Legal system of any nation reflects the process or procedure which is followed in interpretation and enforcement of law. Through the legal system, the responsibilities and rights are elaborated. Majorly, the legal systems across the globe include common law and statutory law, with some systems including religious laws as well. The pre-legal systems were deemed to have certain defects. These were cured by HLA Hart, when he brought his three part legal system, which covered the rules of recognition, rules of change and rules of adjudication.
The legal system of India is fairly developed legal system, which has both primary rules of obligation and the three part Hart system also applies. As per Hart, the rules of recognition are the foundation of any legal system, as these rules are accepted by officials and private persons and are authorities in identification of primary rule obligation. In the legal system of India, the rules of recognition are presented through the Indian Constitution. The Indian Constitution permits the parallel legal systems to exist as personal laws, where the validity is derived from religious institutions. The Indian Constitution also permits the pre-constitutional laws to continue, including personal laws. In line with the rules of recognition, a hierarchy is set up where Constitution is at the top.
There is an integrated judicial structure in India under the Indian legal system, where the rules of adjudication are upheld, and at the top of this structure, sits the Supreme Court of India. They have been given the authority of interpretation of Constitution as well, along with the High Courts of the State, which come below Supreme Court of India in the hierarchy chart. There is an applicability of precedents under this system. Further, the judgments are given based on general principles, objectives and structure of Indian Constitution. The rules of change also are adopted under this system, as the established law can be amended or changed, and is done so, based on the changed needs. The statutes are even repealed and replaced, to remove the inconsistencies in law or for changing with the changed times, where the old legislations have been proven to be redundant.
The Indian legal system is based on English legal system, and this is also the case for Australia. As a result of this, there is a similarity in how the three part legal system given by HLA Hart applies in India and in Australia. As is the case in India, in Australia also, the Constitution is the key to governing the legal system of the nation. The Constitution of Australia is deemed as the supreme law which was established back in 1901. It presents the doctrine of separation, where the functions are divided into executive, judiciary and legislative, which is also true in case of Indian Constitution. There is a commonality of precedents being adopted. However, unlike India, the High Court of Australia sits at the top of hierarchy in Australia and the other courts come below it. The three part system also applies in Australia in context of rules of change where the laws are amended/ repealed/ changed from time to time, based on changed circumstances.
Other similar points under the two nations adopting the three part Hart system include the differentiation between the primary and secondary law in terms of statutory and common law, classification of laws in different forms like civil and criminal law. There have been cases where the cases of Australia have been used in India and the vice versa is also true, owing to such similarities. More or less, the manner in which the three part legal system applies in India, is applied in Australia as well, where only the nuances like name of courts is changed, but the common theme of having a hierarchy structure, following precedents and given judgments based on established rules, is followed.
In Australia, there are a number of laws which apply on similar situations, and at times where one law denies relief to the party, the other law provides the same. This report is an analysis of the incidents which transpired with Barry and covers the remedies which can be claimed by Barry from Angelo. This would include remedies under both statutory and common law for the first question and common law remedies for the second question.
Whether the statements made by Angelo given in the advertisement and during the discussion phase would make the claim of misrepresentation, under common and statutory law, by Barry successful?
The formation of any contract requires the essential elements of the contract to be present, and this means all the elements, as even the lack of single element would render the contract legally unenforceable. The very first element is an offer being made by first party to second party. There is a difference between invitation to treat and offer. The invitation to treat denotes the negotiations phase of contract, which is not legally binding; whereas an offer is the key term of the contract on which it is based. Generally, the advertisements which are put up in the newspaper are taken to be invitation to treat. This is due to the landmark precedent set out through Partridge v Crittenden. This is however, not the case, where the advert covers a unilateral offer, open to acceptance by mere performance. This is due to the landmark precedent set out through Carlill v Carbolic Smoke Ball Co. For making this differentiation, the wordings of advert has to be analysed.
There are certain factors which can render the formed contract as void or voidable, which are known as vitiating factors, and one of these factors is misrepresentation. Misrepresentation denotes false statement of fact or law being made by D to P for inducing P into the contract. Where misrepresentation is found by the court, the contract becomes voidable at the choice of P. If the contract is not rescinded, damages can be claimed for the loss sustained due to presence of misrepresentation. Bisset v Wilkinson dictates that the false statement made, has to be one of fact or law, and cannot be of an opinion or advice given. Though, D can still be made liable in such cases where A made the statement of advice and was in a position to know the truth behind it as per the precedent set out under Smith v Land & House Property Corp. Where a claim is made regarding misrepresentation, the parties can raise a defence of P checking the validity of statement made by D, resulting in absence of reliance on the statement made by D.
