1. Part A
There are five fundamental elements on which the contract law is based. The elements are mentioned as the offer, consideration, acceptance, capacity of the contract and intention of attaining a legal relationship.
The abovementioned elements must be identified in between the communications that are taking place among the parties so that a contract can be formed before the law. There can be no contract formed if one of these five elements is not found in the contract. Acceptance and offer are those elements that help in meeting the mindset of parties to form a contract. If the parties totally agree to the terms then only a contract can be formed otherwise not. Therefore, these principles of the agreement are totally based on the abovementioned rule.
There must be an offer presented by the party rather than presenting an invitation to offer to create a valid contract. A person who has the reasonable knowledge to present a valid offer must be seen from his intention that he wishes to generate a legal relationship. The above-mentioned principles have been discussed in the case named Lampleigh v Braithwait (1615) by the court. In addition, it has been stated that if a party is making a declaration in the form of the advertisement not considered as the offer until it is an individual offer that has been mentioned in the case of Hartley v Ponsonby (1857). Further, it is held that by declaring an advertisement as an invitation to an offer makes no legal sense and it has been stated in the case of Williams v Roffey (1990) because an individual was not able to fulfil the demands that have been presented in the advertisement for the entire group. It is noted by the advertisement that the facts that have been presented in it are made by a website that is owned by a person known as Magda to sale the paintings. Therefore the advertisement of the painting has been seen as an invitation by the principles of Scotson v Pegg (1861).
Sunday, February 19
Avinash has made an offer by buying the painting that has been priced for $1600. This offer has been made via email by him. It has been stated in the case of Smith v Hughes that if a statement has been made with the intention of binding another party to the terms of the contract and it is legal then this offer is considered to be the valid offer and it has been stated by the court. In the above-mentioned case a valid offer has been made by Avinash.
It is stated that if an offer is rejected by a counter offer then that offer ends and it is mentioned in the case of Hyde v Wrench [1840] EWHC Ch J90. The term counter offer means a statement that has been created against the offer and it is not considered to be as unambiguous. Therefore the offer that has been prepared by Avinash has been rejected by a counter offer as Magda has quoted for the painting’s higher price. Further, a supplementary condition was asked for, by the similar principles by Avinash. Therefore, no valid acceptance was there.
A valid offer has been made by Avinash according to which the painting had to be given to him at the cost of $1800 as the validity of this offer was until 21st February.
Monday, February 20
There was another counter offer that was created by Avinash because he has asked for the authenticity certificate and it has been mentioned in the principles of the case of Hyde v Wrench. This does not seem to be an ordinary inquiry. Magda made an offer and its validity was till 4 p.m. The offer’s validity had been revoked by Magda to 20th February 4 pm from 21st February by letting know Avinash and these things has been presented in the case of Bryne & Co v Leon Van Tien Given & Co [1880] 5 CPD 344. However, it is not accepted by Avinash and it got elapsed because of the time at 4 p.m. on the date of 20th February as per the case of Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109.
Tuesday, February 21
The availability of the offer was not there that needs to be acknowledged and therefore no contract was formed between Avinash and Magda.
Conclusion
As per the above-mentioned information, no contract was present between Avinash and Magda because the acceptance time has been changed by withdrawal to 20th February 4 pm.
Issue
As per the provisions that have been mentioned in Australian Consumer Law that what are the rights that can be carried by Elton that has been created through schedule 2 of the Australian competition and consumer act 2010 (cth).
Rule
An individual shall be considered the consumer of Australia only if that person relates to the provisions that have been mentioned in section 3 of the Australian consumer law. A person can only be considered as an Australian consumer if the price that has been paid to obtain the services and goods must be less than $40,000 and only if the services and goods has been purchased for the household or domestic purpose or if there is any vehicle that has been bought for the transport. The above-mentioned section can only be applied if these purchases are not done for the purpose of production and resupply.
The Section 18 of the Australian consumer law has imposed a responsibility on the supplier by which they do not have the right to commit an act that is in the way of commerce and trade and can be considered as deceptive or misleading or expected to deceive or mislead.
There are certain provisions that have been mentioned in Section 56 of Australian consumer law and they state that the guarantee has been given to consumers. It has also been mentioned that where the sale of a good or service been taken place by a description that seems to be compulsory and those goods exact as mentioned in the description that has been provided to them.
The above-mentioned rules that are related to the act as deceptive and misleading that have been mentioned in the principles of Section 18 of the Australian consumer law and it has been discussed by the case of ACCC v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181. There was no accurate information that has been given in the advertisement and the advertisement has been stated as deceptive and misleading by the court and all these have been stated in the above-mentioned case.
