Hamid is a refugee from Afghanistan who was recently released from the detention centre in PNG and is currently living in Adelaide. While walking in Rundle Mall one day he was approached by Kathy who was selling internet access contracts for a newly formed internet company Speed Connect Pty Ltd. Hamid speaks very little English and Kathy is aware of this. Kathy explains the terms of the contract which is essentially that Hamid would be bound to a 2 year contract and if he breaks the contract anytime before the 2 years he will incur a $1,200 penalty. The contract comes with a free Samsung tablet. Kathy uses some technical language to explain the terms to Hamid, aware that he doesn’t understand the full extend of the contract terms.There is a telephone translation service available but Kathy chooses not to use this as this translation service usually takes twice as long. Kathy works on a commission basis. The more contracts she sells the more she earns. She wants to sign up this contract quickly as she is keen to sign up three more contracts before close of business.
Hamid has been thinking of getting internet connection as he wishes to Skype his family back home in Afghanistan and also to do a free on-line English course. He is under the impression that he can terminate this contract anytime he wants without any penalty and all he has to do is give Speed Connect one month’s notice and return the tablet.
Three months into the contract Hamid finds that he is unable to cope with the financial demands of this contract as there are many hidden costs which he was unaware. When he contacted Speed Connect to give his termination notice he was shocked to learn that there is a $1500 penalty.
Advise Hamid if this contract with Speed Connect is valid? Can he get out of this contract?
The Australian Contract Act.
In the given case law Mr. Hamid is from the country Afghantistan who had been detained but now released from PNG and is residing in Australia in the city of Adelaide. He was being approached by Mrs. Kathy for a new internet connection while he was out for the tour at the mall. These contracts were on behalf of the new internet company named as Speed Connect Pty Ltd. The terms of the contract was being demonstrated to humid in English which was a lest known language to him and this was in the knowledge of Kathy and she also added the 2 year block period and the penalty clause in the discussion of offering the internet connection. There was also the use of some of the technical language which was not suited to the Hamid as he was not aware of these terms as well. The process also included the rejection of the professional services when the There is a telephone translation service available but Kathy chooses not to use this service because of its time consuming nature and not necessary nature as told Kathy to Mr. Hand.
1. Need Of Hamid In the Issue
The issue is that whether Mr. Hamid is justified in cancelling the contract before the expiry of 2 years of contract without any levy of penalty clause.
Hamid as the breach egad done on no misreprenatation is being saved and the whole house to be vest as the complete disclosure of hidden costs were not made known to him.
The issue pertaining in this regards is that whether Mr. Hamid can get out of the contract without any penal provision.
The main issue that can be discussed is the condition of the breach of contract and thus would help in the understanding of the issues which lead to the breach of contract for a company.
There are two types of breach namely the actual breach and the anticipatory breach and thus it would help in the decision of understanding the conditions leading to the breach of contract by the parties.
(A) RULES& APPLICATION:
- If Mr. Hamid wants to be justified in rescinding the contract there must me failure of the contract. It can be said that there It may be argued that prima facie there was a repudiation of the contract as Mr. Hamid was acting honestly and did not intend to repudiate his obligations if the seller Ms.Kattyhad applied a correct procedure of applying the “telephone translation method”.
- Katy was aware of the fact that Mr. Hamid was not good at English enough to understand the technical terms of the contract. Makati could have followed the afore mentioned method to make Mr. Hamid clear about the terms of the contract but it would have taken twice the time to make him understand. It would be pertinent to note that Makati is a commission based seller which earns on the basis of quantum of selling internet access contracts.
- This is the case of Miss-representation under the instant circumstances. So we can prove it under the law as under:
the statement shout should be a demonstrator of back and profiler attitude.
The test to determine whether the statement is of fact is objective. The context in which the representation was made suggests that it is factual. Certainly the relative expertise and differential knowledge of Mr. Hamid is relevant.
- Misrepresentation does not actually is linked to the fact that someone persuaded a person but it is that the contract was entered because of the persuasion and then only the former person is guilty. Infect in the instant case also Ms. Katty was aware that Mr. Hamid had a very little knowledge of technical terms used by her in explaining the terms of the contract. She had an alternative to this that she should have opted telephone translation method to make him understand the relevant terms of the contract. The test lies in the fact that whether the representation was done on the ordinary course of contract and the terms of breach. Nicolas v Thompson
- Contract voidable
The laws applicable would bring good conclusion for the case and will make the contract voidable from the conduct of one of the parties. The contract however cannot be rescinded as there is no base for the same to be rescinded of the contract in any given case.
Accordingly, it can be inferred that Ms. Katty was misrepresented& violated the normal provisions of the contract clauses.
- Ms. Kathy has misrepresented the facts to Mr. Hamid as she could have opted the method of telephone translation to explain the terms more clearly to him but as this method takes twice the normal time, she did not opted that method as she had the primary objective of making consideration out of commission by selling more internet access contracts.
- Besides being aware of the fact that Mr. Hamid do not understand the technical terms, she still used such terms to sell the contract which made Mr. Hamid understand that he could get out of the contract even before 2 years without any penal provision of $1200. But after the expiry of 3 months from the date of entering into the contract, Mr. Hamid realizes that there were certain hidden costs & a penalty of $1500 on getting out of the contract.
- Accordingly, it can be inferred that Ms Kathy was wrong in not opting the telephone translation method for selling the internet access contract. Hence, due to the misrepresentation the contract becomes voidable.
The areas that need to be covered by the case law that all is moving right but where is the issue that resulted in the downfall of the company providing internet connection to the people the sale tagline is incorrect. Mr hamid should be told about the product when Miss Kathy approach she k
know the angry age issue so she should I have complained
The main fact to understand over here is the contractual obligations that would arise as a result of the breach of the contract over the time. The fact of the contract is that Mr Hamid is not thinking of taking steps over the issue such that positive results could be achieved by the parties to the contract.
The results of the breach are generally that they is chances to cancel the contract, or compensate the other parties for the losses caused to him.
So this is the conclusion for the case in detail.