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LAW - tutorial - ILAC summaries
Business Law (LAWS1100)
University of Queensland
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Tutorial 3 (Tort of Negligence) Vinny is in the final year of his Business degree at UQ. The night before his final exam for Laws1100 Business Law, he goes to his favourite local restaurant/café called ‘The Hungry Student’ to order and eat dinner. The restaurant is often busy because it is frequented by many University students. 'The Hungry Student' is owned and managed by Bazza who is also the chef in the restaurant kitchen. When Vinny enters the restaurant, he sees that every table and chair is already full with customers. Bazza tells Vinny that because the restaurant is so busy he will have to wait for at least an hour to get a table to sit at. Vinny asks Bazza whether there is any possible way of getting somewhere to sit down and eat his dinner because he is hungry and cannot wait that long. After hearing this and because Vinny is a regular customer, Bazza offers him a spare table and a chair in a room next to the kitchen that Bazza uses for storage. However, Bazza fails to tell Vinny that the chair has not been used for two months. Although the chair isn't broken, the back legs of the chair have become very loose over time. A customer warned Bazza about this problem two month ago, but although Bazza had been meaning to get the chair repaired, he has not managed to do so yet. Vinny sits at the table in the spare room and Bazza serves him his dinner. After eating his dinner, Vinny swings backwards and forwards on the chair so that the front legs of the chair continually lift off the ground. After a number of swings, both back legs snap off, causing the chair to collapse under Vinny, who falls hard to the ground. Bazza helps Vinny up and asks him if he is alright. Vinny is a bit dazed by the fall and is a little sore, but thinks he is otherwise alright. He tells Bazza he is fine. The next day Vinny awakes with severe back and neck pain. Vinny decides to sit his Business Law final exam that morning. However, because of the severe back and neck pain, his concentration and ability to do well in the final exam are severely compromised. He ends up failing the Business Law final exam and has to repeat the course the following semester. He also ends up incurring medical costs for treatment for what turns out to be muscle damage to his spine and neck, and he cannot work for two days. Advise Vinny if he can bring an action against Bazza for the tort of negligence? In doing so, consider whether Vinny will be able to claim compensation for his Course fees (due to him failing the final exam and having to repeat the course), his medical costs and wages for 2 days off work? (Please use ILAC to answer this Question) Vinny – Plaintiff, fell down, want to claim compensation from Bazza Bazza – Defendant, owner of the restaurant Issue - Has Bazza committed the tort of negligence against Vinny? Law To successfully sue a Defendant in the tort of negligence, a Plaintiff must establish 3things: - The Def owes them a duty of care The Def breached the duty of care The Def’s breach caused them to suffer reasonably foreseeable harm 1. Duty of care - The onus is on the Plaintiff to establish the existence of the duty of care - An occupier of a premises owes a duty of care to all persons entering the premises to ensure that the premises are safe. o Case: Australian Safety Stores Pty Ltd v Zaluzna (1987) - Donoghue v Stevenson [1932] established the “Neighbourhood principle” that identified a number of relationships which by law automatically owe a duty of care. 2. Breach of Duty [S9 Civil Liability Act] a. Legislation: Section 9(1) - The Civil Liability Act i. Defendant breaches their duty of care when they fail to what a reasonable person would have done in the circumstances ii. The risk was not insignificant iii. The risk was foreseeable (that is, it is a risk that they knew about or ought reasonably to have known about) b. Legislation: Section 9(2) To determine what a reasonable person would do, the court will take into account: The probability of harm The likely seriousness of the harm Case: Paris v Stepney Borough Council [1951] The burden of taking precautions Case: Bolton v Stone (1951) o If the risk was foreseeable, not insignificant, and a reasonable person would have taken precautions taking into account the probability of harm, the likely seriousness of the harm, the burden of taking precautions and the social utility of the defendant’s activity The social utility of the defendant’s activity 3. Causation [s11 Civil Liability Act] - The defendant is only responsible for the harm if there was factual causation and if the actual harm a reasonable consequence - The defendant is only responsible for the harm if: o The breach of duty was a necessary condition of the occurrence of the harm the careless act caused, either directly or indirectly, the