BULAW5914 Commercial Law Assignment Sample

BULAW5914 Commercial Law

Question 1:

Jim owns and operates a garden shop and landscaping business. In January 2023, he manages to procure a large number of old railway sleepers. These sleepers are highly coveted by many gardeners for use as decorative retaining walls, borders, and garden steps. As part of a marketing plan intending to increase customer loyalty, Jim sends a pamphlet to his regular customers telling them a special price for the sleepers.

Special Offer!

Top quality railway sleepers for sale. Ideal for retaining walls, borders, and garden steps. Special price of $100 for 5, while stocks last.

The weather, however, stays very mild for the time of year and Jim’s landscaping business sales soar. By March sales are still high. Sam negotiates with his supplier for another load of sleepers. Due to high demand, these sleepers are more expensive.

Jim must sell them for $100 for 3 to make the same profit. Jim does not send out a pamphlet this time; instead, he places a sign on the sleepers in his yard that tells of the new price.

Prabal and Sonia, a newlywed couple have been saving up for landscaping their garden. They intend to enter a contest for the TV show “Home and Garden”. They relied for their budget on Jim’s pamphlet. When they arrive at Jim’s yard and find a sign for the new price of the sleepers they are upset. The price would not allow them to finish their project in time for the contest. Prabal and Sonia show their pamphlet to Jim and demand the sleepers at a lower price, that is, $100 for 5.

Required: Relying on your knowledge of the law of contract, advise Jim as to whether he is bound by the lower price. Refer to relevant case laws, if any, in support of your answer. You do not need to consider Australian Consumer Law to form your advice.

Question 2:

Mike had longed to buy a new car for some years. Unfortunately, his job as a sanitation engineer did not pay very well at all, and he was unable to afford anything more than a bicycle. However, after months of saving he had saved enough to buy a small, second-hand car. The moment he,drove out of the car yard, Mike was the proudest of all proud car owners. He was, perhaps, a little too proud. His belief in his driving skills was misplaced.

As he came to the intersection of a major highway. Mike indicated, checked his rear-view mirror, but completely forgot to slow down. Ten metres from the intersection he remembered, and applied his brakes with great force. The car spun out of control and collided with an electricity pole.

Jenny who was waiting for her bus near the electricity pole suffered minor injuries in the accident. Mike was slightly hurt but had been wearing a seat belt which had prevented serious injury.

The collision with the electricity pole cut the electricity to several suburbs, with consequent inconvenience and some expense. In particular, the Fancy Shoes factory had to shut down its operations. The shutdown lasted for two days; on the first day, the factory was without electricity. On the second day, electricity was restored, but the manager decided to take the opportunity to carry out some urgent maintenance work.

Required: Discuss the Common law legal position of Jenny and Fancy Shoes in an action of negligence against Mike.

Solution

Question 1

Issue

The matter under consideration pertains to the legal obligation of Jim to honour his commitment of providing railway sleepers to Prabal and Sonia at the agreed price of one hundred dollars for a bundle of five. The current deliberation pertains to whether Jim is permitted to vend the sleepers at the revised price of one hundred dollars for a set of three.

Rule

In order for the field of contract law to be regarded legitimate, it is necessary for individuals to adhere to the conditions of a legally binding agreement to which they have willingly agreed. This is the cornerstone of legal contracts. There must be four elements present in order to make a contract: an offer, an acceptance, consideration, and the purpose to create legal relations. An offer, an acceptance, and the purpose to create legal relations are the three necessary ingredients. An offer is a manifestation of an offeror's willingness to enter into a contract on defined conditions, and acceptance is an unqualified affirmation of the offeror's offer and its terms. When one side makes an offer, they are signalling their willingness to embark into negotiations leading to a legally binding agreement.

