Commercial Law - Case Study Example

Commercial Law Student’s Name: Institution’s Name: Instructor’s Name: Course Code: Submission Date: Introduction The case between Nathan and Dubious Connections Pty Ltd is to try and establish if there was a contract between the two. This is with regard to the sale of the Phone, iOS7.1. This is after there was an agreement between Nathan and John, a Dubious Connections Pty, Ltd. Nathan is a sales representative of the Company and in whatever, his deeds are, they bind the company and the consumer of its products. Now, the problem emerges when Nathan realizes that there are some extra monthly expenses on top of the agreed price of $3120 which is supposed after having into the so called contract as will be determined later. Having realized that, Nathan decided to terminate the contract and return the phone. Given the circumstances under which this sale was closed between Nathan and John, the question one can ask, is if there was any valid contract between Nathan and the company John was representing and if that is the case, what are the possible remedies. In so doing that therefore, this analysis will cover on various areas which are related to contract formation to help determine its validity. The areas to be covered in the analysis include: the contract formation process and the nature of contract and law that supports it. Contract formation First and foremost, for a contract to take place there must be both an offer and acceptance. These are concepts built on the case of agreement and that in which the involved parties must all agree to (Allen, 1987). This is what has helped the court to invoke the practice of individualistic consenting in a contract. In other words, the court is concerned with what the two parties agrees to. However, what appears to be of controversial to the case at hand, is the case of Nathan and Dubious Connections Pty Ltd, is the case of Tamplin and James (1880), where the court held that, if two parties entered into a contract, it is the responsibility of each party to do search and ascertain the validity of information provided by the other party. If this case will be applied as reference, then for sure Nathan stands no chance of getting any remedies in this case. This is because he did take any step to inquire more about the information that John had provided and about the company. However, the remedy that Nathan will have to substantiate his contract formation is the Sale of Goods Act 1895 and the Consumer Act 2010 as will be seen later. The two Acts clearly outlines the role of each party when it comes to entering a contract involving the sale of a consumer product. These two Acts will be referred to later on, in order to try and establish Nathan’s chances in this case. In essence therefore, what this part of the analysis is confirming, is that both an offer and acceptance must be present if the contract is to be valid as shown in the case of New Zealand Shipping Co. Ltd. v Satterthwaite & Co Ltd (The Eurymedon) [1975] AC 154 Privy Council. In such case, the English Court held that since there was an offer and acceptance, no matter what other circumstances, the contract existed between the two. The implication of this case reference to the case at hand is that there was an agreement between the two, Nathan and Dubious Connections Pty Ltd, who was represented by John. This is because the two agreed based on the information available at the moment. This is despite the fact that Nathan did not undertake any further step to inquire about the company and the offer John was making. Strengths of Nathan’s case and the supporting Acts Capacity to enter into contract, misrepresentation and fraudulent misrepresentation Apart from the offer and acceptance, the contract will only become valid if the parties entering into it have the capacity to do so (AHRC 2014). This could be a major consideration for Nathan before deciding to take this case to court. Being a refugee in Australia, Nathan must first of all understand what his rights are in regard to entering into contracts. The government of Australia has the obligation like any other member states of United Nations to protect and uphold the rights of the refugees in its land as provided for in International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Convention Against Torture and Other Cruel (CAT) and Inhuman or Degrading Treatment or Punishment (CRC). However, this only happens if the refugee is recognized and registered in the refugees’ records. With the refugee visa, it is a confirmatory that the Nathan is protected by the Australian government and has a right to enter into any contract as long as he meets other necessary requirements such as age and sound mind (Allen, 1987). This is because he can apply for protection from the government of Australia from any form of abuse. According to the contract law of Australia, a person can only fail to enter into contract if suspected of found to be in possession of the following: mental disorder, intoxication, bankruptcy, and crown, minor and companies. The application of these different types of elements to capacity is clearly demonstrated in the cases of Gibbons v Wright, Blomley V RYAN (1954) 99 CLR 362 and Nash V INMAN (1908) 2 KB 1. Having established this and determined the capacity of Nathan to entering into a contract, there is also reason to determine under the existing laws if the facts given by both parties were right (AHRC 2014). This is because for one to enter into a valid contract all facts surrounding the offer, acceptance, consideration and other requirements must be made clear as shown in the case of Bisset v Wilkinson [1927] AC 177 and Esso Petroleum v Mardon [1976] QB 801. However, with the case of Nathan and Dubious Connections Pty, Ltd, the case could be considered in the context of misrepresentation and fraudulent misrepresentation. To start with, during the contract formation John misrepresented facts and fraudulent way. This is because even if John who was acting as an agent of Dubious Connections Pty, Ltd new the status of Nathan, he went ahead to hide some facts about the offer and more especially about the additional expenses. It is after the additional expenses that Nathan started questioning the facts that John gave during the contract formation. Because of this reason therefore, Nathan could use the two example cases given to argue that this contract was valid as per the information that was provided and that John was liable for any damages for not giving correct information during the contract formation. Sale of goods, contract of sales of goods, sale or agreement to sell In addition to the fact that John had misrepresented facts and had lied to Nathan, he could also be sued for not complying with the Sale of Goods Act 1895 which clearly outlines the