harm (“factual causation test”) – the “but for” test Case: Yates v Jones [1990] o It is appropriate for the scope of the liability (“scope of liability test”) of the person in breach to extend to the harm so caused. Case: Overseas Tankships v Mort [1961] Apply - 1. Duty of care Bazza the ‘occupier’ of the restaurant. The restaurant therefore owes a duty of care to the customers including Vinny. ****no establish categories, like Vinny rocking the chair, if he didn’t rock, will the chair still break? ***for the exam part. Vinny had an option to not go for exam and ask for a differ, like get a doctor letter Class Exercise 1. When Vinny asked Bazza whether there was any possible way of getting somewhere to sit down and eat his dinner, Vinny said “I’m hungry and can’t wait that long because I have a big final exam tomorrow for one of my subjects and I don’t want to fail it. I need to sit down and eat something now to help me study tonight so I do well tomorrow. My future depends on it.”? 2. Bazza said to Vinny, “You can take a seat in the spare room. However, the only spare chair in there is quite old and loose and whilst it should be okay to sit on, you will have to be very careful.” TUTORIAL 4 (Contract 1) Tony is a carpenter who needs to purchase a new electric drill. He visits Mary’s Tool and Hardware Warehouse to look at the range of electric drills on display. As Tony enters the hardware store, he sees that on a table at the front of the store there are a small number of electric drills. Beside these drills, is a large sign that states: “The Buzz 4500 cordless electric drill. SPECIAL OFFER FOR TODAY ONLY: $250”. A Sales Assistant walks up to Tony and asks him whether he needs assistance. Tony replies: “Not at all. I have found exactly what I want. That’s an offer that is too good to refuse. I am definitely going to buy it.” Tony then takes one of the Buzz 4500 drills over to the counter where Lisa, a checkout assistant, is serving another customer. Tony places the electric drill on the counter and while he is waiting for Lisa to finish serving the other customer, he remembers that he saw the same drill at another hardware store for $199. By this time Lisa has finished serving the customer in front of Tony. She then says to Tony, “May I help you?” Tony replies: “I am really sorry, but I remember seeing this drill cheaper elsewhere so I don’t want to buy it anymore.” Lisa responds: “Sorry Sir, but I’m afraid that I’ve studied Business Law and it’s too late to pull out. You have to buy this now because we have a formal agreement and you have accepted our stores offer by taking the drill from the table and making the statement to the Sales Assistant.” Did Tony accept the store's offer by placing the electric drill on the counter? ILAC Drill on table ($250) – invitation treat Tony – takes drill to counter – offer Tony – changed of mind – termination of an offer Issue Is there an agreement between Tony and Mary’s Tool and Hardware Warehouse? Law - For a simple contract to be established, you have to satisfy 3 elements? o Consideration o Intention to enter a legal relationship o Agreements - - An agreement consists on an offer and an acceptance. General rule: Agreement = Offer + Acceptance Neither advertisements nor the display of goods in a shop are likely to be legal offers. Instead, they are called invitation to treat. An offeror is entitled to revoke their offer at any time before acceptance is made. Case: Pharmaceutical Society of Great Britain v Boots o Advertisement nor the display of goods in a shop are likely to be legal offers. They are invitation to treat. o ***discussion of the case Case: Carlill v Carbolic Smoke Ball Company [1893] o Invitations to treat can become offers if they evidence a willingness to enter into legal relations o Acceptance must be communicated, written words, action by conduct or performance Application - The display 4500 cordless electric drill is not an offer because it is an invitation treat. The display is an invitation by Mary’s Tool and Hardware Warehouse to the public to offer to buy the product from them. Case: Pharmaceutical Society of Great Britain v Boots - The invitation to treat does not become offers because Tony did not evidence willingness to enter into legal relation. Tony only took the drill and places it on the counter however he then changes his mind. Tony can revoke his offer if he does it before the acceptance. Lisa asked “May I help you?” isn’t an acceptance which means Tony is able to revoke his offer. There was no agreement between Tony and Mary’s because there was no offer and acceptance. Conclusion On the balance of probability, a court would likely decide the display of goods was an invitation to treat and there is no agreement between Tony and Mary’s. The offer was revoked before an acceptance was made. Tony is not obliged to purchase the item. A court would likely decide that there is no agreement between Tony and Mary’s Hardware because the sign