Legal Issues In The Purchase Of A Painting Essay.

Emilia is an avid Art investor who likes hanging beautiful paintings in her house.  As she was reading the local paper, she sees an advertisement for a painting by Popular Artwork Pty Ltd which read as follows:

“Vincent van Gogh – The Red Vineyards near Arles. Original, painted in 1868.  Currently located in Pushkin Museum of Fine Arts, Moscow.  Selling for $20,000. For more information, call 1800ART”

She telephones 1800ART and organises a time to meet with the local sales representative to discuss the painting.  She explains to the local sales representative that she is really keen to purchase the painting. 

She tells the representative the following “I am very eager to purchase a painting from 1868 and one that is currently located in Pushkin Museum of Fine Arts, Moscow”.  Both of these qualities are very important to me, and the reason I am considering purchasing the painting because we need a painting from 1868 in our house and we are looking to showcase more artwork in our house which is currently located in Moscow.”

The local sales representative replies with “Yes, it is an amazing painting from 1868, currently located in Pushkin Museum of Fine Arts in Moscow and Vincent van Gogh’s finest original”.  The local sales representative actually knew that the painting was a 1888 painting and it wasn’t located in Moscow but in New York.

Based on the information provided by the local sales representative Emilia replies that she would like to buy the painting. However, Emilia asks if the sales representative can do a better deal.  The local sales representative tells Emilia that Popular Artwork Pty Ltd will sell her the painting for $15,000 and she has until 10 September at 5:00PM to decide if she wants to purchase the painting.  If she wishes to purchase the painting, she needs to send a letter to the following address with a cheque for $15,000:

Popular Artwork Pty Ltd
348 Drummond Street`
Carlton VIC

Emilia goes to the post office on 10 September and sends the letter and the cheque at 4:59PM. 

The following week Emilia finds out that the painting was not painted in 1868 but in 1888.  Also, that the painting is not located at the Pushkin Museum of Fine Arts in Moscow but actually in the Metropolitan Museum of Art in New York.

1. Is there a contract between Emilia and Popular Artwork Pty Ltd? Refer to relevant case law and principles in answering this question. 

Common Law Rights and Remedies

2. Emilia tells you that had she known that the painting was not painted in 1868 but in 1888 and also that the painting was located at the Pushkin Museum of Fine Arts in Moscow but actually in the Metropolitan Museum of Art in New York she would never have purchased the painting.  What rights does Emilia have under the common law? Refer to applicable case law and principles in answering this question.  What remedies are available to Emilia under the common law?

3. Does Emilia have any rights under the Australian Consumer Law (Competition and Consumer Act 2010) (Cth), Schedule 2?  Discuss any applicable legislative provisions and relevant case law.  What remedies can Emilia obtain under the Australian Consumer Law?  

For making the determination of the fact whether there exists a contract between Emilia and Popular Artwork Pty Ltd, the general principles, and relevant case laws is to be discussed. The term contract refers to that agreement that exists between two or more parties and the same acts as creating an obligation that is enforceable for doing or refrains from doing any particular thing or act. The primary purpose of any contract is to make the establishment of any agreement that has been fixed by the parties to it. There is an express stipulation that any contract is enforceable in any court of law unless there are valid grounds that bars the said enforcement[1].

There are several elements that are involved that makes the determination of the fact of formation of the contract. The first element is offer and acceptance. The element of offer and acceptance stipulates that in the case of the formation of any contract there has to be the mandatory offer by one party to the contract and the acceptance of the same offer by the other party to the contract. The acceptance of any offer has to be communicated in the prominent terms to the person making the offer[2].

The second important element of contract formation is the consideration. The consideration is regarded as the most important element of any contract. No contract has its existence without consideration, except in a few cases. The next important element of a contract is the legal capability of any person to enter into any contract. It states that the during the formation of any contract, any person must have attained the legal age that is universally eighteen years and shall not at the moment of entering into the contractual relationship has been under the effect of alcohol and metal sickness. The other element is that the contract must be legal. It means that the terms of the contract shall not be such that it opposes the public policy of any territory. The last element of any contract is the performance of the contract. Any contract that is entered into for the purpose of the performance of anything that is promised in the contract terms. Any suit of contract arises when there is there is non-performance by either party to any contract[3].

Australian Consumer Law and Remedies

It is established law that for the creation of any contract, the above-stated principles has to be present. Without the said principles, no contract exists. In the case of Payne v Cave in the year of 1789, the defendant has given the highest amount of bid for the goods of the plaintiff in an auction but made the withdrawal of his bid before the fall of the hammer. It was held by the Court that the defendant made the offer of an amount as the bid that is entitled to be withdrawn at any point of time before the knocking of the hammer[4].

In the case of Fisher v Bell in the year of 1960, there has been a display of a flick knife that include a tag of price in the window of a shop. It was rendered as an offense under the Restriction of Offensive Weapons Act of 1959 to make the offer of selling a flick knife. There was the prosecution of the shopkeeper in the Court of Magistrates' but the allegations against the convict was turned down by the justices as they felt that the knife was not offered for sale[5]. 

