Discuss About The Regime Statutory Implied Terms Transactions?
In last few years, Court recognized the concept of entering into contract through e-mails and validity of the E-mail contracts. There are number of cases related to E-mail contracts which are decided by the Court such as Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [1]and Stellard Pty Ltd v North Queensland Fuel Pty Ltd. Both the cases involve the situations in which Court considers the validity of exchanged E-mails between the parties and also whether there is any binding contract or not[2].
Offer- offer can be considered as definite promise which is made by one person to another person. There is no particular form of offer and it can be made either orally or in writing. However, offer can be constituted through the conduct of the parties also. It is not necessary that offer can be made to specific person only it can be made to the world at large.
Acceptance- another important element of contract is acceptance. Acceptance is the statement through which person to whom offer is directed agreeing to the offer. It is necessary that offer is accepted by that person only to whom it is directed. However, after giving acceptance parties are bound by these acceptances and it is not possible for parties to cancel the contract. Acceptance must be given by offeree only in context of offer made by offeror. This can be understood through case law Crown v Clarke, (1927) 40 CLR 227[3].
For effective acceptance, it is necessary that acceptance must be communicated to the offeror. If acceptance is given through E-mail then provisions of Electronic Transaction Act 1999 are applied. Section 14 of the Act states, time of receipt of acceptance is considered as that time when mail related to acceptance send by offeree reach the information system of offeror. It means that offer is accepted by the offeree at the time when mail of acceptance send by offeree enters in the mail box of offeror[4].
It must be noted that, E-mail contract also include these essential elements that are offer, acceptance, consideration, and intention to create legal relations. However, if valid offer and acceptance is present in the E-mail negotiations then it can be considered as valid contract. This can be understood through case law McHugh JA in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd.[9] In this case, McHugh stated even though e-mail negotiations specifically stated that formal contract must be executed then also parties immediately bound with the contract if valid offer and acceptance are present in the contract[10].
Application: in the present case, both Mary and Lianne negotiated through E-mail and all the essential elements of valid contract are present in this case such as offer is given by Mary through advertisement to the world at large. Later, Lianne accept the offer given by Mary through E-mail send by Lianne to Marry.
It must be noted that acceptance is considered as valid acceptance because section 14 of Electronic Transactions Act 1999 states offer is accepted by the offeree at the time when mail of acceptance send by offeree enters in the mail box of offeror. In this case, Mary reads the acceptance mail after 5 hours because of the electricity fault. Therefore, time of receipt of acceptance is the time when E-mail enters in the mailbox of Mary.
It must be noted that consideration of $10000 is present in the case, which can be considered as prima facie evidence of intention of parties to create legal relations.
In Case law Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd[11], court held that parties are bound by the contract related to sale of land which was entered between the parties through E-mail. Contract was binding because valid offer and acceptance is present in the contract.
In this case also, both offer and acceptance are present. Therefore there is valid contract between the parties because it is not possible to cancel the contract after accepting the contract.
Issue: Whether any terms of the contract are breached by the Mary, and if Mary breach the terms of the contract then what rights are available to the Lianne against such breach?
Law: in Australia, consumer law is developed for the purpose of protecting the interest of consumers and also promotes fair dealings with the consumer. Trader who is engaged in the trade or commerce must compile with these guarantees while dealing with the consumers. Guarantees provided by ACL are statutory guarantees and it cannot be excluded by any person[12]. Following are some guarantees which are provided by the ACL to the consumer:
Guarantee related to express warranty- it is the duty of trader to comply with all the express warranties given by trader at the time of formation of contract. This guarantee is stated under section 559 of ACL. As per this section if any warranty is given by supplier and manufacturer that goods and services provided are compile with express warranty then such goods and services must be compile with that express warranty[13].
Guarantee to perform duties with due care and skill- this guarantee is stated under section 60 of the Competition and consumer Act and as per this section trader who supplies goods and services in trade and commerce must fulfill their obligations with due care and skill[14].
Guarantee related to specified purpose- this guarantee is stated under section 61 of the ACL, and as per this guarantee if consumer before entering into contract specifically stated any purpose for which he acquired such goods and services, then it is the duty of trader to ensure that goods and services met with that specific purpose. In other words, trader ensures that result of the services and product meets the desired result of consumer[15].
If trader fails to meet statutory guarantees provided by ACL, then consumer has right to cancel the contract, if services are not consumed then seek refund, and consumer can claim for compensation for breach of statutory guarantees[16].
