Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 [Online]. Available at: https://eresources.hcourt.gov.au/showCase/2013/HCA/1 (Accessed: 14 September 2016)

Ibp Inc. (2013) Australia Business Law Handbook Volume 1 Strategic Information and Basic Laws. Int'l Business Publications.

Latimer, P. (2012). Australian Business Law 2012. CCH Australia Limited.

Morandin, N. & Smith, J. (2011) Australian Competition and Consumer Legislation 2011. Australia: CCH Australia Limited.

Tomasic, R., Bottomley, S. & McQueen, R. (2002) Corporations Law in Australia. Federation Press. 

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