of the offer is an invitation to threat and Tony revoke his formal offer before acceptance is made. Class Exercise Ricky owns and runs a car sales yard. Benny is looking to buy a car. Benny negotiates with Ricky to buy a used Toyota sports car from Ricky. Benny says “I’ll pay you $15,000 for the used Toyota sports car”. Ricky says “Yes, done”. Benny then pays Ricky $15,000 and Ricky hands him the keys. Benny then says to Ricky, “Does it have a genuine Toyota engine? Ricky says “Yes”. However, Benny later discovers that the engine is not a genuine Toyota engine. Benny is angry and says that Ricky broke his promise under the agreement. Will Benny be able to make a claim against Ricky? Issue - Did Benny provide valid consideration for Ricky’s promise that the car had a genuine Toyota engine? Law - An agreement is not a contract unless both parties to the agreement have paid, or promised to pay, a price. The contribution of each party to the agreement is called past consideration If a promise in a statement is given after an act has been performed, this will be considered past consideration. Application Ned. Ned also agreed to let Billy start a work apprenticeship at Ned’s Gladstone automotive repair shop where Ned would train Billy to become a car mechanic. Ned and Billy agreed to this on the understanding that Billy would not go and work at the other competing automotive repair shop in Gladstone, at least until Ned retired from the automotive repair shop business. When Billy turned 18 years of age, Billy had a huge argument with Ned and now refuses to pay Ned back the $7,500. Billy has subsequently moved out, and is working at another Gladstone automotive business which competes against Ned’s business. Advise Ned and Billy Issue Will Ned be prohibited from entering into various contracts with Billy due to Billy lacking contractual capacity? Law 1. Capacity to contracts (Minors) - For a contract to exist, the parties must have contractual capacity. - Certain persons or classes of persons, who lack the capacity to enter into a contract, are prohibited by law from entering into legal contracts. - This is to protect vulnerable people from the possibility of exploitation. - One class of persons who lack legal capacity are minor: persons below the age 18 However, there are two types of valid contracts with Minors: 2. Contracts for necessaries - Necessaries defined as goods suitable to the condition in life of a minor and to the minor’s actual requirements at the time of sale and delivery. - Necessities are determined by reference to a minor’s ‘existing life style’ and must be necessary for maintaining that lifestyle. - Case: Bojczuk v Gregorcewicz (1961) o Gregorcewicz (a minor) wishes to emigrate to Australia o Bojczuk (a relative) loaned her the money for the trip o Gregorcewicz doesn’t want to pay and commit for the contract o Is the trip to Aus necessary for her survival? o Gregorcewicz situation was in a good and stable condition as she have a work o Therefore, it is not necessary for survival. 3. Contracts for beneficial services - Contracts that are beneficial for a long term ability to earn income. - Case: Hamilton v Lethbridge (1912) o Lethbridge (a minor) work as an articled clerk for 5 years for Hamilton in a Toowoomba solicitor o The term of the agreement was that after completing his term Lethbridge would not practice as lawyer within 50 km of Toowoomba o After completing his term, Lethbridge argued that the contract with Hamilton could not be enforced because it was made while he was a minor. o Hamilton argues that the contract was a beneficial contract of service o Court decided that the benefits to Lethbridge of receiving 5 years of legal training outweighed the inconvenience of being unable to practice in Toowoomba. o Therefore, the contract was a beneficial contract of service and enforceable against Lethbridge. Where the Court decided that the benefits to a minor of receiving 5 years if legal training in a Toowoomba law firm, outweighed the inconvenience of being unable to practice Application. From the facts of the case, Ned is wishing to: - Be reimbursed the $7500 - Seek an injunction to restrain Billy from working at competitive firm Billy’s argument is that as he was under the age of 18 years at the time the contracts were entered into, the promises to pay Ned back for part of the car and not work in Gladstone at another competing automotive repair shop are both unenforceable due to his lack of capacity. (intro to app) As to the first issue, would a car be classified as a necessity for a person in Billy’s circumstances at that time? 1. Contracts for necessaries. - Ned promise to look after Billy, Ned provided Billy necessities like food, clothing, and shelter. - Ned purchasing the second hand car for Billy is it a necessities for his living? - Ned agreed to pay the full amount of $15000 for the car and Billy will just have - to pay $7500 when he turn 18 years old. In the case of (Bojczuk v