The issue in the present case is whether there was a valid contract between Magda and Avinash and if they were bound by contractual obligations.
For a contract to be binding, it is first important to know if there was a valid contract in place to deem it valid and enforceable. To constitute a valid contract it is important to consider the essential elements of a contract. The essential elements of a valid contract are that there needs to be an offer made by one party which has to be subsequently accepted by the other party. The offer and acceptance of the promise will constitute a valid agreement. A legally enforceable valid agreement is called a contract in the eyes of law. The contract will then give rights and obligation to the parties in contract. For a contract to be valid, it is essential to fix a consideration which has to be paid by one party to the other to ensure that the contract becomes valid and enforceable in law. It is one of the most important elements of a valid contract. Consideration can be paid at the moment when the contract is entered into between the parties or in the future. When a party is entering into a contract it is important to establish that there is an intention of the party to be bound by the terms of the contract. Therefore, it is mandatory that the parties have an intention to enter into the contract. The contract has to be legal in the eyes of law and shall not include anything unlawful or illegal in its terms. Unlawful contracts cannot be enforced by law. Carlill v Carbolic Smoke Ball co [1893] 1 QB held that parties need to have an intention to be bound by the terms of the contract. Similarly in the case of Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401 held that there is a difference between an acceptance of offer and an invitation to offer. An invitation of an offer cannot be held to be accepted as binding by law. Partridge v Crittenden (1968) 2 All ER held that an advertisement is an invitation to treat and an offer has to be accepted as it was made by the person making the offer. Any changes made in the offer will constitute a counter offer and that cannot be held to be binding on the parties. This was held in the case of Hyde v Wrench (1840) 49 ER 132. The case of Scammell & Nephew v. Ouston [1941] AC 251 held that if any person makes an enquiry, it will not lead to be called an offer.. to constitute a valid offer, it has to be communicated to the other party and he has to be aware of the offer being made to him. This was held in the case of Entorres v Miles Far East [1955] 2 QB 327. The acceptance ahs to be done on time and in cases when the acceptance of the offer is done at a later period, the offer shall be deemed to have expired. This was held in the case of Ramsgate Victoria Hotel v Montefiore.
In the present case, the price of the portrait was advertised by Magda which can be deemed to be an invitation to treat as was held in the case of Partridge v Crittenden (1968) 2 All ER. Subsequently an offer was made. Magda did not accept the offer with all the original requirements and made some additional requirements and made a counter offer by increasing the price of the portrait. Therefore the original offer does not remain valid as was held in Hyde v Wrench. Avinash also said that he needed to consult his wife before he could finalize. The offer came with a time after which it would have extinguished. Avinash again made another counter offer asking for the authenticity and Avinash replied to that counter offer on 20th February within 4 pm which was not accepted by him within that stipulated time. As was held in Ramsgate Victoria Hotel v Montefiore that an offer expired if acceptance is not done at the stipulated time, it will expire.
Conclusion
Therefore, there was no contract entered into between Avinash and Magda.
Which provision of Australian Consumer law has been breached by Magda and what rights subsist with Elton in dealing with the present scenario?
Schedule 2 of the Competition and Consumer Act 2010 deals with the rights of the consumers in relation to goods and services. Section 3 of the ACL states that to be considered a consumer under the Act, the person ahs to purchase any goods or services the amount of which does not exceed 40,000 dollars. According to section 18(2) of the Consumer Law, it is mandated that a trader shall not indulge in misleading practices and shall not deceive the public. Australian Competition and Consumer Commission v Hewlett-Packard Australia Pty Ltd [2013] FCA 653 held that there shall be a fine of 3 million dollars on HP because it was held that HP had indulged in unfair practice and had deceived the consumer. ACL in section 56 states that the goods sold must be similar to the description of the goods made by the seller. The description of the goods needs to be the same as has been shown in the description. Therefore, in cases when it is seen that the goods have substantial difference then it will be held that the seller ahs breached his duties
Elton is a consumer within the definition of the ACL because he has made a purchase of the portrait which did not exceed 40,000 dollars. Therefore, he is a consumer within the definition of section 3 and he shall have the rights and duties of a consumer. He shall therefore be subject to all the rights that the Australian Consumer Law guarantees.
In relation to Magda, it can be claimed that she had made an advertisement in the website which had to be viewed by the customers. The portrait was limited edition and the advertisement was made with the intention of asking others to buy the portrait. The advertisements were false and therefore, Magda had indulged in deceptive trading under section 18 of the ACl.
