Legal Issues In Business And Commerce Essay.

Case Study 1: Validity of a Pre-nuptial Agreement

1. Tom was a successful businessman in his late 50s who has worked hard all his life to build a well- nown financial planning company with over $50 million dollars’ worth of funds under management. However, Tom was still single as he had no time to form any meaningful relationship due to his extremely long working hours.

Longing for a companion to spend time with, Tom turned to online dating and met Susan, an attractive young model in her mid-20s from Eastern Europe. They quickly fell in love and Tom asked Susan to marry him and promised to bring her to Australia, give her a house to live in, a car to drive and keep her safe.

A week before the wedding as Susan’s family and friends started to arrive in Australia for their grand wedding, Tom asked her to sign an agreement which would leave her with just $100,000 in the event of a divorce, or else he was going to cancel the wedding and send her back overseas. Reluctantly, Susan signed the agreement and a happy wedding was able to go ahead which was enjoyed by everyone who attended.

Unfortunately the relationship between them broke down after five years and Tom refused to give any of his fortune to Susan other than the $100,000 they had agreed.

Advise if the agreement signed by Susan was valid.

2. Steve was in the market for a new car when he came across an advertisement placed on the internet by Jason for the sale of his 2016 two door sports car.

Steve went to see the car in person on three separate occasions, and spent a total of four hours inspecting the car in detail from top to bottom and told Jason that he would have bought the car if only it had a turbo engine, tinted window and leather seats as it was the exact model he had been searching for.

After hearing Steve’s comments, Jason then spent $50,000 installing a turbo engine, tinted window and two new leather seats in his car. However when Jason called Steve two weeks later about what he had done, Steve told him that he was no longer interested in buying the car.

Advise if Steve was legally bound to buy the car from Jason.

3. Carl was a keen weekend fishing man and a novel sushi chef whose best friend Harry loved Japanese cuisine and would often get fresh catches from him.

The two of them went fishing together one weekend when Carl caught a giant fugu fish and made sashimi from it. Despite knowing the fish was poisonous and should only be prepared by a skilled chef (which Carl was not!), Harry nevertheless ate the sashimi straight away because he was extremely hungry.

Unfortunately Harry became sick and spent the next two weeks in the hospital after eating the poisonous fish that was not properly cleaned by Carl.

Advise if Carl was negligent and whether any defence was available to him.

4. Betty was a huge Apple fan so when she learned that the new iPhone 8 was being released in September 2017, she immediately placed an order after seeing on the Apple website that the new phone would come with a high performance, 12 MP camera, 5x digital zoom and optical imaging stabilisation.

Betty was extremely excited the day the new phone was delivered to her. However her excitement quickly turned into disappointment when she realised the camera on her new phone was only capable of 3x digital zoom and the battery would not last for more than three hours.

Advise if Betty has any rights under ACL.

Tom entered into an agreement with his fiancée Susan a week before their wedding according to which in the event of a divorce, Susan would only get $100,000. He said if Susan is not willing to sign this agreement then he will cancel the wedding. Susan, reluctantly agreed. However, after five years into the marriage, they got divorced and she got $100,000 as agreed. Now the issue is to decide if the agreement signed was valid.

As per the Australian Contract Law, an agreement should have the below mentioned necessary elements to be qualified as a valid contract:

• Offer and its acceptance which amount to agreement
• Lawful Object
• Lawful Consideration
• Intention to enter into contract
• Capacity to enter into contract

If even one of the element is absent, then it is not a valid contract.

The first element in building a contract is an offer given by one entity and its acceptance by the other. When an offer is accepted, it becomes an agreement. the given case, Tom offered to marry Susan if she signs a pre-nuptial agreement. Susan accepts Tom’s offer by signing the agreement. The object of the agreement i.e. $100,000 if they divorce is lawful. In return of signing this agreement, Tom promises Susan to marry her, bring her to Australia, and give her a house, car and safety. Hence, there is lawful consideration too. Both the parties mutually signed the agreement and there was no coercion, misrepresentation or fraud. None of the parties was a minor or of unsound mind and nor were they disqualified under any law to enter into a contract.