The provisions of misrepresentation are not only set out under common law, but are covered under the Competition and Consumer Act, 2010 as well. Australian Consumer Law, i.e. ACL, provides section 29 where the false and misleading representations, in context of goods and services, are deemed as an offence, and penalty provisions become applicable upon these being present. Australian Competition and Consumer Commission v TPG Internet Pty Ltd is one of such cases where the defendant was made liable by the court for putting in hidden costs in the as against the advertised price, as this was deemed as misleading the consumers regarding the price of product being offered.
The discussed law needs to be carefully applied to the case study, to conclude the chances of claims of Barry being successful against Angelo. There was a newspaper advert here making certain claims. This required certain steps to be fulfilled, for giving acceptance, thereby denying chances of unilateral offer being made, further resulting in non-applicability of Carlill v Carbolic Smoke Ball Co. Here, Partridge v Crittenden would apply making advert as invitation of treat; resulting in the claims made under it, not being upheld as an offer by the court of law.
The claims regarding misrepresentation needs to be applied. Angelo had told Barry that the business expenses were $8,000. Angelo can claim that this was just a statement of opinion based on Bisset v Wilkinson, resulting in his liability extinguishing for higher business expenses. But, Barry can rely on Smith v Land & House Property Corp to show that Angelo was in a position to know the true position. Where Angelo claims that Barry had not relied on his statement made, regarding business being successful, it would not be successful as that is not an issue of contention based on it being a statement made in invitation to treat. As common law does not provide remedy for this claim, Barry can rely on provisions of ACL and claim damages from Angelo for false or misleading representation under the advert and would be successful based on Australian Competition and Consumer Commission v TPG Internet Pty Ltd.
Conclusion
Hence, Barry would be successful in getting the contract rescinded based on misrepresentations of Angelo under common and statutory law.
Whether Barry would be successful in getting the claims of breach of contract where he is not able to get the contract rescinded?
Breach of contract, as the term suggests, is the promise made under the contract not being upheld by D. It becomes obligatory for contracting parties to fulfil all the terms of contract. Where this is not done, P can claim remedies from D, in terms of damages and/or equitable remedies. The theme here is to put P in place where he/she would have been if D had performed the contract properly. Only such damages can be claimed by parties which are a direct and natural result of the breach of contract by D.
Where awarding of damages, in terms of monetary compensation payable by D to P is not enough, equitable remedies are awarded. This includes getting the contract rescinded, allowing P to go back to his/her pre-contractual place. As was mentioned earlier, this remedy is available in cases of misrepresentation being present. P can also claim remedy of repudiation, specific performance and injunction. Repudiation relates to the court allowing P to not perform the contractual obligations and is often awarded in case of anticipatory breach of contract. Specific performs allows the court to ask D to specifically carry out the terms of contract and is awarded majorly in cases of properly related contracts. Lastly, injunction allows the court to stop D from doing something, which is possibly going to put P in an unfavourable position. Where the court deems these as necessary, these remedies are awarded, but only when damages prove to be not good enough award to remedy P.
The discussed law needs to be carefully applied to the case study, to conclude the chances of claims of Barry being successful against Angelo. Regarding the first issue of this case study, the actual turnover came to be way less than the claimed upon turnover in the given advert. However, this would be deemed as a negotiation phase term, which was not included in the drawn contract, resulting in Barry not being able to claim breach of contract for it. Again, there is the same concept applying for the second issue of this case study, relating to no competitor, resulting in Barry not being able to claim breach of contract for it as well. For the fourth issue, the contract was absent on condition of loader. This ambiguity would result in Barry not being able to claim breach of contract for it.
The third issue of the case study which has to be analysed in detail. The contract drawn between Barry and Angelo clearly provided that the sale of business from Angelo to Barry included the loader and the delivery van. Angelo did not inform Barry that the delivery van was on lease and had actually sold it to Barry, along with the business, for a price. This resulted in Barry incurring additional $500 expenses per month for his business, owing to the misrepresentation. This allows Barry to raise claims of misrepresentation against Angelo and get the contract rescinded. As this option is not available under this part, Barry can claim breach of contract against Angelo as he promised under the contract to sell the delivery van to Barry but never did so, for the reasons of not being the actual owner of this van. This would give Barry the option of claiming the amount paid for the van to Angelo as damages, along with the costs for hardships caused to him, in terms of additional expenses. So, Barry can claim damages of $15,000 from Angelo. The reason for this amount being awarded to Barry is for putting him in the position where he would have been without the delivery van being sold to him. This would also allow Barry to pay the additional expenses which he now has to bear for paying lease for the van. There are fewer chances of equitable remedies being awarded to Barry as monetary compensation is enough in this case to put in him the pre-contractual position.
Conclusion
Hence, Barry would be successful in getting Angelo to compensate him for breaching the contract drawn between the two, and also for misrepresentation undertaken by Angelo. However, for the competitor issue, loader issue and turnover issue, no breach of contract can be claimed upon by Barry as these were not the terms of the contract drawn between him and Angelo.
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