Advantages of Australian Business Law - Essay Example

? AUSTRALIAN BUSINESS LAW (Insert Here) here) here) (Month, Day Year) PART A: CASE STUDY Peter has just completed his high school final year and did very well in University entrance examination. He has been offered a place in Bachelor of commerce degree. He needs to find a part time job that will assist him to pay for his education and secures a job as a courier in the city. Peter requires a bicycle for his new job. Owning a bicycle would mean that he has transportation to school when his lessons at the university begin. Peter has $5,000 in his savings and intends to use this to purchase a state of the art bicycle and textbooks. Peter searches the internet for online bicycle stores as he had heard that you can have a good deal of second hand bicycles online. Peter finds a good selection on tourbikes.com.au (Tour bikes). The bicycle he finds is described as follows. “This is one of the most sought after bicycles we currently have in stock. It is the same model that was used by Cadel Evans when he won tour de france, a cadel evans “GF”. This model is in short supply in the second hand market and presents a rare opportunity for purchasers. This bicycle has been completely restored and refurbished. There are new tyres and new chain. The seat is extremely comfortable and comes in a dashing green colour. This bike is joy to ride. $6,000. Payment is due upon delivery” Peter really wants to purchase this bicycle but doesn’t have sufficient amount of money for the same and his textbooks. Peter wants to know a little more about the bicycle, so he telephones the owner and sole proprietor of tourbikes, sally. Peter asks what it means in the advert that it has been “restored and refurbished”. Sally responds that: “That means that we have ensured that the frame of the bicycle is sound and has been repainted. It also includes replacement of gears and replacement of any damaged spokes.” Peter thanks sally and immediately email tour bikes the following information. “I would like to purchase the Cadell Evans GF that is advertised for sale on your website. I believe that a second hand is only worth $4,000 at best. Please advice if you are willing to sell to me the bicycle for this amount via email by close of business tomorrow. I would also like you to arrange for immediate delivery.” Immediately, Burt a middle aged cycling enthusiast has also seen the bike advertised for sale at tour bikes website. He is a Cadell Evans fan and also emails tour bikes at the same time that Peter does. “ I want to buy the Cadell Evans GF that has been listed. I will pay you $5,000” Sally reads the emails as soon as they enter the inbox and replies to Burt’s only. “Thank you for your interest in our product, the Cadell Evans restored bicycle. I cannot sell that amazing bicycle for that little. However, I will accept $5,500” Burt does not respond until 4pm the following day “Thank you for your response but I don’t think the bike is worth that much. I am no longer interested.” Sally really needs to sell the bike. She has an outstanding account with her creditors and needs to make a payment of $4,000 within the next few days otherwise she runs the risk of the bank foreclosing on her mortgage. Sally checks the time and it is 4:30pm and notes that she still has 30mins before close of business. She emails peter. “Thank you for your interest in our product. The Cadell Evans restored bicycle. I will sell the bike to you at $4,000. I have organized immediate delivery. Payment of $4,000 is due upon delivery as specified.” The email enters Peter’s inbox at 4:45pm, (15 minutes to Closure of Business). Meanwhile, Peter is on orientation camp at the University and does not have access to his email for a period of three days. When peter returns home and checks his email, he sees an email from Sally. Peter emails Sally saying that he is sorry and he is no longer interested in buying the bicycle. He no longer wants to buy such a good bicycle for his courier job as he has just heard from friends that it will get wrecked. Just after he sends the email to Sally, there is a knock on his door. It is the Cadell Evans GF bicycle being delivered. The tourbike employee is demanding $4,000. He tells the tourbike employee that he wont be accepting the bicycle and that he should take it back to Sally. Sally is furious that these customers keep on changing their mind. Sally really needs to sell the bike and asks for advice. Question 1 Assume that the elements of intention and Consideration required for the formation of a contract exist. Using the four step process, discuss whether the elements of agreement required for the formation of a contract can be established. Can sally claim that he has an enforceable contract between him and either Burt or Peter? Answer Legal Issue The legal issue here is as to whether the two customers have breached a contract and whether Sally who is furious can claim an enforceable contract between him and the either or all of the two clients. Rules of Law The context above can be properly dealt with in the context of Australian contract law. The law states that a contract is an agreement that has been entered by two or more parties with the intention being to create an obligation that is legal. The law also adds that a contract can either be written or be in an oral format. The results of breaching a contract be either damages or paying money to the party that has been affected by the breach. The elements of a contract