Contract Law: John vs Vanessa and Li Wu Case Study
Contract Law: John vs Vanessa and Li Wu
Instructions;-
Question 1: Contract Formation (4 points)
Is there a contract between
• Li Wu and John; and
• Vanessa and John?
When was this contract made?
Question 2: Terms and Remedies for Contract Law under Common Law (8 points) Do you think that John is liable for damages for breach of any contractual terms? Please consider both express and implied terms of the contract.
Vanessa and Li Wu would like a refund of the price of the gorge scrambling adventure, they are seeking any damages to which they may be entitled to and want to know whether they are entitled to bathers and bottles of sunshine. John believes he is well covered against any claims because of the signed Certificate of Adrenaline Junkie.
Question 3: Statutory Guarantees (8 points)
Do you think that John is liable for damages for breach of any statutory guarantees under Part 3-2-1 of the Australian Consumer Law?
The remedies Vanessa and Li Wu seek are the same as in question 2 and John believes he is well covered against any claims because of the signed Certificate of Adrenaline Junkie.
Solution
Contract Law: John vs Vanessa and Li Wu.
Question 1: Contract formation
A contract is a legal and binding agreement that governs an existing relationship between multiple parties setting out the criteria of what should be done and what should not be done[1]. For the case of John vs Vanesa, there was a contract. Similarly, for the case of John vs Li Wu, there was a contract. This is because for a contract to exist legally, six elements must be fulfilled. The first element that was present in the contract was an offer made by John. According to the contracts Act, 1950, it is fundamental that one party comes up with an offer and serves the second party[2]. If the offer is inform of an advertisement, the interested party should reply showing interest and the contractor replies by issuing out a form to be filled by the interested party. John presented both Vanesa and Li Wu a form to fill their details.
There should be an acceptance after an offer has been presented which seizes to occur only when the two parties are still negotiating on the terms[3]. John clearly stated the rules and regulations to be observed in the contract but Li Wu and Vanessa failed to pay keen attention to the rules. By signing the binding form, John had played the roles required by the law. By accepting to pay the required consideration of $ 80.00, the third element of a valid contract was being fulfilled. The legal relations were not stated in the agreement between John and Li Wu as well as between John and Vanesa. The contracts Act of 1950 is silent on the intention to create any legal relations in binding contract. The availability of certainty as presented through the terms and regulation by John created a legal relation for the contract[4]. Finally, the contract was fulfilled by parties with capacity to enter into a contract. Although not clearly stated, the Australian education system is designed in a way that a student at college should have attained the age of 18 years. Fulfilling all the six conditions means that a contract was in existence.
Question 2: Terms and Remedies for Contract Law under Common Law
There are several considerations to be made when terminating a contract under common law. Most significant is whether the party feels the breach was material but also when there exists some termination requirements or provisions in the contract itself[5]. A more cautious approach for the terminating party would involve complying with the contract procedures whilst terminating the contract and specifying it is on the grounds of common law[6]. As exemplified in the case of Parker vs South Eastern Railway Company,[7] where Mr. Parker while in the cloak room of the railway company deposited a bag and paid $2 which was receipted. The receipt had on one of its sides a date and the receipt number while the other, a set of clauses. One of the clauses limited the company to a liability not more than $10 for lost packages under transit. At point of collection, Mr. Parkers bag was not found and was forced to make a claim. In the claim, Mr. parker valued the bag at $24. The judge sort to understand whether the plaintiff customer did understand the conditions on the ticket and was bound with the similar conditions. The Judge, Mellish LJ did dwell on three issues during judgement;
- Was the customer aware of the writings on the ticket?
- If yes, did the customer believe they were conditions binding the contract?
- Was the customer given ample time to interpret the conditions?
It was noted by the court that the plaintiff was given ample time to read and understand the conditions but failed to observe the conditions on the ticket. The plaintiff was entitled by the court to a claim worth $10 as opposed to the claim of $24. For the case of John vs Vanessa and Li Wu, John is not liable for the damages caused because the receipt stated the binding contract terms. Both Li Wu and Vanessa were given enough time to read and understand the conditions by John. Failure to be observant is not John’s responsibility. Vanessa and Li Wu are not entitled to any refund.
Question three: Statutory Guarantees
Under the statutory guarantees Part 3-2-1 of the Australian Consumer Law, the contracting party must, unless an exception is made guarantee the consumer due care and skill for the services offered besides providing fitness for the purpose of the desired results[8]. All the conditions must be provided within reasonable time before the contract is made or when there is no agreed date. The consumer under this part is guaranteed of any repairs and provision of spare parts that correspond to the original description of the damaged goods[9]. John failed to inform the clients in advance that the said bathers and bottles of sunshine did not exist. Additionally, john failed to indicate that the tool used were of poor quality. Since the statutory guarantees protects the consumers and provides for the provision of fit services to obtain the desired results, Li Wu and Vanessa are entitled to the sought remedies while John is liable for the damages caused[10].
References
Australian Government (2013). The Australian consumer law a framework overview. Retrieved
from http://consumerlaw.gov.au/files/2015/06/ACL_framework_overview.pdf
Clark, E., Griggs, L., Cho, G., Hoyle, A. & McLaren, J. (2012). Australia – Commercial and Economic Law – Suppl. 45. Alphen Aan Den Rijn: Wolters Kluwer Law & Business International BV.
Commonwealth of Australia (2016). Consumer guarantees: A guide for businesses and legal practitioners. Retrieved from http://consumerlaw.gov.au/files/2015/09/consumer_guarantees_guide.pdf
Freilich, A. & Webb, E. (2009). The incorporation of contractual terms in unsigned documents –is it time for a realistic, Consumer-Friendly Approach? UWA Law Review 34, 261-273. Print.
Gray, A. (2009). Unfair contracts and the consumer law bill. QUTLJJ, 9(2), 155-175. Print.
Hong, C. & Brisbane, P. (2015). What are the elements of a contract? Retrieved from http://www.hillhouse.com.au/legal-question/what-are-the-elements-of-a-contract/
Spagnolo, L. (2013). law wars: Australian contract law reform vs. Cisg vs. Cesl. Retrieved from https://www.cisg.law.pace.edu/cisg/biblio/spagnolo2.pdf
Swain, W. (2014). Contract Codification in Australia: Is It Necessary, Desirable and Possible?
Sydney Law Review, 36(131), 131-150. Print.
Trade Practices Amendment (Australian Consumer Law) Act (No. 2) (2010). Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwipzejDsqbTAhVKD8AKHcJ7C2IQFggvMAI&url=https%3A%2F%2Fwww.legislation.gov.au%2FComLaw%2FLegislation%2FAct1.nsf%2F0%2F4E8004BC23ACDEBBCA2577620009E209%2F%24file%2F1032010.pdf&usg=AFQjCNGZ7u_i0NxVbdT8rKLAhdynM2lnKw&sig2=fasraqq2X8YIUKrvVpEa8g&bvm=bv.152479541,d.ZGg.
Wiley Higher Education (n.d.). Parker v South Eastern Railway Company; Gabell v South Eastern
Railway Company (1877) 2 CPD 416. Retrieved from http://www.johnwiley.com.au/highered/blaw/content110/case_summaries/parker_gabell_vs_south_eastern.pdf