Gregorcewicz), Gregorcewicz does not want to pay and commit for the contract even she was in a stable condition. In the end, Bojczuk could not enforce Gregorcewicz’s promise to repay the money because the contract was for the provision of money for an international trip, something that was not capable of being classified as a necessary. - However, was purchasing the car a necessity for Billy. Even Billy has the ability to repay Ned back but the car was not capable of being classified as a necessary. - Without the car, Billy could still go for fishing and swimming. - Therefore, Ned could not enforce Billy’s promise to repay the money because the contract was for the provision of money for buying the car, something that was not capable of being classified as a necessary. Where a plane ride is a luxury, same reason as that for this car is a luxury as well Scarborough v Sturzakaer (1905) - Bicycle was deem to be necessities for work purposes As to the second issue, would an agreement relating to a work apprenticeship at an automotive repair shop be a contract for capacity. 2. Contract for beneficial services - Ned agreed to let Billy start a work apprenticeship at Ned’s Gladstone automotive repair shop where Ned would train Billy to become a car mechanic. - They both had an understanding, that Billy would not go and work at the other competing automotive repair shop in Gladstone, at least until he retired. - It is similar to the case of (Hamilton v Lethbridge), where Lethbridge would not practice as a lawyer within 50km of Toowoomba after working as an articled clerk for 5 years for Hamilton. - In the situation between Ned and Billy, Billy had gained benefits from Ned as a car mechanic outweighed the inconvenience of being unable to work at another Gladstone automotive business which competes against Ned’s business. It is when the contract is in writing, it is presumed that the written contract contains all terms agreed between the parties. Where a contract is reduced to writing, where the contract appears in the writing to be entire, it is presumed that the writing contains all the terms of it and evidence will not be admitted of any previous or contemporaneous agreement which would have the effect of adding or varying it in any way Generally, if there is an inconsistency between a written term and a verbal promise, the court will favour the written term and disregard the verbal promise Case: Van den Esschert v Chappell (1960) - Chappell asked Van den Esschert if the house was free from any infestation of white ants and Van den Esschert assured Chappell that it is - The house turned out to be infested by white ants and Chappell sued Van den Esschert for breach of contract - The assurance of Van den Esschert to Chappell is the one that lead them to the contract. - The court decided parole evidence rule did not apply as the written contract made no reference at all to white ants, so the complete agreement consisted of the written contract and verbal assurance 2. Collateral Contract A representation that forms a small pre-existing contract, which enables the primary main contract to come into existence For a collateral contract to be enforceable: - The defendant makes an oral statement and the primary main contract is written The oral statement was intended as promise – made to induce entry to the primary main contract The collateral contract is not inconsistent with the terms of the main written contract Entry into the main contract is consideration for enforcing the promise made under the collateral contract. Breach of the oral statement or promise entitles the innocent party to damages. Case: De Lassalle v Guildford (1901) - - De Lassalle agreed to lease the house from Guildford Before signing the written lease, De Lassalle asked Guildford whether the drains were in order De Lassalle explain that his previous home drains were blocked and flooded the house, and he does not want it to happen again Guildford assured De Lassalle that the drains were in order and they signed the lease which did not contain any reference to the drains Sadly, the drains were blocked and in the end the house was flooded Court say that Guildford verbal assurance was not term of the lease, the assurance did amount to a collateral contract, in return for Guildford promise about the drains De Lassalle had entered into the lease Guildford had breached the collateral contract and De Lassalle was entitled to compensation Application 1) Parole Evidence Rule Tommy’s verbal promise is not excluded from being a term of the written supply contract under the parole evidence rule because it was intended to be a part of the contract. As mention in the text, Sophia explain that her restaurant has an incredible reputation Nationwide for serving extremely fresh food. Tommy also mention that his seafood is very fresh, and will take no more than 24 hours from the time it is caught to the time when it is delivered to your restaurant door. After Sophia hearing