a) Explanation of whether the parties had entered into a contract
A contract can be defined as an agreement that is enforced by the law. In other words, contract can be presented as a set of promise or promises that are legally enforceable by the court of justice. The Australian Contract Law represents the set of regulations that legally enforced promises that are made through free bargain between two different parties to form a legal relationship. The first answer presents the case scenario between Lianne (Consumer) and Mary (Seller) to explain whether the parties have legally entered into a contract. Additionally, the answer discusses the elements of contract, important clauses for making a contract legal and different case examples in order to know whether both the parties have entered into a valid contract through email conversation or not.
In the case of Lianne and Mary, it can be seen that Lianne wants to give a midyear party to his friends, for which she was searching for a party organizer. On the other hand, when she contacted Mary over email with all her requirements, she got a quote of $10,000 for 20 people to conduct the event. However, Lianne felt that the quote is too high and asked Mary for negotiation. Hence, Mary sent a counter offer of $9,500 which is valid for 7 days. But, Lianne did not reply over the offer which made the contract incomplete as she did not accept it within the valid period.
Later on, when Lianne again asked Mary for the same party on 20th June, the offer got invalid and Mary sent a new offer with increased cost at $10,000. This time Lianne accepted the offer, but her acceptance was not considered by Mary and she was unable to send a confirmation mail. However, within 30 minutes, Lianne changed her mind and said that she wants this deal to be off. During this period, Mary was unable to send a confirmation mail for the order and no contract or agreement was made between both the parties.
It is important to understand several necessary elements to form a valid contract. The major elements of a valid contract include offer, acceptance, consideration, competency and capacity and written instrument in certain circumstance. Firstly, any one of the party must make an offer and the second party has the option to either reject the offer or accept it. In the case of rejection, the second party can send a negotiated offer and the first party has to accept it or send a counter offer. An offer until and unless not accepted by both the parties is not considered as a valid contract. Furthermore, it is important to see whether both the parties have certain mutual consideration from the offer or not. For instance, the buyer will be benefited by the product or service and in exchange the seller will receive the price for the product or service. Additionally, in order to form a valid contract, the both the parties must have competency and capacity to meet the terms and conditions of the agreement. A contract made with a minor is not considered as a valid contract. Finally, in some cases the contract must be formed as a written document properly legalised by the court to make it valid. A verbal contract in terms of sale and purchase of a product or service is not considered valid.
In order to make a contract valid through online conversation, it is important for the both the parties to confirm or accept the offer to make form a legally enforceable agreement. In other words, the buyer needs to accept the order of the seller and the seller need to confirm whether the order with all terms and conditions after the acceptance of the offer by the buyer. If the court case of Hyde V Wrench (1840) is considered, it can be seen that both the parties do not finally accept the offer or counter offer that makes the contract void. In this case, it can be seen that the seller makes an offer of selling a land for $1,200. However, after the rejection of the offer by the buyer, the seller sends a counter offer for the same land at $1,000. At first the buyer rejects the offer and then again accepts it. Hence, it can be seen that the contract is invalid as none of the parties have finally accepted or send the confirmation of acceptance of the deal. In the same manner, the cases of Leicester Cirvuits Ltd Vs Coates Brother Plc (2002) and GHSP Inc Vs AB Electronic Ltd (2010) were also rejected by the court due to the failure of the formation of proper contract between the parties.
In all the above cases, the both the parties do not accept or confirms the final acceptance in written format. The contract or agreement is not formed between the parties that makes the terms and conditions void and legally unenforceable. In the same manner, if the interpretation between both the parties is considered incorrect, still yet the contract is not formed as none of the parties have a written proof of acceptance of the offer and confirmation of the deal by the seller. However, in the case of Lianne and Mary, it can be seen that the acceptance of the offer made by Lianne was not confirmed by Mary before Lianne refused to proceed with the deal. Hence, it can be clearly that none of the parties have entered into a contract according to the interpretation of the events.
On the basis of the above discussion, it can be seen that none of the parties have lawfully entered into a contract. Lianne has not accepted the offer or counter offer made by Mary. Hence, there is no chance of accepting the offer later on. However, on 20th June when Lianne sent her acceptance of the offer, the contract would have been formed if Mary would have sent a confirmation mail. But, the failure of sending a confirmation mail before the rejection of the deal has made the contract invalid. Conclusively, it can be seen that both the parties have not entered into a contract.
b) Rights of Lianne in case of breach of contract by Mary
The right of the consumer should be known by the customers if they feel that the service provider is cheating them. In this particular case, assuming a case scenario, the right of the consumer has been elaborated. Furthermore, the study connects the case scenario with a court case where the service provider breached the contract and delivered unsatisfactory services to the consumers. Also, the verdict of the case scenario has been presented in the discussion as well.
