1A legal relation. Application: In the case of

1A

Issue:

The  issues raised in
this question is whether there was a contract formed between Avinash and the
Cafe and whether all elements of the contract were present.

 

Law:

According to the Australian Consumer Law to have a valid
contract between the parties, all four elements should be present in the contract.
Even if a single element is missing the contract is insufficient and cannot be
considered a contract. According to In the case of Avinash vs. Cafe to inspect whether there was a valid
contract between both parties the four elements which are Offer, Acceptance, Consideration
and Intention should be present. According to Causer v Brown 1952 VLR 1 the customer should be well aware of what the Offer
is and how the acceptance is done. According to Thomas v Thomas (1842)2
QB 851 consideration should be present there when making the contract and
according to Carlill v Carbolic Smoke Ball Co 1893 1 QB 256 for
a commercial agreement to be valid both the parties should have an intention of
being in a legal relation.

 

Application:

In the
case of Avinash vs. Cafe it is important to inspect whether all elements of the
contract are present or not. For an Offer to be present there should be a
promise to do something from one party in exchange for something from the other
party. In applying the rule from  Causer
v Brown 1952 VLR 1 there should be a clear indication of what the
offer is and when the acceptance is done. In the case of Avinash Vs Cafe
this is implied to the food offer and the acceptance of the order. When Avinash enters the cafe and sees
the items available for consumption on the self service facility that was the Offer, here when Avinash’s
orders a cappuccino and a Danish pastry by using the self service facility and
waits for acceptance of his chosen items which is waiting for the ticket. An
acceptance to an offer is a definite unqualified assent which complies with the
terms of the offer, also the acceptance should mirror the terms of the offer.
When Avinash chooses the items for consumption it goes straight to the counter
screen where the cafe manager checks and confirms whether this is available or whether
it can be made, after confirming the manager Accepts Avinash’s order, the
moment the manager Accepts the offer Avinash’s gets the printed ticket that is
the Acceptance. Butler Machine Tool v Ex-Cell-O Corporation 1979 1 WLR
401 Court of Appeal is another case of
acceptance where the principle states that both for a  valid contract both parties need to accept the
clauses The
most important element of a contract that should be present is Intention to
create legal relations, applying the rule from the case Carlill v
Carbolic Smoke Ball Co 1893 1 QB 256 to Avinash vs. Cafe. It can be
clearly seen that both the parties had clear intention of creating legal
relations with each other. For Consideration there should be some kind of
exchange of value between the parties, Using the principle from the case Thomas
v Thomas (1842)2 QB 851  here it
is found that Avinash paid money in exchange of the Cappuccino and the Danish
pastry and the cafe accepted the money.

 

Conclusion:

In
conclusion it can be clearly seen that there was a formation of a valid
contract between Avinash and the Cafe and all the four elements were present.

 

1B

 

Issue:

The issue that is to be identified in this question from the
case of Avinash vs. Cafe is whether the cafe is legally entitled to rely on the
clause printed on the back of the ticket to avoid liability in relation to Avinash’s
injury.

 

Rule:

According to the Australian Consumer Law consumers guarantees for contracts which comply
with the definition provided in S3 which states that:

A person is a ‘consumer’ if:

a) The price of goods or services does not exceed $40,000

b) If price exceeds $40,000, the
goods or services are the kind normally
used for

personal, domestic or household
purposes

Following the Australian Food Regulations Act 2003,the Cafe
will have to pay attention towards the standards and the regulations on the use
of implied food claims. The Exclusion clause which is basically a term of a
contract which has the ability to limit or completely exclude the liability of
a breaching party is to be applied with respect to the 2 tests of Unsigned
Documents methods which are 1. the nature of the document test, and
2. the reasonable
notice test The tests are objective and applied sequentially in
the case of Avinash Vs Cafe where the supposedly breaching party is the Cafe. Exclusion clauses may be contained in
contractual documents, printed on tickets, receipts and dockets or on signs.
The distinction is important as the rules differ. According to Causer v Brown
The nature of the
document test involves examining the docket and asking what is its
role in the transaction?  Would a reasonable
person expect it to contain
terms of the contract? According to the rule in Parker v South Eastern Railway The reasonable
notice test is applied if
the court concludes that the document is a contractual document. This test
involves examining whether reasonable steps were taken by the business operator
to bring the clause to the notice and attention of the  customer. In the case of Avinash vs. Cafe it
is important to check Australian Consumer Law S23  Unfair
terms of consumer contracts and small business contracts and Australian
Consumer Law S18  Misleading or deceptive conduct. Also Australian Contract Law Subdivision 4
implies if any obligation comes against the quality of food and services, then
the specific cafe or restaurant will bound to pay the compensation against it.