It is widely acknowledged that under contract law, advertising is more appropriately seen as an invitation to treat than as an offer. We call a request for another party to make an offer a "invitation to treat." The party that offered the invitation is under no obligation to accept the counteroffer. In certain situations, an advertising might be seen as an offer. However, this presupposes that the advertisement is clear, and accurate, and does not call for any more discussion. In the case of Carlill v. Carbolic Smoke Ball Co. [1892], a legal precedent was established that serves as an example of advertising that was considered to be in the nature of an offer .

When a party accepts an offer, all of the other parties involved are put under a legal obligation to abide by the terms and conditions that are described in the contractual agreement. There may be either stated or inferred terms in a contract. The parties to a contract are said to have expressly agreed to the terms of the contract when such terms are included in the document. On the other hand, implied terms are not expressly specified but are presumed to be a part of the contract based on legal operation, customary practises, or trade use. These may all be considered to be examples of inferred terms.

Application

In this particular scenario, Jim sent out brochures to his already established customers in which he offered a discounted pricing of one hundred dollars for a set of five railway sleepers. Because the promotional material in question also functions as an advertisement, it is generally understood to be an invitation to treat rather than an offer. This is because advertising is its primary function. The advertising might be considered an offer as long as it is clear, specific, and does not involve any more discussion on the part of the prospective buyer.

The defendant in the case that was brought before the court in Partridge v. Crittenden [1968] advertised bramble-finch for sale. According to the advertising, both male and female Bramblefinch birds may be purchased for the price of 25 shillings for each individual bird. Due to the absence of a crystal clear and unwavering promise to sell the avian creatures at the specified price, the judicial body came to the conclusion that the promotional material did not qualify as a binding proposal but rather as a request for bids. This was due to the fact that the document did not provide a price for the avian creatures.

In the given instance, the message that was received from Jim may more accurately be described as an invitation to treat rather than an offer. This is because it does not establish a clear and absolute promise to sell the product at the set price. The reason for this is because of the previous sentence. As a consequence of this, Jim is not required to sell the sleepers to Prabal and Sonia at the advertised price of one hundred dollars for a set of five beds.

In spite of this, in the event for MBA assignment expert that the booklet was determined to be an offer, Jim would not be required to sell the sleepers at the price that was specified if he had withdrawn the offer before it was accepted. This would be the case even in the event that the pamphlet was determined to be an offer. It is possible to withdraw an offer prior to the offer being accepted by communicating the withdrawal to the offeree. This may be done if the offer is still open for acceptance. The case of Dickinson v. Dodds [1876] provides an example of a situation in which an offer was withdrawn prior to it being accepted. This legal precedent was written in the year 1876.

In the present situation, Jim chose not to back out of the idea before Prabal and Sonia made their decision to accept it. Jim said that the price of a set of three sleepers would now be reduced to $100, but he decided against distributing any promotional paper on this particular occasion. It is possible to classify Jim's garden sign as an invitation to treat since it does not make a specific and unqualified promise to sell the sleepers at a price that has been established beforehand.

Despite the fact that the pamphlet is considered to be an offer, it is possible that the effectiveness of Prabal and Sonia's reliance on the pamphlet as a means to establish a legally binding contract may be regarded as insufficient. In some circumstances, if a promise is made without the aim of creating legal duties, but the receiver of the promise has acted upon it to their detriment, the legal concept of promissory estoppel may be utilised as a means of resolving the conflict between the parties involved. The legal principle known as promissory estoppel was used in the instance of Waltons Stores Ltd. v. Maher [1988] .

The fact that Prabal and Sonia relied on the booklet that Jim had given them led to an unfavourable consequence since their budgeting for the landscaping project was based on the fact that it would cost $100 for a set of five sleepers, which turned out to be far more than the stated price. It is required for the promisor to have made a clear and unmistakable promise to the promisee in order for the legal principle of promissory estoppel to be applied. The pamphlet in issue is not a clear and unequivocal pledge; rather, it is an invitation to begin conversations with the other party. As a result, there is a chance that the legal principle of promissory estoppel does not apply to the situation that we are looking at right now.