Conclusion

Given that the agreement between Tom and Susan fulfills all essentials of a valid contract, this contract was enforceable for Susan.

Steve came across an online advertisement by Jason who gave an invitation to offer for sale of his car. Steve visited three times to see the car and inspected it for a total of 4 hours. He then told Jason that he would have purchased the car if it had leather seats, tinted window and turbo engine because he was looking for such a model. On hearing Steve’s comments, Jason invested $50,000 on his car to make it the way Steve wanted it. However, when Jason told Steve about this two weeks later, Steve was no longer interested. The issue is to determine if Steve is legally bound to buy the car or not.

Invitation to offer, is just an invitation for interested parties to submit an offer. While it shows a readiness to deal, it is different from an offer because it lacks an intention to legally bound [Partridge v Crittenden 1968].

In the present case, the advertisement by Jason was just an invitation to treat. It was just the beginning point for negotiation with anyone who read his ad and responded to it. There were no clear words between Steve and Jason which intended to bound and there was no certainty regarding the terms of the advertisement to make it an offer. 

Conclusion

Steve is not legally bound to purchase Steve’s car.

Carl and Harry are best friends. Carl is a keen fishing man and a novel sushi chef. His friend loved Japanese cuisine. One weekend the two of them were fishing together and Carl caught a poisonous fish and made sashimi from it. Even though Harry knew that the fish was poisonous and must be made only by a skilled chef, he ate it and fell sick because Carl had not cleaned it properly. The issue here is whether Carl was negligent and if there is any defense available to him.

Negligence occurs if the following conditions are met:

• A duty of care owed to the plaintiff by the defendant
• A violation of such duty
• There is evidence that the actions of defendant cause plaintiff an injury
• Proximate cause, which implies whether the damage was predictable
• Damages from the conduct

Volenti non-fit injuria – This doctrine states that if a person knowingly places himself/herself in a danger position knowing that harm can occur, they cannot make a claim against the other party.

In the given case, the actions of Carl can be stated as negligent because he owed Harry a duty of care. This is because he was the cook and was making the fish for Harry. Hence, he should have been considerate of Harry’s health. Carl breached this duty by making the poisonous dish without cleaning it properly. The damage from this act was foreseeable because Carl knew the fish was poisonous. His actions resulted in Harry being admitted to the hospital. However, there is defense available to Carl under the doctrine of Volenti non-fit injuria because Harry was well aware of the fact that the fish was poisonous and Carl was not a skilled chef and still he ate it.

Conclusion

While a negligence claim can be made against Carl, he can also defend himself based on the doctrine of Volenti non-fit injuria.

Betty placed an order for iPhone 8 after seeing the specifications on Apple website. However, when the phone came, it did not meet the specifications mentioned on the website. The issue is to identify the rights of Betty under ACL.

The Australian Consumer Law, when a consumer buys a product or service, it comes with automatic guarantee that it will function and perform as per the specifications listed on it. The law also states that if a good or service bought by a person is unable to meet a customer guarantee, then the customer has the right to ask for a refund, repair or replacement under this act.

Since, Betty purchased iPhone 8 considering the product specifications mentioned on the website and on receiving the phone, the actual features did not match the claimed ones, Betty has the right to ask for refund or replacement under ACL.

Conclusion

Hence, Betty can ask Apple to refund or money or replace her phone.

References

Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.

Doepel, Mark, and Steven Canton. "Wei Fan v South Eastern Sydney Local Health District (No 2)." Australian Civel Liability Bulletin 12.9 (2015).

Hogg, Martin A. "Liability for Unknown Risks: A Common Law Perspective." Journal of European Tort Law 7.2 (2016): 113-142.

Hunt, Kate Mathews. "Gaming the system: Fake online reviews v. consumer law." Computer Law & Security Review 31.1 (2015): 3-25.

Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials. Wolters Kluwer Law & Business, 2016.

McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

Wallace, Jessica, Ella Pyman, and Thomas Faunce. "Medical law reporter Australian Competition and Consumer Commission v acn 117 372 915: Should Consumer Law Regulate Doctor-Patient Relations in a Corporatised Health Care System?." (2015): 55-66.