Consumer Law Reform In Australia

Question:
Discuss about the Consumer Law Reform in Australia.
 
 
Answer:
Introduction:

Mojo Beverage placed the following advertisement in a local newspaper on 25 January:

Come one, come all! Fishermen and women of Lake Tranquil. We are offering to pay $100,000 to any person who catches Lord Harry, a trout which we have tagged and released into the lake.’

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The day after this advertisement was made was a holiday in Australia. Resident’s crowded lake tranuil with boats and others fishing by the lake side. During this operation, rumor spread that there was an error in the advertisement and the reward was to be lowered from the original $ 100,000 to$ 1,000. Ben who was among the fishermen got the rumor from a stranger who was fishing besides him just few minutes before Catching Lord Harry.  A certification was made by a representative of Mojo Beverage but he did not make any comment on the amount to be rewarded therefore ben is claiming that Mojo owes him

Advise Mojo Beverage, explaining applicable legal principles and citing relevant authorities.

In this case Mojo Beverage placed an advertisement in local newspaper for local people to accept and participate in that open challenge to catch that fish named Lord Harry and that person will get a reward of $100,000.

There was an error in advertisement which was shown by the offeror in the amount of reward. The original price was $1,000 but price shown in that advertisement was $100,000. So there was a huge difference between the amounts of reward. Ben is the guy who catches that fish and he heard that news from a stranger that the original amount of reward is $1,000 just few minutes before catching the fish Lord Harry. A representative of Mojo beverage supposed to clear that things but he did not say anything about the amount of the price before releasing Lord Harry into the lake. 

The right of consumers and the fair trade is protected in Australia by the ACL. Engaging in misleading advertisement or misleading conduct is highly prohibited and heavy penalties taken this is in accordance to section of the ACL. Meaning that when the reward is reduced from $ 100,000 to $ 1,000. The false statement shown in advertisement was the reason of reduction in the price. Mojo Beverage changed their statement that original price of reward is $1,000. Then Mojo Beverage will be considered as the victim of misleading conduct. This reduction in amount of price creates a huge economic difference in price since it is scarce for suppliers who provide goods and services. This change in price will affect all the other parties who were participating in this game. The composition of trade amendment act was passed by both the parliament houses but the royal assent was received on unfair contract (Paterson, 2012). Mojo Beverage is having a risk of being fined by court of up to $1.1 million if they give $1,000 to Ben instead of giving him the price shown in the advertisement by Mojo Beverage which is $100,000 and they have to face a lots of problems such as redress and public warning hence they should pay $100,000 to Ben which was claimed by him after winning that competition. It is a good advice for the company to award Ben the initial rice of failure to do so they shall have breach the Australian consumer law which was in operation by the time the advertisement was being made. So at the end Ben got his money which was owned by Mojo Beverage as a Reward for the fishing competition.

 

Dorper Sheep Sellers Pty Ltd was negotiating the sale of dorper sheep flock to a firm called Livestock Brokers, which intended to on-sell the flock. On 1 June Dorper Sheep Sellers sent a letter to Livestock Brokers, setting out the number of sheep flock for sale and the price per head. It asked Livestock Brokers to reply within 14 days.

Livestock Brokers sent a letter by reply dated 6 June, inquiring whether the sale could be financed on the ‘usual terms’. Dorper Sheep Sellers did not reply.

2 On 14 December, at the opening of business, Livestock Brokers sent a fax stating: ‘We accept your offer of 1 June for the sale of sheep flock’. The same day Dorper Sheep Sellers faxed back, saying: ‘You’re too late. We’re just in the process of selling the flock to another purchaser. Formalities will be completed by tomorrow’. Advise Livestock Brokers as to the rights and liabilities of the parties in the light of the commercial interactions taken place between them.

Presume in (a) above Livestock Brokers sent the fax on 14 June but because of a transmission error Dorper Sheep Sellers did not receive it. Advise Livestock Brokers in this circumstances.

Annually there is an experience in Australian courts of the parties complaining about the breach of agreement or a valid reason affecting the agreement.  For the contract to be valid the two parties must clearly ass the following processes.

Agreement:-

An agreement is the best basic thing for a valid agreement. For an agreement to be valid an offer have to be made and the offer must be accepted by the other party. The parties can articulate their terms through agreement and they have a chance to set their terms and conditions. In all material respect, the contract must effective hence, an agreement which is vague or fault constitute a mere agreement to accept and will not be put in place (Dodge, 2006).