 

 

 

Application:

In applying Australian Consumer Law S3
in the case of Avinash vs. Cafe it can be observed that as Avinash used his
money to purchase the Cappuccino and Danish Pastry he qualifies to be a consumer.
After Avinash’s tooth was injured by eating the Danish Pastry and he went to
the manager asking for compensation for the dental repair. The manager showed
him the clause Exclusion Clause on the back of the printed ticket which exclude
any liability to the cafe if a consumer is injured by consuming the cafes food.
After applying the 2 tests using the principles from the precedent Causer v Brown
and Parker v South Eastern Railway it can be clearly
seen that the clause was on the back of the ticket which no normal person who
is waiting for food will look at and Avinash has been a frequent customer of
the cafe and no one from the cafe ever informed the “Consumer”
Avinash about any condition or clauses. The evidence against the cafe can be
backed by the Australian Consumer Law S23 
,Australian Consumer Law S18  and Australian Contract Law Subdivision 4

 

 

Conclusion

In conclusion the cafe cannot rely on the ticket to avoid liability
in relation to Avinash injury and will have to pay the compensation to Avinash.

been introduced. In addition to the context, the customer is
unable to demand as a compensation of his treatment

 

 

 

 

 

 

 

 

 

 

2

Introduction 

The Australian Consumer Law (ACL) is found under the
Schedule 2 of the Competition and Consumer Act 2010. It is applicable to the
whole region of Commonwealth of Australia to protect the consumers as well as
the business entities. This specific law has replaced different other laws on
1st January 2011. The ACL has been developed to define the conduct of
organizations, the supply chain of an organization and possible acquisition by
the same. The purpose of this essay is to identify the existence of the express
terms and implied terms in the ACL. Further the essay can help the judiciary to
formulate an effective plan in order to mitigate the loopholes in the
legislation.

Body

Express
terms 

The express term is the terms and
conditions to which both the parties agree at the time of a contract. Further,
an express term can be defined as the exchange of promises to which the two
parties are bound to declare either verbally or in written documents1. This means in an express
contract, all the elements of the agreement must be clear to the related
parties. As per the Australian court, there are different types of express
terms. The Pre-contractual statements, Incorporation of terms by course of
dealing are the major variants in the express terms types. The pre-contractual
statements means when the statement had been signed before the actual agreement
signed. In the later time the predetermined terms and conditions should be
maintained by both the parties. In case of regular dealings, the concerned
parties can insert the express terms during the process. These express terms
are known as the incorporation of terms by course of dealing2.  An express contract includes the buyers and
agency contract, oral contract for paid gardening service, and purchase and
sale contract. In each of these terms both the parties need to aware of the
internal mandatory factors3.

However, in case of implied terms, some of
the special aspects are expected to include in the contractual agreement. These
aspects are derived based on the inherent situation. In contrast to this, the
express terms are to be clearly mentioned in the written document4. This nature of the express
terms makes the same prominent in order to maintain the business’s
transparency. Further, this feature of the conditions has made it mandatory as
both the parties should have the opportunity to go through it. Thus, the
express terms are more viable than the implied terms regarding both the
parties’ perception.