Application: in this case, Lianne specifically asked for Malaysian cuisine and large space for dancing at the time of entering into contract. Later, Mary fails to provide Malaysian cuisine and also dance floor is very small. In this case, Lianne has right to seek compensation because Mary breach his statutory guarantees stated under section 59, 60, and 61 of the ACL. In this Mary breach express warranties provided to Lianne. This can be understood through case law Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 047[17]. In this case, tribunal stated that money back guarantee can be considered as express warranty.
In this case, Lianne does not receive desired result from the services for which she paid. Therefore, Lianne has right to claim compensation from Mary for breach of consumer guarantees under ACL. However, Lianne cannot terminate the contract because services are already consumed.
Australian consumer law covers all the commercial dealings in the Australia with both private and business consumers. It is necessary for those companies to take reasonable care that are selling and promoting their goods and services through advertising. These organizations accompanied with clients and media operators frame marketing strategies and activities for advertising their goods. Organization must identify their clients and consider provisions of ACL for the purpose of avoiding unconscionable dealing, misleading and deceptive conduct, and any other conduct which is prohibited by ACL.
In other words, ACL protect not only the legitimate interest of the consumers but also ensures fair dealings in Australia, and it is stated under Schedule 2 of Competition and consumer Act 2010[18]. In this paper, provisions stated under ACL related to advertising and selling practices are discussed and it also state the prohibition imposed on business organization by ACL while advertising their goods and services. Lastly, paper is concluded by stating the brief conclusion which summarizes the facts of this paper.
Business organizations use number of modes to publish their advertisement such as radio, television, newspaper, etc. However, online mode of advertising is also the most important mode now days because of the rapidly increase of online environment. Business organizations use this mode for the purpose of promoting and selling their goods.it must be noted that provisions of ACL also applied on online mode, which means those organizations which publish their advertisement through online environment are bound to follow the provisions of ACL related to advertising and selling practice.
Provisions related to advertising and selling practices are stated under chapter 2 and chapter 3 of ACL. These chapters deal with business conduct in commercial matters. In other words, if any commercial transaction provide wrong information to other party then such matter falls under chapter 2 and chapter 3 of ACL. It also states the conduct of business organization while promoting and selling their products through advertising[19].
As stated above, ACL protect the legitimate interest and rights of the consumer. For this purpose ACL introduced section 18[20] and section 29 of the Act for the purpose of prohibiting the organization to engage in any conduct which is misleading and deceptive in nature. Section 18 is considered as the most litigated provision in the ACL, and it is mainly introduced for the purpose of protecting the rights of the consumer. Claim related to section 18 pleaded in all type of jurisdiction and it is also merged with some other type of claim also. This can be understood through example, contravention of section 18 can be considered as tort also. However, it must be noted that if section 18 is brought by the plaintiff then usually party also state that section 29 is also breached. Section 29 states false representation made to consumers for the purpose of misleading and deceives the consumer. Organizations engaged in this conduct through various modes such as by personal communication, through advertisement, etc.[21].
Section 29 of the ACL states, it is completely illegal for business organizations to make any false representation related to goods and services to any other party. This section can be compared with section 18 and after comparison it can be concerned that approach of this section falls in the context of section 18. The main aim of this section is to protect the consumers from those suppliers who engaged in trade and commerce and falsely represent their goods to other parties.
In short, section 18 and 29 restrict such practices of business which mislead and deceive the consumers and result in unfair dealings. It can also be said that these sections protect the consumers and promotes fair dealings with consumers in Australia. Section 18 and 29 also encourage the business to act in good faith and ensures interest of consumers as well.
Case law Australian Competition and Consumer Commission V TPG Internet Pty Ltd[22] helps in understanding the misleading and deceptive conduct related to advertisement and selling practices in Australia. In this case,, TPG published advertisement under which company stated that unlimited internet was given by the company for only $29.99. This scheme was named as ADSL2+ broadband internet plan. In actual company charged hidden cost from their consumers in the following form:
ACCC filed application against the company on the ground that company mislead and deceive their consumers under this new scheme. Application was filed by ACCC in Federal Court in which primary Judge stated that TPG was liable under section 18 and 29 of ACL and ACCC succeeded in their application. After this decision, TPG appeal against this decision in Full Federal Court and succeeded. Later, High court set aside the decision made by Full Federal court on the ground that Full Federal Court failed to apply the principles of PUXU case correctly[23].
References
Chapter 2 and 3 of ACL deals with the advertising and selling practices related to commercial contracts, and ACL also introduced section 18 and 29 for the purpose of prohibiting the misleading and deceptive conduct of business organization. The main aim of these sections is to promote fair dealings in Australia.