Consideration:-

Consideration is the deal offered by the seller to the buyer either through transaction is a key element in Australia before a deal is signed. Many rules and qualifications are contained in consideration since it is an important document during agreement. Consequently, gratuitous promises are made through the will they are enforceable. Of late, the doctrine of promissory estoppel now work in permitting deals even in the absence of consideration which are valid.

Intention to Create Legal Relations:

For a contract to exist a legal relation must be created between parties on an agreement. The evidence not captured in agreement on consideration are captured on this document hence it is an important requirement during agreement and should be kept safe and separate. For the party seeking to prove the parties relationship and demonstrate their intention, the onus is on them, while relevant, do not carries with it any presumption of the parties’ involved contractual intention (Dodge, 2006).

Capacity:

Agreement is enforceable to individual who get it hard to sign agreement under prevailing terms and conditions.  Lack of capacity creates fear of vulnerability to explosion. The result of statutory developments at a state level which has led to emergence of different rules have made the area to be more complex

Formalities:

In the sale of asset like land, real estate, guarantees or sale of building formalities are required however, formalities are not required in most cases and it not much essential for a contract to comply.

 
Privacy of Contract:

According to the common law, only parties involved directly to the contract have the rights and obligation under the contract even if the contract is to benefit the third party. The application of this harsh doctrine has given harsh result where the third party is intended to benefit from the contract and in some cases remedies or exemption have been put in place to limit and avoid those harsh results (Peden, 2001).

Terms:

The terms of the agreement determines the obligations and the rights of the parties to contract. These terms are always implied or expressed either in writings or orally. In the case of consumer contract, the term is applied by the common law as a result of the conduct of the parties.

Construction:

Interpretation of terms is an essential thing once the terms have been established. The contact should be analyzed and given the meaning intended by the parties, where this is not applied, the court may be involved to give the effect to that intention. In that regard, many rules has emerged to help the court do the work.

Classification:

Terms can be classified in a way that it makes an impact when the agreement is breached. When a term is classified as a condition, then the innocent party is allowed to terminate the contact when breach occurs and when the term is classified as a warranty then the innocent party will only be permitted to claim the damage for the breach. It is also important to understand how the court will categorize a term of an agreement (Hamberger, 1995).

An agreement can be discharged in the following ways:

Discharge by Agreement

Arties can terminate the contract they had signed through an agreement. This can be done through signing new contract or it might take the form of termination provision in the contract itself (Carter & Tolhurst, 2008).

Discharge for Breach

When a contract is breached then the non-breaching party has the right to terminate the contract. The contract for breach can be terminated if there is a provision in the contract which gives the non-breaching party the right to do so or when the other party renounces their obligation under the contract. Consideration for breach is also expressed when the breach is sufficiently serious (Carter & Tolhurst, 2008).

 
Discharge by Frustration

An agreement can be brought to an end if there is a barrier which is beyond control to the parties.

In the case of Dorper Sheep Sellers Pty Ltd, an offer had been made to Brokers and given a period of 14 days to accept the offer. Broker later send a fax inquiring the mode of payment so as to seal the contract. Dorper who were to sale the sheep send a fax responding to the terms but the fax was not delivered to the recipient. Broker late in the period send another mail accepting the offer which had been offered initially but they were late since they were finalizing on another deal with another party.

My advice is that according to the general rule, until the acceptance of an offer is relayed to the offering party, a contract in not concluded. But in this case, an exception based on convenience and expediency. The rules states that whenever a mode is contemplated by the parties even when just a permitted mode or possible of a communication. In this case Broker have the right to go to the court to stop the agreement being made by the other part for the sale of sheep since they had complied to the stated duration which was two weeks. Dropers should also withheld the contract they were making since another contract had been made by brokers and they risk getting penalties of breaching.

In case the second fax by Broker on 14th had not reached the target. Then the contract is void since it is insufficient to create an offer through silence. Despite this, communication of acceptance is not very necessary if the silence is supplemented with other conditions. But for this case it was necessary for the company to send a feedback for them to be awarded the contracts therefore, Dropers will have the go ahead to sell their sheep since no contract was made.