all the details, she was very pleased and signs the contract without changing it. 2) Collateral contract Although the verbal promise by Tommy is unlikely to amount to a term of the contract with Sophia (because of the …) it may be possible that Sophia could enforce Tommy’s promise if she can prove that it amounts to a ……. It is similar to the case De Lassalle v Guildford (1901), as Guildford verbal assurance was not term of the lease, the assurance did amount to a collateral contract, in return for Guildford promise about the drains De Lassalle had entered into the lease. To prove this, 4 requirements from De Lassalle v Guildford (1901) must be establish. Applying these requirements to the facts: There is collateral contract because: - - - Tommy make an oral statement and there is a main contract because the oral statement was that the seafood is very fresh and it will be delivered no more than 24 hours from the catch. The main contract states that the seafood will be fresh. Tommy intend his oral statement to be a promise. It was made to induced Sophia into entering the contract because Sophia mentioned that her customers expect the freshest seafood in town from her restaurant. Then, Sophia entered the contract after the promise was made. The oral statement made by Tommy was consistent with the written terms of the supply contract because both of it is in regard of the freshness of the seafood. Sophia provide consideration for the collateral contract because without the promise she will not enter the primary contract thus the consideration she gave is sufficient. Therefore, Tommy breached his oral statement because he did not keep his promise. Conclusion On the balance of probability, a court would likely decide Tommy breach his oral statement and entitles to pay for damages to Sophia. The verbal promise is a term of the contract and Sophia can sue Tommy for breach of the verbal promise. Due to the formation of a Collateral Contract, Sophia can enforce Tommy’s verbal promise and claim damages. Class exercise How, if at all, would your answer change if: After Tommy says to Sophia: “My seafood is very fresh. In fact, my seafood will take no more than 24 hours from the time it is caught to the times when it is delivered to your restaurant door,” his promise is then incorporated into the signed written contract with Sophia? Some things to consider with this question: 1.) Is the statement a Term or Representation? - Term 2.) Has the term become an express term of the contract? Yes 3.) If the term has become an express term, what is the importance of that term to the parties? Test of essentiality 4.) Is the term a condition or a warranty? 5.) What remedy could be sought? Rescind the contract Law 1. Agency - A legal term used to describe (the agent) who acts on behalf of another (the principal) in dealing with a 3rd party. - An agency relationship is a fiduciary relationship, one in which the agent must always put the principal’s interests above their own and always act under the control and direction of the principal. The relationship of agent/ principal gives rise to a number of obligations and duties on the part of both the principal and agent. These duties and obligations are both contractual and fiduciary in nature. 2. Actual authority - Actual authority arises out of an agreement between the principle and the agent. - An actual authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. - Case: Freeman & Lockyer v Buckhurst Park Properties Ltd [1964] - Ways in which an agent can be authorized to act on behalf of a principal include: Express Actual Authority - Can expressly authorize the agent, in writing or verbally, to act on the principal’s behalf. - Express agencies may be created by deed, other writing or orally. - Power of attorney is a written grant of express actual authority to an agent. It empowers the agent to sign documents and make decisions on behalf of the principal. Implied actual authority - Whenever an agent is expressly authorized to act on a principal’s behalf there is a grant of implied authority to do all things necessarily incidental to carrying out the principal’s express instructions. - Case: Peterson v Moloney [1951] ~ implied authority was not found here - The principal can authorize the agent to act on the principal’s behalf by implication, by appointing an agent to a particular position it is often obvious that the agent will be required to enter into a contract with at 3rd party on the principal’s behalf. - An agent may have implied authority to act on behalf of the principal in order to give business efficacy to those instructions. 