Contract Law and the Remedies

Question: Discuss about the Report for Contract Law and the Remedies. Answer: This case study highlights the provisions of contract law and the remedies which needs to be taken when a contract is breached. The given case study is between three persons named as Bill, Jill and Dodgy Pty Ltd. Bill and Jill entered into a contract with Dodgy Pty Ltd for the purchase of a Food Caf. As per the contract Dodgy Pty Ltd states them that the weekly earnings from the caf would be $10,000 and the weekly costs would be $3,000. This means that the contract had stated that weekly profit for both Bill and Jill would be $7,000. But the actual scenario was very different from the contract. Actually the weekly earnings were only $2,000 and the costs were $3,000. This means that the caf was having a weekly loss of $1,000. The difference between the profit from the contract and actual $8,000. This clearly shows that Dodgy Pty Ltd had breached the contract which was signed with Bill and Jill. Now Bill and Jill have the right to take action against the company.(lawhandbook.org.au, 20 16) The terms in a contract are very important because it would either be termed as warranties or conditions. Terms which are considered to be essential for the contract are called as condition and which are nit essential are called as warranties. The condition of the current contract was the weekly payment earned by the caf. Due to this condition Bill and Jill had signed the contract. If this condition was not there then Bill and Jill would not have signed the contract. The same was with the case of Luna Park Case.(smh.com.au, 2016) A contract can either be void or voidable at the option of one of the parties involved. If one of the parties have breached the terms of the contract then the other party has the right to void the contract. Company had made a false statement that caf will earn $10,000 every week. But the actual situation was completely different. So Bill and Jill has the right to void the contract. Both of them need to suffer losses, so they have the right to recover the damage charges from the company. In this case there was a breach of contract and the breach had even cause damage and loss to Bill and Jill. Loss was clearly identified, while signing the contract they expected a profit of $7,000 per week but actually they were incurring losses for $1,000. This means in total they were incurring losses for $8,000 which was same as Hadley v Baxendale and Victoria Laundry v Newman Industries. (lawnix.com, 2016) Both Bill and Jill has the right to claim damage charges from the company since the company had made a false statement in the contract. The false statement made was that the caf would earn $10,000 every week but actually it was just earning $2,000 every week. Bill and Jill suffered losses $1,000 every week. So they will recover these losses from the company as per the Australian Contract Law. 2. Part a) This case highlights about the situations when a company had issued an unsafe product in the market. One of the customers had died after eating the product and so what actions can be taken against the company are discussed in this case. All the relevant laws related to this case study are discussed below in detail. A tort Law is said to be a wrongful act committed by a person against another person who might harm him. If a person has to prove that other person wad harm him then he needs to prove that the said person had owed him a duty. And due to his breach of negligence he had to suffer. Defendant needs to perform his duty with reasonable care, if reasonable care is not taken then it would be considered as breach of duty. Similar situations were there in case of Modbury Triangle Shopping Centre v Anzil. (law.wustl.edu/, 2016) Civil Liability Act 2003 explains the situations when a defendant had breached the duty of care. There are some factors which needs to be considered whenever a duty is breached. The factors are: How serious is the harm to the plaintiff? How much is the probability that harm would occur if care was not taken? How much is social utility involved when the duty was breached? How much burden would have been there to avoid harm? (wiki.qut.edu.au/, 2016) There is one more situation named as Factual Causation. In this scenario plaintiff was affected and harm was cause to him due to the breach of the duty by the defendant. Whenever defendant breaches his duty which causes harm to the plaintiff then it is to be called as Factual Causation. Competition and Consumer Act 2010 states that a consumer is a person who satisfies at least one of the following Involved in the purchase of any transportation. Costs $40,000 or less. Purchases goods for personal or household use. (Australian Government, 2016) As per Section 18 of the Act if any person has made a comment in public which is false or misleading then he comes under this section. A person would be held under misleading conduct if he had made any misleading statements like in the case of Henjo v Collins. Even in the case of Accounting Systems 2000 v CCH some false guaranties and warranties were made but these were not intentional. This test would include that person who is selling their products to the public. (store.lexisnexis.com.au, 2016) Section 54 of the Consumer Protection Act states that the goods which are introduced in the marker must be safe and free from defects. The goods should not be available in the market if the customers knows that the goods are not free from defects.(saflii.org, 2016) As per Section 60 of the Act guarantee must be provided in relation to goods and services. The services which are performed in public must be delivered with reasonable skill and care and should also be delivered within a reasonable period of time. As per Part 3 and 5 manufacturers and importers would be considered liable for any loss, injury or damage if the product produced but them have a defect. Part b) In this answer we need to conclude that who has the authority to take action against the company and what remedies would be available. The main problem with the company was that it was using his own car to deliver pizzas. The pizza was delivered by his son and they have named that car service as UberPizzaDelivery. This means they have stolen the name from other company which was not correct. When they had advertised about their pizza that have stated that only fresh ingredients of the cheese are used in it which are taken straight from the farm. But actually they were using a substitute old and out of date cheese in his pizzas. Due to this a customer got very sick from the stale and then he died. Whenever a company is issuing a product in market then it has to ensure that it is safe. Customer are trusting the company and buying their product but if in return company is selling a product which is unsafe then it is not fair for the customers. In this case while eating pizza a customer has even died. This was intentional by the company to use an old outdated cheese. All the customers and even the family members of the customer who had died has the right to take action against the company. The government would take action against the company because it has violated the provisions mentioned in Consumer and Competition Act. Actions which needs to be taken against him was to be taken by the family of the died customer and even the general public. He had made a product which was unsafe for the public. If action is taken against them then as per Civil and Criminal breaches of ACL Hugh would be entitle to pay fine up to $1.1 Million for companies and $220,000 for individuals. Here Hugh is an individual so he would be entitled to pay penalty for an amount of $220,000. After the payment of this fine by Hugh then as per Section 223 of the ACL a public warning notice must be issued against the company. Notice should clearly state that the Hughs pizza is very harmful for the public so it is better to please avoid the pizza. Consumers can easily take action against him in small claims Tribunals or special divisions of the lower courts. They main aim is to offer dispute resolution which is generally quick, inexpensive fair and less formal. The claim which is made by the consumers should also be under the monetary limit of the given law. Hence company has to pay compensation to the family members who had died and product of such pizzas should be immediately stopped. Government also has the right to ban the company from producing any product. Bibliography Anon., 2016. [Online] Available at: https://www.lawnix.com/cases/hadley-baxendale.html [Accessed 10th September 2016]. Australian Government, 2016. Competition and Consumer Act 2010. [Online] Available at: https://www.legislation.gov.au/Details/C2011C00003 [Accessed 9th September 2016]. law.wustl.edu/, 2016. NEGLIGENCE. [Online] Available at: https://law.wustl.edu/sba/firstyearoutlines/torts/Unknown/TORTS_OUTLINE.pdf [Accessed 10th September 2016]. lawhandbook.org.au, 2016. Elements of a contract. [Online] Available at: https://www.google.co.in/#q=elements+of+a+contract+australia [Accessed 10th September 2016]. lawnix.com, 2016. Hadley v. Baxendale Case Brief Summary. [Online] Available at: https://www.lawnix.com/cases/hadley-baxendale.html [Accessed 10th September 2016]. NSW, 2016. AUSTRALIAN CONSUMER LAW AND FAIR TRADING ACT 2012. 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