Australian Competition and Consumer Commission Assignment Sample

• Subject Name : Law

Business Laws - Question 1

Issue:-

Legal rights and Obligations of Ryan and MG’s Fitness Solution.

Relevant Law Applicable:-

• Australian Consumer Law.
• Australia common Law.

Applicability of Law:-

 Business Laws defines the right and obligations of the parties who are part go the contract. According to Division 2, Section 51 of the Australian Consumer Law, Consumer means a person or an entity to which goods and services are provided. Hence as per the definition of consumer, Ryan is the consumer in the following case that went to MG’s Fitness Centre to avail the services.[1] As per the facts of the case, Ryan and MG’s Fitness Centre came into an agreement amounting to $450 in order to avail the serviced for 12 months. The Law provides that, it is unlawful for a business to make statements in the course of business that are misleading and which deceives the consumer. If the business also fails to disclose relevant information to the consumer, it can amount to misleading and deceptive. In the case of Australian Competition and Consumer Commission v Reckitt Benckiser, the court took action against the company on account of claims that were made by the company about the product that they were selling. Section 13 and 33 of the ACL were contravened on account of false information.[2] Therefore MC Fitness Centre was under an obligation not to mislead Ryan on account of the services that they were providing. As per the ACL, for all services that are bought under $40,000, it is the duty of the business to provide an automatic guarantee. Section 259 of the Act provides that, if a business fails to provide a guarantee for the service that he is providing, the consumer has the right to either initiate for cancel or refund, he has the right to cancel the service and the consumer can also seek for compensation for the loss and loss occurred while availing the service. The provider of the service cannot make misleading claims about the compensation that they are not responsible for the loss or damage incurred during the course of service.[3] Moreover, the action of the court is unlikely to be characterized when the court takes action for the wrong done or for the injury as a genuine adjustment of the compensation for the person in a particular relationship or area of activity. [4] Therefore as per the facts of the case, Ryan has the right to seek compensation on account of loss suffered from using the machine due to the fitness Centre buying cheap products and benches to save costs.

A retailer’s rights and responsibilities to a consumer are:-

• Goods must be of sound quality;
• If service is provided, the service should be provided with reasonable care;
• It’s the responsibility of the retailer to get the parts repaired in case of any fault;
• The retailer has the right to offer for refund o if there is a minor default in the service provided.[5]

So in the case of MG fitness, they are under a legal obligation to provide services of sound quality and if there is any defect in the services, it is their responsibility to get it repaired or compensate for the loss occurred. A contract has terms and conditions which specify the rights and duties of a party. Many Laws protect consumers from unfair terms. The different conditions of a consumer contract that are covered by unfair contract terms are – Clause setting out the price, clause specifying the service and conditions that need to be specified under the law. If a business has misrepresented the goods, services or terms or conditions, the consumer have the right to end the contract without any penalty imposed. [6]

Conclusion:-

In the following situation, Ryan and MG’s Fitness Centre are the two parties of the contract. MG’s Fitness Centre was under a legal obligation to provide services that the contract specified. They are misleading him on account of false information and unfair contract terms. Ryan was injured because of the cheap quality of the benches and torn equipment. Therefore Ryan has the legal right to seek compensation for the loss incurred on account of cheap quality benches and equipment and to come to a position that he has originally before he suffers the loss. Since the contract was framed with an unfair term, Ryan has the right to terminate the contract without any penalty imposed. On the other hand, MG’s fitness center is under a legal obligation to provide compensation to Ryan on account of services not provided with reasonable care and the goods not being of good quality. He is liable to pay compensation for medical injuries amounting to $20,000 and refund of membership fee amounting to $450.

Business Laws - Question 2

Issue:-

Whether Kath and Kim legally challenge the transfer of the farm?