According to the rules of section 260 of Australian consumer law, it has been stated that where the guarantee of the consumer has been breached the party has the right to reject the courts and can ask for a refund.
Application
The facts that have been stated in the case that the painting which was sold by Magda to Elton was not trusted on the paper that was of high quality as it has been stated in the website and therefore, it has the possibility of losing out the colors which have already taken place. This couldn’t have taken place if the Portrait was printed on a good quality paper. As it was promised by the advertisement the portrait that was sold was not at all a limited edition. Therefore this situation states that the requirements of section 18 and 56 have been violated. This happened because it did not match with the description that has been provided and the portrait was not printed on the paper that was of high quality. Therefore, the provision that has been mentioned in Section 56 has been breached. Furthermore, as stated in the website the painting was not at all a limited edition and according to the application of section 18 and of the case of ACCC v Reckitt Benckiser it has been mentioned that this function has been regarded as deceptive or misleading or it is expected to be deceived or mislead. Therefore Magda is responsible under the section 18 and Elton has the right to discard the portrait that has been mentioned under the section 261 of the Australian consumer law.
Conclusion
As Elton is the consumer of Australia he has the right to discard the goods as per the provisions that have been mentioned in section 261 of the Australian consumer law.
With respect to the contract law consideration associated to promise and because of that contact is made among the parties. Every party who is associated with the contract is given a benefit and they also have to suffer a disadvantage. These benefits and disadvantages with respect to the parties to the contract are termed as consideration of the contract. Consideration means “something of a value”.
Certain rules have been provided that makes a consideration valid at law. The rules mentioned indicates that any act that has been made in the past does not consider to be a consideration and they do not have to obey the values that the other party has promised. Therefore the above-mentioned rules indicate that the consideration that is under the contract law may not be valid always and it might also lead to some situations that are not needed for the parties who are in the contract. Certain cases have been mentioned by the court in which these rules have been set up and has been discussed. In the case named Chapel v Nestle [1960] AC 87, a consideration has been found by the court that needs to be valid and not adequate.
Valid consideration is regarded by the small amount that is given with respect to the promise. In the case named Collins v Godfrey (1831) 1B & Ad 950 a prime example has been stated in which the consideration is considered as invalid and cost advantage to the promisee. In the above-mentioned case, it has been said that the police officer cannot claim for money that has been promised as a consideration to him for giving the services of protection. The court stated that it is the duty of the police to protect and it cannot be considered as a valid consideration and there cannot be a contract that can be formed amongst the parties. A duty that already exists is known as the contractual duty and it cannot be regarded as a valid consideration.
There are certain exceptions to the above-mentioned rules and the principles are not stated to be absolute. If a person goes beyond their contractual duty then that consideration will be considered as a valid consideration and it has been stated in the case of Glassbrooke v GCC (1925). If a person who is willing to claim the act that has been done before the contract has been formed as the consideration then he is not permitted to do the same as mentioned in the case named. This rule cannot be applied if this act has been carried as requested by the promisor.
There is another situation in which the promisee gets a disadvantage of the part payment of debts. A situation has come out where an individual has already accepted the part payment as the ultimate settlement but later on has made a claim with respect to the amount remaining and has been successful in it and it has been done in the case named Alliance Bank v Broom (1864).If a consideration is not legal in nature then it is considered to be as invalid.
However, in the above-mentioned situation, the equity principles can sometimes interfere so that it can provide some assistance to the promisee. One of the rules under this principle is named as the doctrine of promissory estoppel in which the promisor might be controlled to get back to his promise as it has been debated in the case named Pao On v Lau Yiu Long (1980). As discussed from the above-mentioned investigation it is seen that several situations are there in which a consideration has been considered to be illegal and has also caused problems to the promisee.
References
ACCC v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181.
Alliance Bank v Broom (1864).
Australian competition and consumer act 2010 (cth).
Bryne & Co v Leon Van Tien Given & Co [1880] 5 CPD 344
Chapel v Nestle [1960] AC 87
Collins v Godfrey (1831) 1B & Ad 950
Glassbrooke v GCC (1925).
Hartley v Ponsonby (1857).
Hyde v Wrench [1840] EWHC Ch J90.
Lampleigh v Braithwait (1615)
Pao On v Lau Yiu Long (1980).
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109.
Scotson v Pegg (1861).
Smith v Hughes (1871) LR 6 QB 597
Williams v Roffey (1990)
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