Conclusion

In conclusion, it is possible to draw the conclusion that Jim is not required to sell the railway sleepers to Prabal and Sonia at the stated price of one hundred dollars for a set of five sleepers. Assuming that the brochure represented an offer that was legally binding, Jim has the right to sell the sleepers at the new price of $100 for a set of three since he did not revoke the offer prior to it being accepted. As the pamphlet does not contain a clear and unambiguous commitment, the dependence of Prabal and Sonia on the pamphlet may not satisfy the necessary requirements for the formation of a legally binding agreement. As a consequence of this, Jim is under no duty under the law to sell the sleepers to Prabal and Sonia at the price that was advertised.

It is of the utmost importance to recognise that the preceding analysis is based on the presumption that the Australian Consumer Law does not apply to the situation at hand. This is because it is vital that this supposition be acknowledged. When it comes to the settlement of this specific legal situation, the possibility of using the Australian Consumer Law might have substantial implications. In the event that the brochure is found to be misleading or deceptive in nature, it is probable that Jim has breached the Australian Consumer Law. As a result, Prabal and Sonia may be eligible for a possible remedy as a result of Jim's actions.

Question 2

Issue

The issue at hand relates to the viability of a negligence claim filed by Jenny and Fancy Shoes against Mike in light of the losses caused by his careless driving and the subsequent accident with an electrical pole. Specifically, the question asks about the likelihood of success for such a claim.

Rule

The failure of one person to sustain a legal responsibility of care owed by that individual to another individual, which ultimately results in damage or injury being inflicted upon the latter, is referred to as the tort of negligence, which is a legal concept found in the common law . It is required for the claimant to show the following constituent components in order to prove negligence. These components are as follows:

● The idea of "duty of care" refers to the fact that the defendant had a legal need to treat the claimant with an appropriate level of caution at all times.

● Because the defendant did not exercise a level of care that was considered to be reasonable, it is considered that they have committed a breach of duty.

● The identification of a causal relationship between the breach committed by the defendant and the loss or harm suffered by the claimant is what is meant by the term "causation."

● It is important to show that the plaintiff has sustained a real loss or harm as a direct result of the defendant's breach of duty in order to prove damages. This is because the breach of duty was committed by the defendant.

It is essential to have a solid understanding of the main components that make up the tort of negligence, which plays an essential role in the legal system in Australia. According to this theory, there is a legal responsibility of care that one person owes to another, and a breach of this obligation may lead to damage or injury being sustained by the one who is on the receiving end of the violation. It is important to establish the presence of four fundamental components in order to raise a charge of carelessness. These components are listed in the following sentence. To begin, it is very necessary that the party that is being charged has a legal responsibility to the party that is being wronged to behave with a level of reasonable care. As a consequence, there is an absolute need to assume that the person that is being charged has breached this commitment by failing to employ reasonable precaution. The causal relationship between the defendant's breach of duty and the loss or injury received by the plaintiff is the third component that must be shown in a legal case in order to be successful. In the end, it is essential that the claimant has sustained proven damage or injury as a consequence of the violation of their legal responsibility by the defendant. If any of these factors cannot be shown, then the claimant's contention that there was carelessness on the part of the defendant cannot be upheld. As a consequence of this, it is essential to investigate each of these aspects within the context of the specific case in order to determine whether or not the plaintiff has a valid cause of action for negligence against the respondent.

The Civil Liability Act 2002 (NSW), which has codified the common law concepts of tort, is the primary statute that determines how the law of negligence is applied in Australia. The requirement of a person to perform a duty of care is laid forth in the fifth subsection of the Act. This duty of care comprises the need to exercise caution in order to avoid possible damage to others that may have been expected. When determining the appropriate level of medical care for a patient, each of the factors outlined in Section 5C must be taken into consideration. These factors consist of the likelihood of harm occurring, the severity of the damage that may occur, as well as the practicability and cost of putting preventative measures into place.