In the given case there exists a valid contract between Emilia and Popular Artwork Pty Limited. It is because all the elements that are required for the formation as discussed above are present in the dealings between Emilia and representative of Popular Artwork Pty Limited. The offer has been made by Emilia to purchase the painting painted in 1868, and the sales representative accepted the offer as he agreed to the sale. The consideration amount of dollar fifteen thousand was sent to the sales representative by Emilia. Hence, it can be said that there exists a valid contract between the two parties[6].         

In the scenario given, it is evident that the particular painting for which Emilia ordered and paid the amount of consideration was not delivered to her. Emilia ordered for a painting that was painted in 1868, and that was in Pushkin Museum in Moscow. But instead of that, she received a painting that as painted in the year of 1888 and was in the Metropolitan Museum of Arts in New York. While making the dealing with Emilia, it was known to the sales representative that the painting that is going to be delivered on their part was not the exact one that was ordered by Emilia. Hence, the act of knowingly delivering any goods other the goods that were ordered amounts to the offense of fraud on the part of the shopkeeper as emerged in the case of Ormes -v- Beadel (1860) 2 De GF & J 333[7].

There are several rights for Emilia for the non-performance of the contract on the part of the Popular Artwork Pty Limited.  The primary right of Emilia is that she can claim the damages or compensation for the breach of contract by the Popular Artwork Pty Limited. She can also terminate the contract. The appropriate remedy for her shall be that she could make the specific performance of the contract. It means that she could sue the Popular Artwork Pty Limited and ask for the performance of the contract that is delivering the painting that was ordered. This would mean that she would be in a position after the specific performance that no breach was made[8]. 

Under the Consumer Law of Australia, there also exist the rights for Emilia. Emilia can sue the Popular Artwork Pty Limited Company for the violation of the section 18 and 19 of the Consumer Law of Australia. In the section 18 of the Consumer Law of Australia, there has been the fixed stipulation of the fact that no seller of any goods or service can enter into the transaction that is misleading or deceptive. In the section 19 of the Consumer Law of Australia, there has been the stipulation of those facts that are considered as fraudulent or deceptive. Hence, it can be said that there is expressly stated in the Consumer Law that no shopkeeper can indulge in making any fraudulent transaction to mislead any consumer. There can also be no transaction on the part of any shopkeeper or seller, which consist any intention to cause any deception to any consumer[9].

In relation to the given scenario, the case of ACCC v TPG Internet Pty Ltd [2013] HCA 54 can be stated. In this case, there the High Court made the TPG Company to pay a fine of dollar two million for publishing advertisement that included motive of deception. The TPG Company published an advertisement where the amount to be paid by the customers were stipulated in bold fonts as dollar twenty-nine. But there was an additional amount of dollar thirty that has be paid by the consumers. That was written in small and not prominent fonts[10]. 

In the given case, the dealing of the sale representative with Emilia is fraudulent. It is because at the time of making the dealing, it was known by the sales representative that the painting for which the amount paid by Emilia was not the one that was to be delivered by the Popular Artwork Pty Limited.  

Reference List

Callaghan, Sascha, and Christopher J. Ryan. "Rising to the human rights challenge in compulsory treatment–new approaches to mental health law in Australia." Australian and New Zealand Journal of Psychiatry 46.7 (2012): 611-620.

Chen, Vivien, Ian Ramsay, and Michelle Anne Welsh. "Corporate Law Reform in Australia: An Analysis of the Influence of Ownership Structures and Corporate Failure." Australian Business Law Review 44.1 (2016): 18-34.

Corones, Stephen. Sector-specific regimes. Thomson Reuters Lawbook Co, 2014.

Ferraro, Ruth. "Presenting the Graduate Diploma of Applied Tax Law: newly minted from old gold." Taxation in Australia 49.3 (2014): 133.

Field, Rachel, James Duffy, and Colin James, eds. Promoting Law Student and Lawyer Well-Being in Australia and Beyond. Routledge, 2016.

Gray, Anthony. "Development of good faith in Canada, Australia and Great Britain." Canadian Business Law Journal 57.1 (2015): 84-119.

Hanrahan, Pamela F., Ian Ramsay, and Geofrey P. Stapledon. "Commercial applications of company law." COMMERCIAL APPLICATIONS OF COMPANY LAW, CCH Australia Ltd, (2013).

Millbank, Jenni. "Rethinking “commercial” surrogacy in Australia." Journal of bioethical inquiry 12.3 (2015): 477-490.

Orr, Graeme. "Party finance law in Australia: Innovation and enervation."Election Law Journal (2016).

Smith, Nucharee Nuchkoom. "Thai and Australian Foreign Business Law and the Impact of the Thailand Australia FTA." J. Int't Com. L. & Tech. 10 (2015): 22.