Stuart had a 5-year written lease of a shop in the Prince Mall. He entered the lease at $1000 per week at the end of 2010 and ran a successful music business for about two-and-a-half years. In 2013 the business was affected by decreased sales in CDs as a result of the increased ability of people to access music through the Internet. In December 2013 Stuart asked the lessor, Westphalia Marts Pty Ltd, for a reduced rental of $700 per week until the business improved. He told the lessor about his business problems and plans to diversify and indicated that he might have to terminate the lease early.

Westphalia Marts agreed to allow Stuart to pay the reduced rent and in January 2014 Stuart began to pay the new agreed rent of $700. In December 2014 Westphalia Marts decided to sell the Mall, including all the shops. They

Wanted the income from the Mall to look healthy, and asked Stuart to pay the full amount of $1000 per week rental beginning in January 2015 and also demanded the shortfall of $300 per week for each week of the year 2014.

Advise Stuart, with reference to the relevant principles.

Properties are rented or leased for commercial and personal use in Australia. Therefore there are obligation and rights. These are the reasons, which occur most of the time and by which disputes and problem rises between two parties.

  • Payment of rent
  • Repairmen of the premise
  • Subleasing
  • Leasing issue retail and
  • Your right to enjoy the property is limited by the landlord
 
In Australia, there are two type of tenancy:

Fixed tenancy allocated for agreed period of time.

A periodic tenancy being paid weekly or monthly regarding to the agreement (Sherman & Koskenniemi, 2002).

Rent can be terminated only if there was a prior communication between the tenant and the owner. In Australia the tenant and the owner can agree on emerging issue concerning the rent without involving authorities. Alternatively the issue can be taken to the court and a review will be made regarding the last time rent was changed and also considering the building of same quality. In State of Tasmania the jurist is that the solely person allotted the duty of reviewing a rise or a decrease in quantity of rent. so as for the rent to be reviewed, associate degree application should be created by the tenant then the assembly can contemplate the vary of rent applied for the similar homes in alternative location, the terms of the residence and therefore the amount the last increment was created before creating the ultimate judgment (Chambers, 2008).

In this case, associate degree agreement was created by the Stuart with the Westphalia Marts however not the new property owner thus the policy of the terms ought to be revered. In Australia, tenant and the property owners have right and freedom to agree on the rent to be paid and Westphalia Marts had in agreement on $700 along with his tenant thus this could not be modified. Considering alternative issue, the amount within the rent had been reduced had been monitored by the court and according to the laws they cannot be changed over one year thus the Stuart ought to get a professional for her rights. Finally, the new company is the new property owner and according to the rule rent cannot be increased lower than one year hence this new company is the new property owner thus i’ll advise the Stuart to not pay the $300 per week for the previous year and abide by the new agreement by Westphalia Marts.

 
References

Nottage, L., 2009. Consumer law reform in Australia: Contemporary and comparative constructive criticism. Queensland U. Tech. L. & Just. J., 9, p.111.

Ramsay, I., 2012. Consumer law and policy: Text and materials on regulating consumer markets. Bloomsbury Publishing.

Kolivos, E. and Kuperman, A., 2012. Consumer law: Web of lies-legal implications of astroturfing. Keeping good companies, 64(1), p.38.

Paterson, J.M., 2011. The new consumer guarantee law and the reasons for replacing the regime of statutory implied terms in consumer transactions. Melbourne University Law Review, 35(1).

Corones, S., Consumer Guarantees in Australia: Putting an End to the Blame Game’ (2009). Queensland University of Technology Law and Justice Journal, 9, p.137.

Carter, J.W., Harland, D.J. and Lindgren, K.E., 1996. Contract law in Australia. MICHIE.

Peden, E., 2001. Incorporating terms of good faith in contract law in Australia. Sydney L. Rev., 23, p.222.

Carter, J.W. and Tolhurst, G., 2008. Mason and Carter’s restitution law in Australia. LexisNexis.

Dodge, W.S., 2006. Investor-state dispute settlement between developed countries: reflections on the Australia-United States Free Trade Agreement. Vanderbilt Journal of Transnational Law, 39(1).

Hamberger, J., 1995. Individual Contracts What Do They Mean for Australia? The Economic and Labour Relations Review, 6(2), pp.288-299.

Bradbrook, A., MacCallum, S. and Moore, A., 2002. Australian real property law. Australia.

Chambers, R., 2008. An introduction to property law in Australia.

Sherman, B. and Koskenniemi, M., 2002. The making of modern intellectual property law(Vol. 1). Cambridge University Press.

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