BIBLIOGRAPHY
Ready, K. (2015). Email contracts – Who, What, When and Where – The formation of binding agreements through email exchanges, < https://www.mondaq.com/australia/x/431732/Contract+Law/Email+contracts+Who+What+When+and+Where+The+formation+of+binding+agreements+through+email+exchanges>, Accessed on 23rd September 2017.
ACL, Intention, < https://www.australiancontractlaw.com/law/formation-intention.html>, Accessed on 23rd September 2017.
ACL, Consideration, < https://www.australiancontractlaw.com/law/formation-consideration.html>, Accessed on 23rd September 2017.
Mcleod, I. Email correspondence a valid and binding contract, court confirms, < https://www.findlaw.com.au/articles/5751/email-correspondence-a-valid-and-binding-contract-.aspx>, Accessed on 23rd September 2017.
Austlii, Paterson, Jeannie Marie — “The New Consumer Guarantee Law and the Reasons for Replacing the Regime of Statutory Implied Terms in Consumer Transactions” [2011] MelbULawRw 8; (2011) 35(1) Melbourne University Law Review 252, < https://www.austlii.edu.au/au/journals/MelbULawRw/2011/8.html>, accessed on 23rd September 2017.
ACCC, Consumer guarantees, < https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services>, Accessed on 23rd September 2017.
ACL, Consumer guanarntees, https://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-guides_Guarantees_web.pdf, Accessed on 23rd September 2017.
Legal Vision, Advertising and Marketing Series, https://legalvision.com.au/advertising-and-marketing-series-illegal-conduct-in-advertising-and-marketing-under-the-australian-consumer-law/, Accessed on 23rd September 2017.
Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190 (20 December 2012), <https://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html>, accessed on 19th September 2017
[1] VANTAGE SYSTEMS PTY LTD -v- PRIOLO CORPORATION PTY LTD, [2015] WASCA 21; 47 WAR 547.
[2] Ready, K. (2015). Email contracts – Who, What, When and Where – The formation of binding agreements through email exchanges, < https://www.mondaq.com/australia/x/431732/Contract+Law/Email+contracts+Who+What+When+and+Where+The+formation+of+binding+agreements+through+email+exchanges>, Accessed on 23rd September 2017.
[3] Crown v Clarke, (1927) 40 CLR 227.
[4] Electronic Transaction Act 1999- Section 14.
[5] ACL, Intention, < https://www.australiancontractlaw.com/law/formation-intention.html>, Accessed on 23rd September 2017.
[6] Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme Court of New South Wales [1989] 2 NSWLR 309
[7] ACL, Consideration, < https://www.australiancontractlaw.com/law/formation-consideration.html>, Accessed on 23rd September 2017.
[8] Coulls v Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 460.
[9] Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622.
[10] Mcleod, I. Email correspondence a valid and binding contract, court confirms, < https://www.findlaw.com.au/articles/5751/email-correspondence-a-valid-and-binding-contract-.aspx>, Accessed on 23rd September 2017.
[11] Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd [2015] QSC 119 (14/11998).
[12] Austlii, Paterson, Jeannie Marie — “The New Consumer Guarantee Law and the Reasons for Replacing the Regime of Statutory Implied Terms in Consumer Transactions” [2011] MelbULawRw 8; (2011) 35(1) Melbourne University Law Review 252, < https://www.austlii.edu.au/au/journals/MelbULawRw/2011/8.html>, accessed on 23rd September 2017.
[13] Competition and Consumer Act 2010- Schedule 2- Section 59
[14] Competition and Consumer Act 2010- Schedule 2- Section 60.
[15] Competition and Consumer act 2010- Schedule 2- section 61.
[16] ACCC, Consumer guarantees, < https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services>, Accessed on 23rd September 2017.
[17] Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 047.
[18] ACL, Consumer guanarntees, https://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-guides_Guarantees_web.pdf, Accessed on 23rd September 2017.
[19]Legal Vision, Advertising and Marketing Series, https://legalvision.com.au/advertising-and-marketing-series-illegal-conduct-in-advertising-and-marketing-under-the-australian-consumer-law/, Accessed on 23rd September 2017.
[20] Competition and Consumer Act 2010- Schedule 2- Section 18.
[21] Competition and Consumer Act 2010- Schedule 2- Section 29.
[22] Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190 (20 December 2012), <https://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html>, accessed on 19th September 2017.
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