3. Apparent authority - If the principal allows a 3rd party to believe that the agent has authority to act on the principal’s behalf then even if the agent was not actually authorised by the principal to act on their behalf, the principal will be bound to honour the agent’s dealings with the 3rd party. - There are 3 elements that the agent has to fulfil to have apparent authority: o The 3rd party did not know that the agent did not have actual authority o The principal ‘held out’ the agent as having authority to act on the principal’s behalf--o The 3rd party relied upon holding out, and reasonably assumed that the agent had actual authority. Put case – paranormal 4. Fiduciary duties of an Agent - The agent is in position of trust and responsibility, and the agent therefore owes a range of duties to the principal under the law of equity. These duties are often replicated in the contract of agency and can become contractual obligations as well. - Duties of an agent includes following the principal’s instructions, duty to communicate information o To follow instructions. Agent is obliged to obey the lawful instructions of the principal. Failure to do so makes them personally liable to the principal for any harm caused to the principal as a result of the agent’s breach of duty. They will not be liable if they do not carry out instructions that are unlawful. Case: Bertram Armstrong v Godfray [1830] Agents owe….. to their principal as a result of the relationship of trust and confidence Application 1. Actual authority - Davo and Christina have an Express Actual Authority as there was a written agreement between both of them. Christina appoints Davo to sell her house to the first buyer who ‘makes an offer over $ 1 million. She also instructs Davo to put up a ‘For Sale’ sign at the front of her property with words ‘All enquiries to David Barnes at Dave’s Real Estate’. - Therefore, Davo has the authority as an agent to sign documents and make decisions on behalf of the principal. - The principal (Christina) clearly stated the duration of the agent’s appointment (2 months) and state the precise scope of the agent’s authority (offer over $1 million). 2. Apparent authority. The 3 elements of apparent authority: - Patrizia does know that the Agent (Davo) have actual authority as the sign mention that all enquiries to David Barnes at Dave’s Real Estate, St Lucia. Patrizia saw the sign and contacted the agent. - The agent is allowed to make decision/ sell the house for the Principal if any buyer offer $ 1 million. - Patrizia as the 3rd parties knew that Davo have actual authorities. Therefore, there were apparent authority in this situation. 3. Fiduciary Duties of an Agent - Davo is in position of trust, responsibility and owes a range of duties to Christina under the law of equity. - Davo did not follow Christina instructions. o Christina told Davo in a written agreement to sell the house to the first buye who makes an offer over $1 million. However, Davo sold thr house to Patrizia for $850,000. o Davo has failed to do so making him personally liable to Christina for any harm caused by Davo’s breach of duty. Agent is obliged to obey the lawful instructions of the principal. Failure to do so makes them personally liable to the principal for any harm caused to the principal as a result of the agent’s breach of Can Sandra bring an action against Charles under s18 ACL? Has Charles contravened s18 of the ACL? Or Not? Law: Although located in a Schedule of the Competition and Consumer Act titled ‘Consumer protection’, an action under s18 does not have to be brought by a consumer. It can also be brought by a competitor. See: Gillette v Energizer ACL s 18 states that a person must not in trade or commerce engage in conduct that is misleading or deceptive or that is likely to mislead or deceive S18 Elements: - Defendant must be a person - no prohibition on who can bring action under s18 - can be a consumer, interested members of the public, or other businesses including competitors. - Engaging in conduct - A person will ‘engage in conduct’ if they make a statement or a claim or a promise, performs an action, or refuses to do any of these things – it includes both actions (doing things) or non-actions (refusing to do things ) if the definition of the TPA applies. - In certain circumstances, even silence can be conduct – Case: Henjo Investments v Collins (1988) - In trade or commerce - That the conduct involves or is associated with commercial activity/a commercial transaction. Is the conduct ‘misleading or deceptive or is it likely to mislead or deceive? Taco v Taco Bell – Two Tests: - Identify relevant sections of consumers to whom conduct is aimed at – identify the relevant section of the public by reference to whom the question of whether the conduct is, or is likely to be, misleading or deceptive falls to be tested - Is it misleading and deceptive to those consumers or not? - Only a small percentage of targeted consumers need to be misled or deceived - it is fair to say that the question is to be tested by the effect on a person, not particularly intelligent or well-informed, but perhaps of somewhat less than average intelligence and background knowledge, although the test is not the effect on a person who is, for example, quite unusually stupid (Annand v TPC). Sales puff or exaggeration may be misleading and deceptive (Given v Pryor) – but to determine such, apply the two tests from Taco. A statement that is literally true can still be misleading or deceptive - but to determine such, apply the two tests from Taco. Broadly speaking, it is fair to say that the question is to be tested by the effect on a person. Although, the question is not to be tested by the effect on a person who is, for example Application: 1. Sandra can bring an action under s. 18 against Charles because Sandra is a business competitor. 