Implied terms

The implied terms are those which a court
can expect to be included in a business contract. Further, an implied contract
is the agreement which needs to be included in a contract depending on the
circumstances. These implied terms are entitled to enable the related parties
to justify or deny a contract in case of a special occurrence. The Consumer Law
is an implied term of the Consumer Act 2010. These terms include the legal
right of the seller and the legal right of the consumer as well. As per the
statement of the Australian Court, the implied terms can be of different types.
The major variants are the terms implied in law and terms implied by custom.
The terms, if automatically implied in a contract, it is known as the terms
implied in law5. In this process, the
applicability of the terms should be properly evaluated. On the other hand, the
implied terms can be customized according to the need. It is known as the terms
implied by customs.  This means the
seller needs to maintain the quality of the goods and the consumer should
cooperate with that person to conduct the business well6.Various
examples for express terms being applied in cases are Hutton v Warren (1836) 1 M
& W 466  ,Hillas & Co Ltd v Arcos
Ltd (1932) 147 LT 503
and Balmain New
Ferry Co v Robertson (1906)
4 CLR 379, cf

However, the express terms need to be
highlighted in the contractual document to which the two relevant parties
should have the opportunity to review. On the contrary to this nature of
express terms, the implied terms are more likely to be hidden condition under
the agreement7.

Consumer Guarantees

Under the section 4 of the Australian Consumer Law, it has been mentioned
that in an organization has not any right to promote any misleading concept
regarding any service or products8. The service providers
should display all the related information according to the product details. It
was an implied term as the conditions are expected to meet under the particular
act. This reason may make the conditions breach due to some industrial
corruption. Further, in section 18 of
the Australian Consumer Law, it is mentioned that an organization cannot
distort key characteristics of the product to manipulate the customer’s
purchasing decisions9. This is clearly stated in
the legislation as an express term. The consumers are protected by these
regulatory guidelines from being misled by the scrupulous advertisements.

Thus, it is clearly evident that the
chances of a breach in case of the express terms are less than that of the
implied terms. The express terms are to be clearly mentioned in a contract to
understand whether the terms are implied or not. This nature of the implied
terms has made it prone to breach by any of the parties.

 

Observation

In the case of Google Inc v. Australian Competition and Consumer Commission
2012, it
has been observed that for some specific companies, Google has misled the
Consumer Law. In this particular case, the advertisers displayed their goods
and services with the help of some sponsored links10. Further, the consumers were
misled by the sponsored links which can be considered as the breach of the
consumer law. The prohibition of this activity is relevant to the section 52 of the Trade and Practice Act
1974 as an implied term. This breach of the implied term has been performed as
the terms do not require to be mentioned clearly11.
This incident has made the author notify the weakness inherent in the implied
terms. In case of breach of the particular act, the accused is liable to be
convicted by the court. The convicted person may be liable to be imprisoned up
to 10 years. In addition to that the accused person is liable to provide a fine
up to 210 Australian Dollar. In case of the corporate bodies, it is set quite
higher to curb the events related to breach of the act.   Thus, the author agrees that the implied
terms are more likely to breach by any of the relevant parties. Hence, the
author also agrees with the explanations provided regarding the implied terms
in this essay earlier.

On the other hand, in case of ACCC v TPG Internet Pty Ltd 2014, it has been observed that the
concerned organization has manipulated the key characteristics of their
products to lure the customers. This event has the potential to breach the
consumers’ fundamental rights also as they are not receiving the authentic information
regarding the products12. This can also hamper the proper competition within
a specified market area. Instead of the fact that the preventive actions
related to this event have been mentioned in express terms in the contractual
agreement, it has been breached. The event of breach of the competition law can
convict a person or an organization for criminal offence. In this case, the
breach may lead to attract fine of 500000 Australian Dollar for an accused
individual. The corporate bodies in this types of events need to provide up to
1000000 Australian dollar13. Thus, from this case, it is evident that the
express terms are not protected against any breach properly. Hence, the author
cannot strongly agree with the idea of the express terms.

Conclusion

The Australian Consumer Law has two types of contractual
agreement based on the nature of the stated or mentioned conditions there.
These types include the express terms and the implied terms. The express terms
are generally thought to be mentioned in the written document clearly whether
the implied terms are hidden in nature. These features are considered to define
the viability of those terms. The express terms are thought to be protected
from any kind of breach as it should be clearly mentioned. On the contrary to
this, the implied terms are considered to be broken due to its hidden nature.