are offer, acceptance, intention and consideration Through offer and acceptance, mutual agreement is reached between the person offering and the one who is accepting the offer. The underlying assumption in this element is that the two minds have been able to reach a consensus over what is being agreed upon. The two parties therefore display the intention of entering into a legally binding obligation. On the part of considerations for the agreement, it something of value that is given to whoever is making the promise to whoever is being promised in exchange of something that whoever was promised gives to whoever made the promise. The main purpose of this element is to ensure that the promises are reciprocally induced. Application to the case study The main legal issue in this case study is among Sally the proprietor of tourbikes, Peter and Burt who are the customers to the said entity. The main point of interest here is whether a contract that has been entered into by two or more parties has been breached or not. Peter who is a client to the company went through its website and identified the bicycle that he wanted to purchase although was dissatisfied with the prize that had been indicated. He therefore resorted to write to the company through its proprietor requesting that he be allowed to buy the bicycle at a fee that is lower than the marked prize by $2000. In addition to that, he also indicated that he like to be notified of the decision of the company the next day before closure of business which the company did not honour. He later decides to sell the bicycle to Peter who has already made up his mind that he is not going to buy the bicycle for his job. On the other hand, Burt who is also interested in buying the same bicycle also writes to the company indicating his intentions to do so. However, he is also not able to raise money that is equivalent to the marked prize although the proprietor is willing to sell him the bicycle at a fee that is $500 less than the marked prize. Burt turns down the offer on the ground that the bicycle is not worth that amount of money. In the case study above, the two parties entered into a legally binding agreement because of various reasons. The proprietor who Sally in this case was willing to sell his refurbished bicycle and therefore decided that he advertises it. Peter who is also a willing buyer decided to go through the company website and then send an email to the company. However, there are two issues that need to be looked at keenly here. The seller wanted to sell the bicycle at a price of $6,000 while the email send to him from Peter required the bicycle to be sold to him at $4,000 and if at all the email was replied to before the closure of business the following day. However, this did not happen and therefore means that accepting terms later on would have led to a breach of contract. Peter and Sally did not reach any agreement because what the offerer and the offeree had in mind did not converge to one common goal. The amount offered by the seller was not accepted by the buyer at the appropriate time and the terms spelt out by the buyer to the seller were not honored at the appropriate time and therefore the contract did not materialize. Burt on the other hand was interested in the product of the Promissor but the amount at which he was selling it was high to the customer. He offers to reduce it but not to the level at which the promissee wants it and are therefore not able to agree. On the other hand, he writes an email to Peter accepting the amount that he had offered but the information gets to Peter when he has already changed his mind that he won’t be buying the bicycle. Conclusion Sally gave an offer that can lead to a legal binding by wanting to sell the bicycle that is limited in his store. Peter wanted to receive the offer from Sally but thought that the prize that the bicycle had been labeled and asked the Offerer to reduce it. Burt who was also interested in the offer wrote to the offerer asking him to reduce the amount labeled to the product. The Offerer did but not to the amount that Burt wanted and therefore declined from entering into the deal with him. Out of desperation, the offerer wrote to Peter now accepting to the terms and conditions that he had spelt out. At this time, time had run out and Peter had changed his mind. Sally has no any enforceable contract in this case because he didn’t any into any legally binding agreement with either of the two. CASE 2: Peter has another change of heart and decides that he does want to purchase the bicycle. He signs the purchase agreement and pays $4,000 for the bicycle The document states that the bicycle is a Cadel Evans GF model restored and refurbished with new tyres and a new chain. At the bottom of the document but before the signing clause, there is the following additional clause: The seller is not liable for any defect, malfunction or default in the bicycle and the buyer accepts all responsibility. Any guarantee that is given in relation to goods is limited only to the first thirty days after purchase. Peter is proud of his new bicycle but it doesn’t work out well as he had expected. Once he took the bicycle out of its wrapping, it was clear that it was not a dashing green colour but more of a murky greenish brown. The delivered Bicycle was of Cadell Evans GF model but while its frames and spokes had been replaced, its gears had not replaced. After a period of six weeks, the bike had become unusable because its gears