Legal Advice to Julian and Anna - Case Study Example

Case study Name Institution Date Introduction In Australia, businesses are supposed to conduct their activities in accordance with the law. The brochures for Bliss Island indicated that the facilities that were being provided were of high quality. It indicated that it offers the best reef diving than any where in the world. It also highlighted that the finest food is offered. This was further reinforced by the pictures of the food and delicious looking cake, confirmed by Sandra who runs the resort. However, it ended up with a bad experience for Julian and Anna who visited the resort after reading the brochure. The diving reef was not good and the cakes that had been advertised were not available. Julian and Sandra ended up loosing their belonging to theft after a careless mistake by the housemaid. Schedule 2 of the Competition and Consumer Act 2010 (Cth) requires that the business should be conducted without any deceptions or misleading conduct1. The paper is a discussion intended to provide legal advice to Julian and Anna. Analysis Julian and Anna were attracted to Bliss Island by the brochure which indicated the services that are being offered. It met the needs of both Julian and Anna for their 20th Wedding Anniversary. Julian and Anna both enjoyed reef diving with Julian also enjoying cake eating. All theses services had been indicated on the brochure. This is an indication that the decision to visit Bliss Island brochure influenced their decision. The owner of the resort confirmed this with the full knowledge that the resort can no longer provide the services that had been indicated by the brochure. This indicates that the resort was willingly providing false information to the members of the public and it was likely to mislead the customers. According to section 18 of Schedule 2 of the competition and Consumer Act 2010 (Cth), a person in trade or commerce must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive. The owner of the resort has breached this section by providing information that is deceptive and misleading. The information in the brochure is misleading since it provides information that is not true. It is false since it purports that the resort can offer the said services but in the real sense it cannot. It is an offense to breach section 18 and the owner of the resorts can be held accountable on this basis. In the case of Re Henjo Investments Pty Limited; Henry Saade, Saade Developments Pty Ltd v Collins Marrickville Pty Ltd, the defense was found guilty of misleading and engaging in deceptive conduct after failing to provide all the information regarding the sale of the restaurant2. Misleading representation about a business is prohibited in Australia. According to section 37(1), a person must not (in trade and commerce) make a representation that is false and misleading in a material. This is particularly when it concerns matters of risk or profitability. The production of the information in a brochure that is false and misleading by Bliss Island contravenes this provision. This is considering that the main intention of the resort was to attract the customers so as to make profits. According to section 37(2), a person must not make false representation in trade and commerce through an advertisement or otherwise. The brochures are forms of advertisement that were used by the resort and it influenced the decision of Julian and Anna. The misleading and false representation indicated that the resort could offer high quality services. Since the information was false and it was also intended for attracting the customers the resort was in breach of section 37(2). The management was aware that the information was false and misleading since it was confirmed by the owner who was fully aware that the resort could not provide such services to the customers. The contravention of section 37 may lead to pecuniary penalty. This is an indication that the owner of the Bliss Island is likely to face pecuniary penalty for the false representation of the resort. In the case of Google Inc v ACCC, the issue of misleading and deceptive conduct arose after an advertiser’s web address was used as sponsored link3. In a court of law Julian and Anna have to prove that the information that they relied upon from the resort was actually false, deceptive and misleading. It is therefore important for the brochure from the resort to be presented as part of the evidence. The information that was provided by Sandra may not be used as it may prove difficult to obtain. The use of unfair business practices for the purposes of attracting customers is therefore strictly forbidden in Australia. Apart from the failure of the resort to offer the services that it had purported, Julian and Anna ended up loosing their items. The management had posted a notice that the items are left in the room at the owner’s risk. The notice further indicates that Bliss Island doe not take responsibility for any items left in the room. The management has also clearly outlined that it does not take any responsibility including actions in contract law and tort. Unfortunately the loss of items was as a result of the mistake of the housemaid who forgot to lock the door. According to the contact law in Australia, there are no requirements for a contract to comply with any formalities. On the other hand a contact is considered valid once there is an agreement. In the case of Clarke v Dunraven, the contract which was binding was made through terms and conditions of a yachting competition4. The notice by Bliss Island is clearly visible to the visitors and once Julian and Anna entered the room and boarded it, a contract existed between them and Bliss Island. Although the housemaid made a mistake by failing to lock the door which led to the theft, Bliss Island is not responsible under the contract law. The management of the resort could argue that they had posted a notice which was clearly visible to Julian and Anna. The mistake was on their part for leaving their items in the room as the notice indicated that it was at their own risk. Julian and Anna are in beach of contract according to the contract law as they decided to leave their items in the room despite the warning. The actions of the house maid can be considered as negligence as it was her duty to ensure that the door of the rooms is locked. On an individual capacity, she can be held liable for negligence of duty. This will however not affect the resort as the resort cannot be held liable for the theft. Julian and Anna have to provide sufficient evidence that the housemaid did not lock the door which contributed to the theft. Under the contract law, Julian and Anna cannot sue the resort for the loss of their items. In the case of Interfoto Pictures v Stiletto Visual Programs, the failure to read the terms and conditions by Stiletto Visual programs led to liabilities5. However this does not means that the incident cannot be investigated. The investigations have to be carried out since theft is a criminal offense in Australia. Bliss Island cannot compensate Julian and Anna for their loss of items since the contract law protects them. The only defense that exists on the part of Julian and Anna is the concept of unfair terms. Proving beyond reasonable doubt that the term of the contract was unfair will be required. According to section 23(1), the consumer contract is void if unfair terms have been used. According to section 24(1), a contract is considered unfair if it is imbalanced and it only favours a particular party. On the other hand, a contract is considered unfair if it serves the interest of one party6. The notice that has been posted by the resort is purely for its own benefits. It does not consider the interest of the visitors. On the other hand, the contract can be considered as a way of the resort escaping responsibility. This is considering it has to take care of the welfare of the visitors including their properties. The court will however be required to consider the terms of the contract so as to determine whether it is unfair or not. It is only through this determination that Julian and Anna can be compensated. The chances of proving that the contract is unfair are quite slim but the couple can pursue the matter through the use this means. Conclusion In conclusion, it is evident that the Julian and Anna went for the trip after relying on false, deceptive and misleading information. Bliss Island contravened some section of schedule 2 of the Competition and Consumer Act 2010 (Cth). Julian and Anna can take legal action due to the contravention. However, in terms of the loss of items, Julian and Anna breached the contract by leaving their belonging in the room despite the warning. It is evident that they can only rely on unfair terms of contract to argue their case for loss of items. References Competition and Consumer Act 2010 (Cth)-Schedule 2 Re Henjo Investments Pty Limited; Henry Saade, Saade Developments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 39 FCR 546 (26 February 1988) Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 (6 February 2013) Clarke v Dunraven [1897] AC 59 Interfoto Pictures v Stiletto Visual Programs (1989) QB  433 Gray, A. (2013). Unfair contract terms: termination for convenience. UW Austl. L. Rev., 37, 229. Read More