In this particular case scenario, it has been stated that a contract was formed between Mary and Lianne regarding the Malaysian theme based boat party. The contract was created on July 30 at a price of $9,500. On the event date, Lianne has discovered a number of negatives in the provided services. For instance, the food supplied by Mary was completely different from which was promised in the contract. In place of Malaysian cuisine, Lianne and her friends were offered Russian-style food. Also, the accommodation given by the service provider was too nominal to be precise considering the payment made by the consumer. The boat was not fit for the number of guests as it was extremely cramped. In such scenario, Lianne complained to Mary to get the compensation for such poor service.
Under the Australian Consumer Law, Part V of the Trade Protection Act 1974 (Cth) has provided to identify the right of the consumers in case of breaching a contract. The Section 52 of the Trade Protection Act 1974 (Cth) prohibits the service providers to conduct such promises that can be deceptive or misleading for the consumers. In case of violation of the agreement, consumer can file compliant under the law. Under the Section 53(e) of the Trade Protection Act 1974 (Cth), service providers or a company should not mislead the consumer about the price of an offered service.
In a court case of Jarvis versus Swans Tours, the plaintiff Mr Jarvis had been denied the services under their service contract. Mr Jarvis booked a skiing holiday package in Switzerland under the service of Swans Tours following the information brochure issued by the company. In reality, the plaintiff discovered that the offered services were completely different from what was in reliance with the contract brochure. Disappointed by the services, Mr Jarvis filed a case against Swans Tour seeking compensation. Evidently, the court ruled in his favour awarding 125 pounds in compensation against the original tour package price of 63 pounds. In the same manner, as Lianne has not received the promised services though an agreement has been made, she can apply the section to get the compensation under consumer right.
By identifying the rights of the consumer and the legislation to deal with such issue of breaching contracts, Lianne can file a suitable case against Mary seeking damage compensation. Clearly, Mary denied the services listed in the contracts and it can be easily considered as a breach of contract. By filing a court case, the plaintiff can be compensated for the loss of entertainment.
In Australia, publishment of advertisements in different media such as TV, radio, print, or the internet has been controlled under the Australian Consumer Law i.e. the Consumer and Consumer Act 2010 (formerly known as the Trade Practices Act 1974). Advertisement publishment can be identified as one of the most comprehensive practices in modern trade and business scenario. By using a number of advertisement platform, companies offering products or services through advertisement to reach towards the target demographics. Precisely, the contents of the advertisement are designed in a certain way that can create a considerable impact on the mind of the target audience. Hence, by considering the fact honesty and integrity must be delivered through the advertisements so that consumers should not be trapped. In this study, the discussion has been made to evaluate that any business advertiser must be careful about the statement and disclosures made in their advertisement. Evidently, the business advertisers must understand that every advertisement delivered to the target market audience should follow the guidelines and legally ruled developed by Australian courts as well as the Parliament of Australia. In the meanwhile, the study has been developed ensuring that business advertisers should have identified the legal obligations of marketing and avoid misleading statements.
The national law of Australia i.e. the Consumer and Consumer Act 2010 is responsible for fair trading practices and consumer protection. Moreover, the Australian Federal Government’s agency named the Australian Competition and Consumer Commission (ACCC) has been authorised to maintain fair trade practices protecting the consumers from any damage. Furthermore, the regulatory authority has the power to regulate the infrastructural development of the industry. The Australian Consumer Law has been accountable for almost everything and anything related to marketplace even the advertisements published by the business advertisers to promote their products or services. In order to maintain and influence the fair trade policy protecting the rights of the consumers, the ACCC has published guidelines for advertising and selling to be read by the business advertisers. Understandably, such guidelines restrict the business advertisers to deliver misleading statements about the products and services offered to the target demographics.
The ACCC has recommended that honest advertisement practices should be followed by the market advertisers as the Australian Consumer Law is very strict in this regard. Precisely, in order to promote the advertisement for selling a product or service, the law has provided a number of regulations to be followed so that consumers’ right as well as fair trade policy will be upheld. In the underlying section, a few of the rules have been described as follows:
- Misleading Statement: As per the ACL, the misleading or false statement should not be promoted through advertisements. The business advertisers must provide accurate information about the products and services. In case of found guilty, advertisers should be imposed fines for misleading the consumers. In case of false statement or content, it will not matter if the false statement was intentional or unintentional.
- Using Social Media Platform: In case of promoting advertisements in the social media networking sites such as Facebook, Twitter, and YouTube etc by developing channels, advertisers should be taken the responsibility of providing accurate information and description of the products. As social media networks directly connect the target audience with the advertisers, strict advertising guidelines must be followed by the business advertisers to avoid misconception.