Application

Due to the nature of the situation, Mike was compelled to drive with a reasonable degree of care and competence, and as a result, he was responsible for ensuring Jenny's safety along with the safety of any other persons who could have been on the road. A breach of the individual's responsibilities has occurred since they were unable to slow down while approaching the junction, despite the fact that they had signalled and double-checked their rear-view mirror. In order to lessen the severity of the damage that may have been caused by colliding with the utility pole, a cautious driver operating a car would have applied the brakes earlier on in the event that they were going to try to avoid the accident. As a result, it is possible to draw the conclusion that the prerequisite for a breach of duty has been met.

Jenny was waiting for her bus in close proximity to an electrical pole when she was involved in a collision with the pole, which left her with injuries and caused damage to the surrounding environment. The incident occurred while Jenny was waiting for her bus. This statement satisfies the standards of the legal concept of carelessness, including its requirements pertaining to the causation and damages components. Mike's careless driving was directly responsible for the crash that Jenny was involved in, which left her with some minor injuries. The incident ultimately resulted in the disruption of the electricity supply to numerous areas, which included the production facility for Fancy Shoes. As a result, the business experienced both an inconvenience and a financial loss as a result of the disruption.

Causation law addresses the question of whether or not Mike's breach of duty was responsible for the losses experienced by Fancy Shoes, which comes within the jurisdiction of this area of law. In the legal system of Australia, the test for determining legal causation is often referred to as the "but for" test. Under this criterion, there must be an investigation into whether or not the loss would have been incurred even if the defendant had not breached their obligation. It is possible to make the case that the loss of revenue that was experienced by the Fancy Shoes firm would not have occurred if it were not for Mike's accident with the power pole. As a direct consequence of this, the breach of duty that Mike committed is considered to be a legal cause of the losses that Fancy Shoes incurred.

The concept of a duty of care in the context of negligence originated in the Australian case law of Donoghue v. Stevenson [1932]. This occurred after Mike's careless driving caused Jenny physical and material harm. The court's ruling in this case recognised that manufacturers had a duty of care to the consumers who ultimately purchase their products. This idea has been broadened to include broader contexts in which a duty of care may be required. One example is when drivers have a responsibility to exercise caution around other motorists. The High Court of Australia ruled in Wyong Shire Council v. Shirt [1980] that a duty of care may arise where there is a substantial risk that another person would be injured.

In cases involving causality, the "but for" test is employed to determine legal causation. This test was created as a legal precedent by the Australian case of March v. Stramare Pty Ltd [1991] , which took place in 1991. In order for a claim to be successful, it is required to demonstrate that the damage or impairment that was suffered by the plaintiff would not have occurred if the defendant had not violated their legal responsibility. The idea of causality was brought up in conversation when discussing the manufacturing facility that makes Fancy Shoes' recent struggle to meet its financial obligations. It is possible to argue that the loss would not have occurred if Mike had not collided with the electricity pole.

The issue of contributory negligence may come up, as shown by the legal precedent in Podrebersek v. Australian Iron & Steel Pty Ltd [1985] in Australia. Podrebersek v. Australian Iron & Steel Pty Ltd (1985) in Australia. Due to the fact that the claimant was found to have contributed in some way to the injury that was sustained, it was decided that the amount of compensation that they are entitled to receive may be decreased. The fact that Fancy Shoes did not have a backup power source or a contingency plan in place may have been a contributing factor to the loss of income that the company endured. As a result, it is very necessary to assess the level of one's own carelessness, as this factor has the ability to influence the total amount of compensation awarded.

Conclusion

Jenny and Fancy Shoes possess a compelling legal argument of negligence against Mike, grounded in his failure to uphold the standard of care owed to them, which ultimately led to the damages incurred as a result of his careless driving. The damages incurred by Fancy Shoes were a direct result of Mike's breach of duty, thereby establishing a proximate cause. Additionally, Jenny's damages were a foreseeable consequence of Mike's conduct. Nevertheless, the matters concerning contributory negligence attributable to Fancy Shoes could potentially diminish the compensatory amount that can be obtained.