Discuss about the Law of Business Advertisement and Marketing.
The fact of the case is that Bill is of 15 years of age and Jill is of 22 years of age. Both are brother and sister in relation. Both of them decided to buy a Sydney cbd café from Dodgy Pty Ltd., the seller. The seller, Dodgy Pty Ltd. in the contract of sale wrongly states that the money which is taken in the business of café weekly is at a level of $ 10,000 and it has been at a constant position from the past 5 years. It has also been stated in the contract that the café should make business of approximately $3000 per week. The contract has also a term saying that the seller, for the preceding 5 years will not run any café business in the Sydney Cbd from July 1, i.e. the day Bill and Jill bought the café. But after running the business for several months, both of them found that the average amount which is coming into the business per week is at $2,000. This amount is less than the amount stated in the contract.
This case is supported by the Contract Act. Any agreement which has an offer and an agreement which has been accepted by both the parties, is said to be a contract (AustralianContractLaw, 2016). To make a valid contract, it is necessary to have a proper consideration. A contract without consideration is not valid. Intention of the parties as well as certainty to get into a legal relation is another essential element for a valid contract. The parties to a valid contract should have the capacity to enter into the contract and perform accordingly (australianContractLaw, 2016).
The agreement made between the seller, Dodgy Pty Ltd. and the buyers, Bill and Jill is a void agreement. An agreement that cannot be enforced by law is said to be a void agreement. This kind of agreement does not have any legal effect. In this contract made between the seller and buyer there is no such consideration mentioned, so this contract is not a valid contract (monash, 2016). The buyer cannot perform the terms mentioned in the contract of taking $3000 per week in the business and it is taking $2000 at an average per week. Therefore, this contract is a void one (Hong, 2015).
The contract made between the buyers and seller is also voidable agreement as this agreement can be set aside by any party if one of the party is injured and does not want to continue the contract if there is any breach of any terms of the contract. As the term mentioned in the contract is misrepresenting the facts, the buyers may put aside the contract (WordPress, 2010).
If the contract is made for sale, there cannot be any fixed time period mentioned in the contract. If so, the contract becomes contract of lease and not for sale. The term in the contract that is mentioning that the seller will not continue any business in Sydney cbd for the next 5 years does not make it a sale. In sale once the property is sold, the seller will not show any interest in the business. And in lease, the term is fixed for a definite period where the property as well as the rights to the property is transferred for certain consideration and condition (ACCC, 2016).
There is no arising if any legal issue both on the part of the seller and on the part of the buyers, as the seller has dishonestly misrepresented the facts in the contract. As there is breach of contract, the contract can be terminated anytime by the buyers.
The fact of this case is Hugh is running a pizza business in the name of Homeslice pizza. For delivering the pizzas around Sydney, he uses UberEats. He was running his business successfully in Sydney with a good amount of profit. He stopped using UberEats and asked his son for delivering the pizzas, in order to cut the costs. Next he decided to use out dated ingredients in making of the pizzas to further reduce the cost. He did this just because of earning more profit. Because of this, many of his customers were becoming ill and one customer amongst them had even died. But he always stated and declared in his advertisement that the ingredients which he used in making the pizzas are completely fresh and the cheese used comes straight away from the farm.
This business which is being done by Hugh is called a sole trade business. The business that is being run and owned by a single or sole person is a sole trade business (Hughes, 2016). In this type of business, there is a single name for the business. No “Ltd”. Or “Pty. Ltd.” is used. The employees of the business are employed by the owner. This business can be established in a very cheap method and has very easy process to get the name of the business registered. Profit to the whole is earned by the owner himself. There is no share of the profit as this type of business is not listed in the stock exchange. If there is any loss to the business, the owner himself is liable for that loss occurred to the business. Financing the company is very hard. The owner is the one who put in the capital. Therefore, the way the company should carry on the business depends completely on the owner of the company (Schweizer, 2016).
A sole trader business requires sufficient marketing and advertisement. This is because to increase the business, there needs to be demand created amongst the general public (Intuiy, 2016). Marketing requires proper skill to advertise the service provided by any business. Marketing follows the principle of 4 P’s, i.e., Product, Promotion, Price and Place (austrade, 2016). Nature and quality of a certain product, proper promotion of the same, proper and reasonable price of the product and the place of availability of the same determines the marketing of the product.
This increases the curiosity of the consumers which increases the demand of the consumers resulting to increasing of the selling of the product. Marketing and advertisement is almost having the same meaning (marketingminds, 2016). Where marketing follows the principle of 4 P’s, advertisement is the message provided to the general public with the help of the media. Where marketing creates only the demand, advertisement creates the goodwill of the company and reduces the cost as it does not include any middlemen. It determines the loyalty of the business and the product towards the consumers (adstandards, 2016).
In this case, Hugh is the owner of the business which is registered under the name of the Homeslice pizzas. He is earning a very good profit and his business was flourishing. This is because the pizza which he is providing is fresh and pocket friendly, as well as the consumers were getting it easily. This easy getting process was liked by all.
This freshness of the pizzas and the availability of the same had increased the goodwill of the sole trade business and also have raised the confidence level of the consumers (fairtrading, 206). To expand the business and increase his profit level, Hugh decided to cut the cost of UberEats which he was using for pizza delivery around Sydney. Being the owner of the business, Hugh can take any decisions which he thinks will give profit to his business. In order to do the same, he started using stale and out of date ingredients and stale cheese in his pizzas, but he continued his marketing as well as advertisement that the pizzas made in his company are having fresh ingredients and cheese which comes straight away from the farm.
This fact of using fresh products was true in the beginning but now by using stale ingredients, he is misleading his customers who as a result are diminishing the reputation and good will of his business. This telling of lies is also hampering the health of his customers due to which they were falling sick and one have even died. This in a way is also making Hugh committing an offence of fraud representation. Therefore, this will lead him to suffer a great loss in his business.
If at any point of time, any customer is not satisfied by the service provided by any trade or business, damages can be claimed by them from the trader or the business owner. It is given in the ACL that if there is any failure on the part of the service provider and also if the goods or service provided is not suitable to the purpose it is supplied, the customers would not have taken the same if it comes to the knowledge of the customers. The customers facing any damage can claim compensation for the damages caused to them. For this, they can write a letter to the business owner at first. In return the business owner may ask them to prove the damage caused to them. If not satisfied by the behavior of the business owners towards the damages, the customers may file a complaint before the Federal Magistrate Court. The court will look into the matter. If the court thinks that the damage has been caused due to the service provided by the business, the court will order the owner to give compensation (consumerlaw, 2016).
With reference to this case, Hugh is the service provider. He is liable of compensating the customers because his action of using stale ingredients in the pizzas has damaged the health of the customers. The customers were falling sick. The customers who have fallen sick can ask Hugh to compensate the damage caused to them. They may provide a notice to Hugh stating tha damage caused to them. They can even take the help of the court if Hugh is not responding to the notice provided to him by the customers. The customers can file a complaint in the Federal Magistrate Court within a period of three years of the damage caused to them. Federal Magistrate Courts are comparatively faster and cheaper than the Federal Courts and give relief to the complainant without much harassment. The court will give an order to Hugh to compensate the customers if found guilty of damaging the health of the customers and also for misleading them.
Reference
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