Whenever a good is sold by description, it is important that it corresponds to the description by which it has been sold. The portrait being limited edition is false as many copies have been sold of the portrait. Therefore, the advertisement of the portrait as being limited edition is false and misleading. Therefore, the portrait was in violation of section 56 of the ACL as it did not correspond to the description.
Conclusion
It can therefore be stated that Elton can claim damages and remedies and therefore has the right to replace and repair the consumer guarantees that he has under the Australian Consumer law and he can claim a refund of 2000 dollar and his consumer rights have been breached. Therefore, it can be held that as the portrait did not match with the description provided on the website, Magda had breached the duties of a seller and therefore is liable to pay damages.
2.An agreement enforceable in law is called a contract and it can be either in express terms or implied terms. An express term of contract is one which has been explicitly mentioned by the parties. Express terms are made in writing or orally whereas implied terms can be understood from the conduct of the parties. Implied terms are mutually agreed between the parties. Wilson v Best Travel defined an express contract. Implied contracts are held to be binding in nature and they also lay down rights and obligations of parties to the contract. the implied terms of the contract are mutually understood between the parties and the Court is invested with the responsibility of finding out of there truly exists a relation between the parties and if the implied contract can be held to constitute a legal contractual relation between the parties.
These are important elements of a valid contract which lay down the acts and obligations of the parties that they are required to carry out under the contract. These conditions are also called stipulations. Once a contract is breached by one party, the other party has the right to rescind the contract or repudiate it. Repudiation of contract takes place when one party cannot perform the contract under the terms of the obligations that mandate the contract. Therefore, it is essential for a party under contract to enact and enforce every part of the contract because if one part of the contract remains unperformed, the other party shall have the right to repudiate the contract. Poussard v Spiers and Pond (1876) 1 QBD 410 case discussed what will constitute a condition under a contract. Therefore it is of utmost importance that the parties to the contract treat the terms of the contract as binding because if the parties do not abide by the conditions, the contract can be repudiated.
Warranty does not have the same value as a consideration because these are treated as minor terms in contract. In cases of breaches of warranty, the other party shall not have the right to rescind or repudiate the contract. Every contract has a purpose or goal they wish to achieve and whenever a warranty is breached, the rights of the parties are not affected, but the long term goals and purposes of the contract are affected.
These contracts can be understood from the conduct of the parties and how they are related to each other help is important in gauging the implied terms. The discretion of treating an implied term of contract to be enforceable or not rests with the Courts because they decide if the implied terms of the contract have the power to give rights and obligations to a party under a contract. The reasonable man test checks if the conduct of the parties was enough to give rise to an obligation to parties. Balmain New Ferry Co Ltd v Robertson held that the trade and the nature of the trade which the parties are participating in is important in considering if there exists an implied contract or not. British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd [1974] 2 WLR 856 held that the trades are important for giving rise to an implied contract in the court shall look at the nature of the trade between the parties. Consumer guarantees are given to consumers and when the consumer breaches those guarantees, the consumer shall be held to be in breach of his duties. The nature of the trade is an important factor in laying down the relation between the parties.
Applying the above held rules to the fact scenario, it can be held that Elton ahd purchased that portrait from Magda and it was conveyed to Elton that the portrait was limited edition. That was a lie because the portrait was not limited edition and the portrait was done on low quality paper. Applying the laws to the case, it can be held that there has been a breach of consumer relation and his rights under the consumer laws have been breached. The consumer guarantees are implied terms in the contract and these ensure that there is a relation between the consumer and the trader of the business. The portrait failed to comply with the legislation mandates as according to section 56 of the Australian Consumer Law, the portrait did not quality the tests. The portrait was supposed to match with the description in the advertisement but the portrait failed to match up to the descriptio
References
Australian Competition and Consumer Commission v Hewlett-Packard Australia Pty Ltd [2013] FCA 653
Balmain New Ferry Co Ltd v Robertson
British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd [1974] 2 WLR 856
Carlill v Carbolic Smoke Ball co [1893] 1 QB
Competition and Consumer Act 2010
Entorres v Miles Far East [1955] 2 QB 327
Hyde v Wrench (1840) 49 ER 132
Partridge v Crittenden (1968) 2 All ER
Partridge v Crittenden (1968) 2 All ER
Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401
Poussard v Spiers and Pond (1876) 1 QBD 410
Scammell & Nephew v. Ouston [1941] AC 251
Wilson v Best Travel
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