References

Books:

Cabey Kuzma v Better Family Trust/Better Cookies T/A Terry’s
Tortes and Treats 2012 7565 FWA 56

Corones, Stephen G., Sharon A. Christensen, and Nicola
Howell. ‘Submission to Australian
Consumer Law Review Issues Paper.’ (2016).

McKendrick, Ewan, and Qiao Liu, Contract Law: Australian
Edition. (Palgrave Macmillan, 2015)

Stephen G. Competition law in Australia. (Thomson Reuters
Australia, Limited, 2014).

Journals:

Carey, Krumholz,,
Duignan, McConell, Browne, Burns, and Lawrence.,’ Integrating agriculture and
food policy to achieve sustainable peri-urban fruit and vegetable production in
Victoria, Australia’ (2016). 1(3), Journal of Agriculture, Food Systems, and
Community Development,  pp.181-195.

Handford, Elliott, and
Campbell, ‘A review of the global pesticide legislation and the scale of
challenge in reaching the global harmonization of food safety standards ‘(
2015). 11(4). Integrated environmental assessment and
management,  pp.525-536.

Kerber, Wolfgang. ‘Digital markets, data, and privacy:
competition law, consumer law and data protection.’ (2016) 11 Journal of Intellectual Property Law &
Practice 11, 856

Koopman, Christopher, Matthew Mitchell, and Adam Thierer.
The sharing economy and consumer protection regulation: The case for policy
change'(2014) 8 J. Bus. Entrepreneurship
& L 529

Skaik, Coggins. and
Mills, ‘Australian security of payment legislation: impact of inconsistent case
law. In AUBEA 2016: ‘ ( 2016),56(4). January. Proceedings of the 40th Australasian Universities Building Education
Association Annual Conference, pp. 671-681.

 

Website

Australian Consumer Law (2015) Consumerlaw.gov.au
.

NSW Legislation (2015) Legislation.nsw.gov.au
.

 

Legislation

Competition and Consumer Act 2010 (WA) s 4B (Consumer Law)

Trade Practices Act 1974 (WA) s 52 (Consumer Law)

Cases

Butler Machine Tool v
Ex-Cell-O Corporation 1979 1 WLR 401 Court of
Appeal

Google Inc v. Australian Competition and Consumer Commission (2012) S175
ACCC v TPG Internet Pty Ltd (2014)
(CTH) S 18

Harvey v Facey
1893 AC 552 Privy Council

Jones v Padavatton
1969 1 WLR
328

Re McArdle (1951) Ch 669

 

 

1 Stephen G. Corones, Competition law in Australia. (Thomson
Reuters Australia, Limited, 2014)

2
Australian Consumer Law (2015) Consumerlaw.gov.au   http://consumerlaw.gov.au.

3 Stephen Corones, Christensen A. Sharon and Howell Nicola, ‘Submission to Australian Consumer Law Review
Issues Paper.’ (2016).

4 Ewan McKendrick and Liu Qiao, Contract Law: Australian
Edition (Palgrave Macmillan, 2015)

5
Australian Consumer Law (2015) Consumerlaw.gov.au   http://consumerlaw.gov.au.

6 Wolfgang Kerber, ‘Digital markets, data, and privacy:
competition law, consumer law and data protection.’ (2016) 11 Journal of Intellectual Property Law &
Practice 11, 856

7 Christopher Koopman, Mitchell Matthew and Thierer Adam, ‘The
sharing economy and consumer protection regulation: The case for policy
change'(2014) 8 J. Bus. Entrepreneurship
& L 529

8 Trade Practices Act 1974 (WA) s 52 (Consumer Law)

9 Competition and Consumer Act 2010 (WA) s 4B (Consumer Law)

10 Google Inc v. Australian Competition
and Consumer Commission
(2012) S175

11 Trade Practices Act 1974 (WA) s 52 (Consumer Law)

12 ACCC v TPG Internet Pty Ltd (2014) (CTH) S 18

13
Corones, Stephen G., Sharon A. Christensen, and Nicola
Howell. ‘Submission to Australian
Consumer Law Review Issues Paper.’ (2016).