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LST5CCL Company and Commercial Law : Fairfax Media Limited

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Questions:

Discuss about the Company and Commercial Law, It necessary for us to analyze the situation offered to us in respect of the terns executed between Charlie and the EnviroPro Pty Ltd sales person, and see whether the employee’s words were legitimate enough to be framed as a contractual term.

Answers:

Question 1. 


Issue

The main problem here is finding out if according to the various General Contract Rules and the Goods Act (Victoria), Charlie would have his chance to file a fine case against the EnviroPro Pty Ltd Company or not.

 Rule

It necessary for us to analyze the situation offered to us in respect of the terns executed between Charlie and the EnviroPro Pty Ltd sales person, and see whether the employee’s words were legitimate enough to be framed as a contractual term.

It has been seen in cases like the one of Carlill v Carbolic Smoke Ball where it was ruled by the judiciary that any a ‘Puff’ if strong enough to overpower the thoughts of a person with intelligence into signing a contract, is not a puff but a contractual term.

From what we have stated just now, it can be said that ‘Puffery’ and Contract are very much dissimilar, and a puff is something that has no legality whatsoever. Puffery was defined as the various comments made by an employee to exaggerate his products qualities, as stated in the case of REA Group Limited v Fairfax Media Limited. It is expected of a prudent individual to catch a puff rather easily.

In the case of Harling v Eddy, it was judged by the court that exaggerated word that were not known by the buyer beforehand will automatically become terms of contract.

The court had ruled that objective intentions are the only ones needed to tie parties in a contractual agreement, not the subjective intentions, in the case of Esso Petroleum v Mardon. Test of objectives is a test of prudency.

The case of Poussard v Spiers, divided contractual terms into three types:

  1. Conditions
  2. Warranties
  3. Intermediate Terms    

The case made sure that such terms are enjoyed by the parties bound in the contract.

The case of L’Estrange v Graucob made it very clear that it won’t be called a fraud or misrepresentation if a person is not aware of an exclusion clause. The clause will become a contractual term.

The subject matter of the sales and also how the parties conduct with each other before the contract of a sale is made often develop into contractual terms, says the Section 8 of the Goods Act 1958.

Section 19 of the Goods Act, 1958 also states that only the specific features and purposes of the product in question should be enough to intimate a consumer into purchasing it. Any other information is unnecessary.

Application

By what was discussed above and the case given to us, it is seen that Charlie, in order to purify water for consumption wanted to purchase Clean Aqua, which clearly makes it a contractual term. Since, it was seen that the salesperson had over exaggerated the facts that led to the product’s introduction to the consumer, who in this case is Charlie. It is pretty valid that Charlie is a person with a prudent mind and can think for his own with a sane mentality, so it can be said that the salesperson made a puff in such a way that even Charlie was influenced by his lies and brought the product. This makes the sellers act an act of misrepresentation and can be validly added to all the other contractual terms without much thoughts. It is also concluded that the execution clause in the above case is invalid as the clause was not stated to the consumer clearly or was not disclosed in the first place and hence won’t protect the company EnviroPro Pty Ltd. It is now natural that the company led a breach of contractual terms and has committed fraudulent misrepresentation. Hence, for breaking the Section 8 and section 19 of the Goods Act, 1958, the company will be punished.

It is concluded that the consumer Charlie can file a case against EnviroPro Pty Ltd for breaking the Section 8 and section 19 of the Goods Act, 1958.

Question 2.

Issue

Problem here is to determine whether according to the Australian Consumer Law, the consumer, Charlie, the consumer has a fine case against Clean Aqua Pty Ltd or not.

Rule

In the case, we have reduced our scope of deduction only to Australian Consumer Law(ACL) which falls under the three virtues of the suit of compensation whenever a consumer implies to have had met an accident or had faced damage because of the said product. They are:

  1. Respecting to the contact of sales
  2. Respecting to the negligence of the common law
  3. Respecting to a breach in Australian Consumer Law (ACL).

In our case, the ACL has laid down certain legal warranties against damage.

The liabilities of a producer to a buyer are laid down in the Part 3-2 of ACL, are as follows:

  1. Express Warranties are incompatible with the goods.
  2. When the said products are different that how they were stated.
  3. When goods are not identical to the sample shown.
  4. When goods are of unacceptable quality.
  5. Difference between the product and how they were described.

Hence, it is said that these provisions work on the producer irrespective of the degree of the financial loss suffered, they claim is made when either of the conditions above are made and consumer laws are broken. It can be safely said that the consumer will get their rights with respect to the various warranties stated above according to the Australian Consumer Laws, no matter what.

The manufacturer was held liable for the injuries caused by the damage done to them when the so called ‘shatter-proof’ glass broke causing the consumer to suffer critical injury, in the case of Baxter v Ford Motor Co. It was seen in this case that the consumer was targeted by fraudulent misrepresentation and the puffery in question about the glass being unbreakable, became a contractual term in the agreement set by the parties. The producer had to compensate for the damage.

In the case of Grant v Australian Knitting Mills, it was seen that left over chemicals had led to the consumer suffering from dermatitis after wearing the company’s woolen underwear. The entity was sued and prosecuted.

Application

The current case given clearly shows that the company cannot be blamed for Charlie’s ill-health. In this particular case, though a the salesperson had very directly resorted to puffery and over exaggeration of the facts related to the appliance in question sold by Clean Aqua Pty Ltd. and our consumer did get influenced even after being of a prudent mentality and sound mental health, his puffery cannot be called an act of fraudulent misrepresentation. It was seen that the company had issued a clear notice that the product in question was not to be trusted and wasn’t purifying water properly, so, can be hazardous, but, he purchased it anyway and drank the water sample that was filtered by it. Hence, the said company is not to be blamed in any way and our consumer can in no way attempt to sue it for harming consumer rights or breaking any of the discussed conditions in the above cases.  

Conclusion

Charlie cannot sue Clean Aqua Pty Ltd. and cannot file a good case against it.  

This problem has been solved.


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