responsibility of each part when entering into a contract involving the sale of goods. The contract of sale existed because in this case there was a transfer of goods for a consideration, money (Sale of Goods Act 1895). This means that the two agreed and both acted on the information that each party gave. Based on the Sales of Goods Act, Nathan could argue that by the fact that he was the phone to use, as he continues to pay clearly indicates that were some agreements the two were working and which amounts to a contract between the two. This means that there was a contract of sales between the two, Nathan and Dubious Connections Pty Ltd. In reference to the Consumer and Protection Act 2010, Nathan could also argue that John was not honest and was not sincere during the contract formation. This is because he did not care to take into account the rights of the consumer and inform him accordingly. Consumer protection The concept of consumer protection is clearly presented in the Competition and Consumer Act 2010. Even though this Act was passed in 2010, it was fully put into use in 2011. This law is important in outlining the national regime with regard to consumer protection when it comes to sales and other related contracts of consumer goods (Australian Government 2010). This law defines the consumer as any person who has acquired a product whose values is not exceeding $40,000. Important to note, is that the person who has acquired the product remains to be a consumer as long as he is not making the purchase for resale. One important aspect about this law and that Nathan to use as a ploy to show that John and the company he was representing were liable for the emerging issues are about deceiving and misleading (Law Handbook, 2014). This goes back to refer on the process of entering into a contract and information presentation. If Nathan relied on the contract formation based on the information available, then he is most likely to lose this case. This is because he did not do his rightful responsibility to find more about the information. However, with the extension of the same to refer to the Competition and Consumer Act 2010, Nathan stands a chance of getting a remedy from the same. This is because the Act maintains that in trade or commerce no single person is allowed no matter the circumstances to conduct himself in a way that is either misleading deceiving or likely to deceive. This is because the deceived person is likely to make a wrong decision for lacking the required information. This could be very explained in the case of Google INC V ACCC (2013) HCA 1. In this case the court held that misrepresentations in the internet were the work of the users of the internet who used Google to represent the information and that Google was not responsible. In this kind of situation therefore, it is clear that misleading and misguiding are not allowed in any form of business in Australia. As a matter of fact, the Competition and Consumer Act 2010, has been very instrumental in helping the consumers to execute their cases following deception from the sellers. The Act is very strict on misleading and deceiving. For instance, the Act is very reserved that liability is a must and that there is no need to show prove or the intention of misleading and deceiving (Mark and Associates, 2011). According to this Act, the consumer that has been offended not need to suffer a loss, what is required is the indication that one was misleading and deceiving. Now, having learned from the case that John who was an agent of Dubious Connections Pty Ltd, had misled and deceived Nathan on some facts and more especially on the issue of addition expenses, he could sue the company for any damages that might have accrued or stopping the company from forcing him to pay the full amount of the contract. In general therefore, despite the fact that Nathan did not participate fully in the contract formation by doing more search on the information that John gave, he has defense founded on two main laws. The first law is about giving misleading and deceiving information during contract formation and the other one, is about the consumer protection and his rights. In either case, the company broke the law through its agent in misleading Nathan to enter into this contract. This therefore qualifies Nathan to a serious plaintiff with some remedies attached. Damages and remedies Given the circumstances of the case, Nathan stands a chance to gain from the case in two different ways. First, Nathan can claim for damages incurred in terms of additional expenses that were incurred in the first two months and two, a court injunction that bars Dubious Connections Pty Ltd from forcing him to pay the full price of the phone after terminating the contract. An important reference to these remedies can be made from the case of Google INC V ACCC (2013) HCA 1 already highlighted. In this case, it was held that despite the fact the users of Google had misled and deceived the public, Google was not responsible and that it was the users who had made the representations that should be prosecuted. This clearly shows how important the idea of misleading and deceiving is both in contract formation and consumer protection. Conclusion This analysis as highlighted earlier was to explore and interpret the case involving Nathan and John, a sales representative of Dubious Connections Pty Ltd. The case involved the sale of a phone with a monthly payment. The challenge facing the contract was giving misleading and deceiving information by John. After exploring different law cases and available laws, it is important to point out that the contract existed between the two, however, under the information that was given by the two parties. However, since John was aware of the circumstances that were facing Nathan and failed to support him to understand but took full advantage of them, the Company is liable and the Nathan is entitled to some damage and remedies. References AHRC 2014, Asylum seekers and refugees guide, accessed on May 27th 2014, available online: https://www.humanrights.gov.au/asylum-seekers-and-refugees-guide#rights Allen, D. 1987, Law of Contract in Australia, CCH Australia Ltd; Sydney and Melbourne. Australian Government 2010, Competition and Consumer Act 2010, accessed on May 29th 2014, available online: http://www.comlaw.gov.au/Details/C2011C00003/ Law Handbook 2014, Consumer Protection Legislation, accessed on May 28th 2014, available online: http://www.lawhandbook.org.au/handbook/ch12s03.php Mark T. and Associates, 2011, The trade practices Act becomes the competition and consumer Act, accessed on May 28th 2014, available online: http://marktreherne.com/images/TPAbecomesCCA.pdf Sale of Goods Act 1895, An Act for codifying the law relating to the sale of goods, Version 12, South Australia. Read More