2. Charles has engaged in conduct because he made a claim through a large sign stating his restaurant the ‘The best French food in Brisbane, made will all fresh ingredients!’ 3. The conduct was in trade or commerce because it involves or associated with commercial activity of customers dining in his restaurant and paying for the service. Was the conduct misleading or deceptive or likely to mislead or deceive? Using the two tests from Taco v Taco Bell: Charles’ target his conduct at a section of the public because he intends to inform the public especially his potential customers that his restaurant sells food made from fresh ingredients It is misleading and deceptive to consumers because a small percentage of targeted consumers will be misled or deceived that all ingredients used are fresh. Furthermore, there’s two understanding from the slogan: Fresh from the farm or fresh from the tin. A small group of people of average intelligent might be misled that it is fresh from the farm/sea. Even if the intention was not to mislead, intention does not count. Conclusion: On the balance of probability, a court would likely decide that Charles sign on his restaurant window is misleading or deceiving. ILAC Seminar – Contract 2 Paula wants to go to the Gold Coast Go-Kart Race Track (GCGR) and drive a go-kart. Paula has driven gokarts at GCGR about 20 times in the past year. On each occasion she has paid for her ticket at the front counter. This ticket entitles her to drive a go-kart all day long and also to receive a locker key that will allow her to store her belongings in a secure locker in the change room. After entering into the contract at the front counter, Paula would then go to the next room which was the change room. She would store her belongings in one of the lockers in the change room, lock it, get changed into her drivers’ race suit and then head out onto the track for go-karting. In April 2017 whilst she is go-karting, a thief took a set of locker keys from an open box that was sitting on top of the unattended front counter. The thief opens her locker and steals her laptop, which was stored inside. Paula demands that GCGR pay for replacing her stolen laptop. However, the manager says that GCGR is not liable because there is a term in a large sign in the change room which states: ‘GCGR is not liable for any loss or damage suffered by customers while on the GCGR premises however that loss or damage may arise or be caused.’ Advise Paula whether she can claim damages under Contract Law? Issue 1 Is the disclaimer a term of the contract between Paula and GCGR? Law - A disclaimer is a statement that one of the parties will not be in breach despite failing to perform one or more of their contractual obligations. - Whether a disclaimer will effectively protect a business from liability for breach of contract depends upon: o whether the disclaimer is in fact a term of the contract o whether the disclaimer will be interpreted as applying to the breach in question - Disclaimer can be a term of a contract if they are: o Inappropriate into a written signed contract o Brought to a party’s attention by reasonable. See: Thornton V Shoe Lane Parking o Implied into the contract as a result of prior dealings - Prior dealings: a disclaimer can be implied into a contract as a result of prior dealings (the continuing relationship between the parties). If the parties have entered into similar contracts in the past, and those previous contracts contained a particular disclaimer, then that disclaimer can become a term of the contract and is implied into the present contract Case: Balmain New Ferry Co v Robertson o Balmain New Ferry, was a case where the disclaimer was only visible to the customer after payment for the Ferry (from Sydney to Balmain) had been made. However, the Court found that even though the disclaimer was not written into the contract or brought to the party’s the secured lockers, is a negligent act and is outside the scope of what a reasonable person would contemplate as occurring within this contract Conclusion The stronger argument is that although the disclaimer is a term of the contract due to prior dealings, it does not protect GCGR from their own negligent actions. Therefore, Paula can sue GCGR for the loss of her laptop
LAW - tutorial - ILAC summaries
Course: Business Law (LAWS1100)
University: University of Queensland
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