Australian Consumer Law - Assignment Example

AUSTRALIAN CONSUMER LAW Name of Student: Course Name and Code: Instructor’s Name: University: Date of Submission: QUESTION 1 The issue raised here is whether the sellers of the furniture, through Mandela, were in breach of the contract of sale entered between myself and them for the sale of the antique furniture. Further, this then turns out on the question of whether or not, if indeed there was a breach, was the breach such as it would entitle me to either damages or being able to completely avoid the contract. I, being the buyer who suffered loss to the furniture he had bought, will be arguing that the contract was laden with fault caused through misrepresentation by Mandela that the furniture was reasonably fit for the purpose he had disclosed. On the other hand, Mandela would be contesting that position by pointing out the warning posted on the wall concerning the fragility of the furniture negatived any possible misrepresentation that may have been constituted by his representation to me. The Australian laws that govern implied guarantees are the Australian Consumer Law (ACL) and also case law such as the judicial decision in Bisset v. Wilkinson.1 The ACL obligates suppliers of goods to ensure their goods are reasonably fit for the purpose for which the consumer made known to the supplier and also that the goods are to be reasonably fit for their disclosed purpose. The exception herein however is that the guarantee fails to hold if it is shown that the consumer did not rely on the representation, or if it is shown that it was unreasonable of the consumer to have relied on the skill or judgment of the supplier.2 The facts of Bisset v. Wilkinson3 had been that the plaintiff buyer bought part of the defendant’s farm which he intended to use for sheep rearing. When the buyer sought the seller’s opinion as to how many sheep the property could take, the seller gave an estimate number of 2000 sheep; a value which however turned out to be an overestimate. On a suit by the buyer over the seller’s estimate, it was held that the seller could not be liable on his statement because it was only one of opinion, rather than fact.4 The application of the law (rule) to the facts of this case, firstly, it is obvious that the furniture was not reasonably fit for the purpose which I had disclosed to Mandela, the seller. However, it was not reasonable that I relied on the statement because the same was largely Mandela’s opinion, not fact. Besides, I had seen the warning concerning the furniture’s fragility; which warning I chose to ignore. Thus, based on the exceptions to the provisions of section 55 of the ACL as well as the judicial position in Bisset v. Wilkinson,5 the sellers of the furniture could not have been guilty of misrepresentation, hence not liable to me. Based on the application of the law on the facts as established above, there was no form of misrepresentation hence no fault in the contract of sale between myself and Mandela. Consequently, I cannot be entitled to any damages (through the recovery of the $500) from the sellers. Besides, I cannot be able to avoid the contract by seeking an entire refund of the purchase price used on the furniture for the already outlined reasons. Question 2 Is Mandela’s statement that ‘It is a solid old thing. I sit on it all the time. You will be able to use it safely for many years’ a breach of s 18 of the ACL (or the equivalent State legislation)? The issue which the above outlined statement by Mandela raises is on commercial statements which border upon misleading or deceptive conduct by the supplier to consumer. Given the nature of the loss that the damage to the furniture caused me, I would likely be fronting the argument that the statements in question by Mandela had the effect of misleading me hence deceiving me to purchase the said furniture. Mandela on the other hand is likely to object to such an argument on the basis that the displayed warning as to the nature of the furniture’s fragility was enough to negative any likely misleading effects of his statements. The law that regulates commercial conduct that is either deceptive or misleading in nature section 18 of the ACL. This prohibition against such conduct is not just to be confined to contractual relations but also extends to consumer contracts as well.6 The law thus covers all statements relating to product claims, those made in the course of sale of a business and to the advice given by a professional person.7 However, the said prohibition does not extend to statements of a personal nature such as political speeches as well as statements by a real property owner during the sale of such property.8 Besides the foregoing, the law on misleading conduct arising out of opinions has been judicially established in RAIA Insurance Brokers v FAI9 that, as a general rule, opinions do not constitute misleading conduct. However, there are exceptional circumstances when opinions would constitute misleading conduct. The court has set out such circumstances as when a person expresses an opinion he does not genuinely hold to be true, if the opinion in question was offered by an expert or when the opinion was offered without being supported by any facts. Further, Mandela’s statement was laden with a promise to me to the effect that the furniture would have served me for many more years to come. As a general rule laid down by Australian case of Wheeler Grace & Pierucci v Wright,10 promises and predictions do not constitute misleading conduct unless it may be shown that there were no reasonable grounds for the prediction. Further, case law has vindicated statements which are intended as mere commercial puffs precluding them from constituting any misleading conduct. Besides, statements which would otherwise be misleading have been held in Bateman v Slayter11 as not to being misleading where there are disclaimers and exclusion clauses. On the application of these rules upon the facts the question to be asked is whether the sellers, through Mandela’s representations to me, which amounted to promises be held to have been in breach of section 18 of the ACL? Granted, there was no reasonable basis upon which Mandela made the promises, and besides, Mandela did not