Competition And Consumer Act 2010, Corporations Act 2001, And Contract Law: A Case Study

Quality Requirements under Section 54 of Competition and Consumer Act 2010

As per the section 54 of the Competition and Consumer Act 2010, the sold by the seller should include the following qualities:

1. The quality of goods should reach the basic level of quality standards.
2. The goods sold to the customers should be free from defects and faults.
3. Such goods must fit as per the requirements of the consumer.
4. The goods shall include all description and the usage of the product.

If any product lacks any of the above qualities than the seller is liable to refund or to pay the cost of repairs of the product (Corones, 2014).

As per the section 181 of the Corporations Act, 2001the following are the duties and obligations of the director and the officer of the company:

1. The officer or the director of the company must follow its duties in good faith.
2. The duties should be done by the officers and the directors of the company by excursing care and due diligence.
3. The officer and the director of the organisation should make a judgement on the basis of the best interest of the company (Corones, 2011). 

Upon breach of the section of such section, the company has the right to penalise the director or officer up to $ 3,40,000 or may serve a 5-year jail sentence under section 1317G of the Corporations Acts 2001

As per from the above case study, it can be observed that the products which have been received are faulty which has also breached section 54 of the Competition and Consumer Act 2010. It shall also be noted that Annie did not work for the best interest of the company as she has received a commission from the supplier regarding the supply of such goods to the company which has breached section 180 of the Corporations Act 2001. The company also has the right to penalise Annie upon the breach of section 1317G of the Corporations Acts 2001.

Nimrod may request the board to make a claim of refund and repairs of the GPS system as the products failed to perform as per the requirements of the company. Annie should accept in front of the board that she has received secret payment from the supplier regarding the supply of goods.

1. Offer: The offer made by the party must be duly and effectively communicated to another party (Christensen, Kent, and Stewart, 2010).
2. Acceptance: The offer received by the party must be duly accepted by the other party.
3. Consideration: The process of contract gets completed when the basic element of contract that is consideration has been duly completed between the parties.
4. Mutual Consent: The contract made between the parties should include the element of mutual consent where the parties to contract provide free consent to enter into the contract.

As per section 18 of the Competition and Consumer Act 2010, a business organisation cannot make false claim regarding the quality and pricing of the product.

Once proved that the false advertisement is made, the court of law may order the person who has made such false claim to pay fines and penalties to the Commonwealth up to $ 210 or imprisonment (McKendrick, 2014).

On the basis of a detailed analysis of the above case study, it can be observed that the advertisement posted by the Kea Stores was incorrect. It can also be noted that the intention behind posting such advertisement was not bad. Apart from that, it shall be observed that the contract was not formed between Blyth and Kea Stores as the process of consideration was missing. It can also be noted that the offer presented by the Kea stores was wrong hence the agreement between the parties shall not be enforced by the court of law.

From the above case study, it is recommended to Kea Stores to settle the dispute with Blyth by apologising to her in the form of some new offers, coupons and discounts of the store.

• The following are the six elements of a valid contract:

Offer: The party who wants to present an offer should duly communicate such offer to the desired party. Such an offer can be made both in oral and in written form.

Acceptance: Upon receiving an offer from the desired party, the acceptance should be given by the party in order to form an agreement between the parties.

Consideration: The process of contract starts when the element of consideration is included in the agreement. After the process of consideration between the parties, the contract becomes enforceable the court of law (Anson et al, 2010).

Capacity: The contract made between the parties should have the capacity to enter into a contract. A contract may become void if any of the parties are not eligible and capable to perform a contract.

Mutual Consent: The parties to the contract should have mutual consent while entering as well as performing the contract.

Legality: The provisions of the contract should not violate any provision of any law.

• A contract under seal is a contract which is written in nature where the contract does not require any consideration to be made between the parties. Such type of contract has the signature of both the parties and a common seal. In other words, it is conclusive evidence which shows that the parties agreed to enter into an agreement on the basis of mutual consent. Whereas, a simple contract is a general contractor which is made between the parties for day to day business where consideration is one of the most important elements of the contract. Such type of contract is generally oral in nature (Bottomley, 2016). 
• As per schedule 2 of the Competition and Consumer Act2010, if the consumer received any faulty products than the consumer has the right to demand the following things:

1. Repairs and replacement of the product which has been sold to the customer.
2. Refund for such faulty and defected product.
3. The consumer has the right to seek compensation for the loss incurred to the consumer (Carter, Harland, and Lindgren, 2016). 

• As per the section 48 of the Competition and Consumer Act2010, the supplier of goods and services instructs to the retailer of the products and services below the prices mentioned in the product and services. The resale price maintenance is illegal because such a method would limit the healthy competition in the market (Chen-Wishart, 2012)

• As per the section 124 of the Corporations Act2001, the following provisions provide a deep analysis of the contractual capacity of the company:
• A company has the capacity to issue, buyback and cancel the shares.
• A company has the capacity to distribute any property to the members of the company.
• A company is authorised to do anything which is under the jurisdiction of laws.
• A company under section 127 of Corporations Act2001 has the right to enter into the contract. The following documents are needed on behalf of the company :
• The document should include the common seal of the company including the signature of two authorised directors or
• Signature of the director and company secretary of the company.
• In case of a proprietary company, the signature of the sole director is required.
• As per the section 126 of Corporations Act2001, the company has the right to vary, ratify or to discharge a person. A person can enter into a contract on behalf of the company by acting as an agent of the company without using the common seal of the company.
• The following are the statutory assumptions which can be made by a person under section 128 and 129 of Corporations Act2001:
• A person can make an assumption regarding the business dealings of the company.
• A person is not entitled to make such false assumptions at the time of the business dealings of the company.
• A person can make assumptions regarding the working of another colleague if he/she is working in a fraudulent manner.

References

Corones, S.G., (2014). Competition law in Australia. Thomson Reuters Australia, Limited.

Corones, S.G., (2011). The Australian consumer law. Thomson Reuters Lawbook Co.

Christensen, J., Kent, P. and Stewart, J., (2010). Corporate governance and company performance in Australia. Australian Accounting Review, 20(4), pp.372-386.

McKendrick, E., (2014). Contract law: text, cases, and materials. Oxford University Press (UK).

Anson, W.R., Beatson, J., Burrows, A.S. and Cartwright, J., (2010). Anson’s law of contract. Oxford University Press.

Carter, J.W., Harland, D.J. and Lindgren, K.E., (2016). Contract law in Australia. Sydney: Butterworths.

Chen-Wishart, M., (2012). Contract law. Oxford University Press.

Bottomley, S., (2016). The constitutional corporation: Rethinking corporate governance. Routledge.