- Managing Online Reviews:Reviews are an integral part of social media ads. Influenced by the online reviews, target audience has been convinced about the quality of the products. Hence, the advertisers must identify the fake online reviews should be avoided to maintain transparency in providing the information.
- Claims regarding the Country of Origin:In most of the product advertisements, country of origin has been included to create a positive impact on the target audience. According to marketing regulation provided by ACL, if any advertiser has chosen to display the origin country of a product or item, they have to meet legal requisites validating the claim. In case of misconduct, a massive fine will be charged to the advertiser.
In order to identify what will be the consequences of misleading advertisements, a summary of the court case between Singtel Optus Pty Ltd and Australian Competition and Consumer Commission (ACCC) has been presented. In 2012, Federal Court of Australia found that Singtel Optus Pty Ltd was misleading the target customers through their advertisement campaign promoting ‘Think Bigger’ broadband data plan. According to the investigation, it was found that the telecommunication company was misled the consumers by not providing detailed information about the internet broadband plan. In the corrective process, the lead judge of the court case found that the misleading information of the ads created a substantial impact of a large population. Due to the event, the court imposed a penalty of $3,610,000 on Singtel Optus Pty Ltd.
Evidently, misleading or deceptive conduct has become one of the major issues of concern in modern advertisement. The consumer law in Australia has set several sections so that the right of the consumers can be protected. The Section 18 of Australian Consumer Law has provided how to deal with the issue of false or misleading advertisement claims. Hence, the business advertisers should identify the legislation and the guidelines before promoting any advertisements. In some of the advertisements, the advertisers have unintentionally delivered false information that can be costly at the end. Precisely, during advertisement campaigns efficient use of words should be preferred as words can be misleading to the target audience.
In the case of Singtel Optus Pty Ltd versus Australian Competition and Consumer Commission (ACCC), the telecommunication company used the word ‘Unlimited Downloadable Data’ that had become a major setback for the service providers. Mainly, it should be agreed that honest advertisements must be promoted towards the target audience so that any legal loopholes can be avoided during ad campaigns. Conclusively, the advertisement creators must carefully observe the guidelines before promoting an advertisement. Also, a proper disclaimer should be added to the advertisement so that consumers can get the full details about the product or services. Thus, honest advertisement will protect the consumer right as well.
"Advertising And Selling Guide - Misleading Or Deceptive Conduct". Australian Competition And Consumer Commission. Last modified 2017. Accessed September 2017. https://www.accc.gov.au/publications/advertising-selling/advertising-and-selling-guide/avoid-misleading-or-deceptive-claims-or-conduct/misleading-or-deceptive-conduct.
"Australian Contract Law | Julie Clarke". Australiancontractlaw.Com. Last modified 2017. Accessed September 2017. https://www.australiancontractlaw.com/law/formation.html.
"Consumer Rights". Australia.Gov.Au. Last modified 2017. Accessed September 2017. https://www.australia.gov.au/information-and-services/business-and-industry/consumer-rights.
"Legal Obligations Of Marketing". Business.Gov.Au. Last modified 2017. Accessed September 2017. https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/marketing/legal-obligations-of-marketing.
"Marketing Minds". Marketingminds.Com.Au. Last modified 2017. Accessed September 2017. https://www.marketingminds.com.au/regulation.html.
Duxbury, Robert. Contract Law. London: Sweet & Maxwell, 2015.
Evans, Phil. "Spoiled Holidays: Damages For Disappointment Or Distress". The Tourism Industry 6 (2004): 1-7. Accessed September 2017. https://www.austlii.edu.au/au/journals/LegIssBus/2004/3.pdf.
GHSP Inc V AB Electronic Ltd, EWHC 1828 (2010).
Halson, Roger. Contract Law. Harlow: Pearson, 2013.
Hyde V Wrench, Beav 334 (Rolls Court 1840).
Leicester Circuits Ltd V Coates Brothers Plc, EWCA Civ 474 (2002).
Nottage, Luke. "The New Australian Consumer Law: What About Consumer ADR?". QUT Law Review 9, no. 2 (2010).
Paterson, Jeannie. "Introducing The New, National Australian Consumer Law". Alternative Law Journal 36, no. 1 (2011): 50-50.
Taylor, Richard, and Damian Taylor. Contract Law. Oxford: Oxford University Press, 2017.
Vermeesch, R. B, and Kevin E Lindgren. Business Law Of Australia. Australia: LexisNexis Butterworths, 2015.
Weatherall, Kimberlee. "The Consumer As The Empirical Measure Of Trade Mark Law". The Modern Law Review 80, no. 1 (2017): 57-87.