himself most likely believe the statements in question had any truths in them; which position should make the sellers liable. However, the warning posted by the sellers giving a warning as to the fragility of the furniture in question as founded upon the holding of Bateman v Slayter, negatives such a potential liability since the same had the effect of a disclaimer or an exclusion clause. Suffice it to say in conclusion that the statements in question by Mandela, while being within the purview of the conduct intended to be curtailed by the operation of section 18 ACL, the same were however not in breach of the law. This is because of the operation of the exclusions through the judicial interpretations in the cases already outlined hereinbefore. QUESTION 3 Assume that upon discovering that Mandela had disobeyed his instructions and sold the armchair to you for only $1,500, Tyson had immediately insisted that you return the armchair. In what circumstances would he be legally entitled to do so? This question raises the issue of an unconscionable bargain. An unconscionable act is one that is devoid of conscience and makes an affront to any sense of justice, reasonableness and decency.12 Conversely an unconscionable bargain is the type in which no sensible promisor, not suffering from under any incapacity brought about by some delusion, may be expected to make, and that no promisee having a reasonable integrity may accept.13 The Australian law which governs unconscionable bargains is the Trade Practices Act of 1974.14 Although the unconscionable nature of the bargain in this respect is intended for the protection of the consumer against the possible exploitation by the supplier, Tyson may argue his case based on the provisions of section 51AC(3)(j) and (k) which provide that the court, while determining the existence or otherwise of such bargains, may have regard for the extent to which the supplier was willing to negotiate the terms and conditions of the contract involving the supply of goods as well as services with the consumer15 and also the extent to which the supplier (seller) and the consumer (buyer) acted bona fide.16 On application of the law as laid down by the operation of the aforementioned section, while there may be had a contestation especially with regard to who between the supplier and the consumer the law intended to protect, based on the non justiciable nature of this contract, the court may be willing to make an exception to the general rule and accord the supplier protection so as to enable Tyson to reclaim the armchair from my ownership. In conclusion therefore, Tyson may use the provisions of section 51AC (3) (j) and (k) to show his entitlement to the armchair hence make me be legally obligated to give up my claims to the furniture. QUESTION 4 Assume that when you sat on the chair in Tyson’s store before deciding to purchase it, the chair had collapsed under your weight, and you had been injured when you fell to the floor. Could you have sued Tyson in tort of negligence and claim compensation? Would Tyson have any defence available? The rule on the tort of negligence is called into question only when a person (defendant) who has a legal duty of care to protect the plaintiff, fails to exercise the said duty of care and out of that abdication, the plaintiff suffers an injury.17 This was the judicial position in the Common Law landmark case of Donoghue v. Stevenson18 where the defendant was held liable for product liability when the plaintiff suffered injury by consuming beer which contained parts of a decomposed snail. The question that one is wont to ask is whether Tyson owed me, the buyer, a legal duty of care. The answer to this is in the affirmative because as the occupiers of the premises in question, they owed people who entered the said premises to conduct business with them a duty of care. Did Tyson stand in breach of the duty of care they owed to me? The answer to this question is in the negative. This is because despite the fragility of the seat, the said fact had been brought to my attention in advance through the warning; which fact I blatantly chose to ignore. Had they not brought the warning to my attention, then they would have been in breach of the said duty. However, I would still have suffered an injury. Applying the rules of the tort of negligence to the facts of the case, could Tyson be liable for the injury I would have suffered at his shop premises? Of the three ingredients that constitute the tort of negligence, only the first one would be attributable to Tyson. Although the third one, injury by plaintiff is in place, it fails because its causation is not out of the defendant’s breach of his duty owed to me. Thus, the injury I would suffer would have no nexus with the defendant’s breach of duty as was established in Donoghue v. Stevenson.19 Based on this position, the conclusion as to Tyson’s liability or otherwise, he is not liable under the tort of negligence because not all the ingredients of the tort would have been in place. However, taking the other route to assume that Tyson were to be liable to me for the tort of negligence, then he may raise the defence of contributory negligence. This is out of the fact that my choosing to ignore the warning announcing the fragility of the armchair would have contributed to my injury under the circumstances. BIBLIOGRAPHY Arbetman, Lee P., McMahon, Edward T., & O’Brien, Edward L., Street Law- A Course in Practical Law, (1994). Australian Campus Network, Oxford Brookes University and La Trobe University, Law of Commercial Contract, (n. d) http://www.harley.net.au/contract/Week_9_Slides.ppt at 18 April 2011 Australian Government: The Treasury, The Australian Consumer Law-A Guide to Provisions, (2010) Australian Trade Practices Act of 1974, Act No. 51 of 1974 Bryan A. Garner, (editor), Black’s Law Dictionary, (2004) Hodgin, R. W., Law of Contract in East Africa, (2001). Ogolla John Joseph, Business Law, (2005) Rodgers, W. V. H., Winfield & Jolowicz on Tort, (2002). Stephen Bullon (ed.), Longman Dictionary of Contemporary English, (2003). Thomson Legal & Regulatory Australia, Consumer Protection and Product Liability: Commentary and Materials, (2009) Tudor Jackson, The Law of Kenya, 4th ed. (2005). Read More