could no longer function. The seat was tremendously uncomfortable and the tires were in fact retreads although its chain was new. The bike was not a joy to ride. This was disastrous to Peter not only because he could get home late from his classes but also because he cant perform his job as a courier. He finds out from his friend at the University that there are a lot of second hand bicycles of this model on the market. Peter has used his savings for the first semester to purchase a bicycle and textbooks and he has no option but to buy another bicycle. Peter calls Sally at Tourbikes. She says that since 30 days have passed since the purchase of the bicycle, they are unable to help him. Peter is very much upset and wants to know what are the terms of a contract because he wants to sue the seller for breach of the contract although not sure whether this is possible because of the straight terms in the contract that are disclaiming the liability of the defect. Question 2 Using the four steps process, discuss what terms are expressly agreed in the sale of the bicycle. In your answer, be sure to discuss whether this includes the clause at the bottom of the document. You will also need to determine the status of any relevant terms including whether they are a warranty or condition set out. Legal Issue . The legal question here is as to whether Peter can sue Sally for breach of contract bearing in mind terms and conditions that have been stated out. The contradiction is as to whether terms spelt out are conditions or warranty. Rule of Law It is important to note that a contract can only come to existence if at all the three basic elements are present. They include the intention to be legally bound, the agreement and a formal execution in a deed or consideration. The parties must initially have had the intention to be legally bound by the contract which means that they were of sound mind. As stated earlier, an agreement means that the two minds have met and have been fused into one line of thinking. There are various ways through which an agreement can be reached and as long as the two parties agree, the agreement is then recognized. When one party is accepting, it must ensure that it is in line with what other party has offered to give through reading and understanding. Application to the Case The main area of concern in the case above is that Peter has already bought a bicycle and has signed an agreement with Tourbikes stating that he accepts the bicycle the way it is and pays the sum of money that has been agreed by the seller. The contract however states that the seller is not liable for any malfunction that may result and the buyer takes full responsibility. In addition to that, the guarantee that is given to goods is only liable to a period of thirty days The case study involving Peter and Sally can be looked in terms of contract’s conditions and warranties. First of all, the advertisement that was posted by the company concerning the bicycle had a lot of puffs that were meant to attract Peter or any other consumer into the contract. On the other hand, Peter did not keenly look at what he is being offered but readily signed the contract as it was began using the item. The case therefore involves terms that have been spelt out in the contract. The law states that terms can become part of contract either through agreement between the parties or because they have been put into the contract by operation law. Peter can sue Sally because conditions that were spelt out in the contract concerning the status of the bicycle such as its colour and refurbishment status were not fulfilled as agreed. On the other hand, the statement added concerning the period of time that damages are supposed to be claimed is a warranty which in the case above has expired because of the period of time that Peter has been using the bicycle. Conclusion Peter can be able to sue Sally on the grounds that she never satisfied the conditions set out in the contract concerning the nature and state of the bicycle that she was selling to him. However, the other clause is a warranty that cannot be affected because Peter has been using the bicycle for a period of more than thirty days. PART B: SHORT ANSWER QUESTION Can Judges look outside an act of parliament for assistance in interpreting legislation? If so in what circumstances? What specific materials can they refer to? Explain It is true that Judges can be able to look beyond an act of parliament for assistance when it comes to interpreting legislations. Circumstances that can lead to application of outside sources of interpretation of legislation include where the parties involved in the contract had their own negotiations and the terms spelt out cannot be inferred to the act of parliament. Sources that can be used to refer to this include extrinsic sources of evidence, previous Court cases and other contractual processes of the same kind. References Pendleton Vickery, Australian Business law. Edmonton. Vintage, 2009. Roger Wayne, Australian Business law: Compliance and Practice. London. OUP, 2008. Paul Latimer, Australian Business Law: Work book. New Found Land. McGrawHill, 2010. Max Young, Contract Law: The Basics. New York. New York Publishers, 2011. Phyllis Hurley, The Essentials of a contract. Mumbai. City Guild, 2001. Frances Quinn, Contract Law: UK Edition. London. Times Publishers, 2011. Ingram Jefferson, Criminal evidence. Oakland, Oat Publishers, 2001. Peter Murphy, Murphy on evidence. Rome, Sunset, 2007. Read More