Relevant Law Applicable:-

Australian Contract Law

Applicability of Law:-

A contract is an agreement binding between two parties. A contract occurs when one party makes an offer and the other party accepts the offer instead of monetary consideration. Hence there was a contract between Bob and Tom on account of transfer of land. The essentials to form a legal contract are as follows:-

• An offer should be made by one party;
• The offer should be accepted by the other party;
• There should be an intention to create a legal relationship by the parties and;
• Consideration (in the form of money) should be paid in exchange for the promise. [7]

There are many situations where the legality of a contract is challenged. A person making a contract should be legally capable to form a contract. The Legal capacity of a person means a person signing the contract should be sound enough to understand the terms of a contract. The term capacity is throughout used in law which means the general capacity of a person to perform various legal activities. It means the mental ability of a person to make and accept decisions.[8] Rebuttable presumption means the situation where the courts decide whether the contract formed is legal or not. There is no contract between the parties if:-

• The person signing the contract has a disability:
• If one of the parties of a contract is a minor;
• If one of the parties of a contract is elder and he is not able to understand the terms and conditions of the contract;
• At the time of signing of the contract one of the party is intoxicated or under drugs and:
• One of the parties is a friend to another party.

As per the facts of the case, Bob was 84 years suffering from arthritis and dementia. Dementia is a mental disorder that causes memory loss and impaired reasoning. The person is not able to judge what is right and wrong. At the time of signing of the Contract, Bob was suffering from Dementia. If one of the parties is not able to understand the terms of the contract, the contract formed is void. In the case of Gibbons v Wright [9] the court held that if one of the parties of a contract is unable to understand the nature of the agreement because they lack the capacity to enter into the contract, the contract formed will be void. Therefore the contract formed between Bob and Tom is not a legal contract framed is not a legal contract, the contract formed is void.

Conclusion:-

In the following situation, the contract formed between Bob and Tom would amount to a void contract. At the time of signing a contract, a person should be in a legal capacity to enter into a contract. Bob was 84 years old and suffering from arthritis and dementia. Dementia is a mental disorder suffered by a person. Mental disorder amounts to the incapacity of a person to enter into a contract. Therefore Bob’s two daughters Katha and Kim can legally challenge the validity of the contract on account of whether Bob was legally capable to enter into a contract or not.

Business Laws - Question 3

Issue:-

 The Legal right of Frank and Smithers on account of an additional $10,000

Relevant Law Applicable:-

Australian Contract Law

Applicability of Law:-

As per the facts of the case, Frank was a builder who signed an agreement in order to renovate Mr. Smither’s property. The amount agreed for the work was $50,000. After the contract was signed between the parties, frank realized that the work cannot be done at this price and he told Mr. Smithers to pay him an extra $10,000. So on account of that Mr. Smithers signed another agreement stating that he will pay additional $10,000. Contract Law of Australia specifies that the parties have the right to terminate the contract. The parties of a contract have the right to terminate the contract if the contract formed between the parties is based on a condition, the condition is breached so the aggrieved party has the right to terminate the contract and will be entitled to compensation on account of loss occurred. Repudiation means when a party is not willing to perform the contract. As per the facts of the case, Mr. Smithers was not willing to perform the second contract on account of paying an additional $10,000. If one party repudiated the other party has the right to terminate the contract and seek for compensation. [10]

 In the case of Mann V Paterson Constructions[11]the court held that remedial options are available to a builder if the other party terminates the contract by repudiation. The party aggrieved has the right to claim for compensation on account on account of repudiation and can claim for the losses incurred in respect of the uncompleted work as the contract was no longer performed by a party to a contract. As per the facts of the case, since another contract was signed between the two parties, the sole purpose of the contract was an additional amount and Mr. Smithers later denied paying the extra amount, there was a breach of contract. A breach of contract occurs when one of the parties of a contract is unable to or not willing to act as per the terms and conditions framed at the time of signing of the contract. When such a situation occurs the other party has the right to seek compensation for the same. If the party in the court proves itself to be innocent so the court would put the second party in the position that it was before, if there was no breach of contract between the parties. Therefore in the following situation, there was a clear breach of contract done by Mr. Smithers on account of not paying the extra amount to Frank. Frank can claim for compensation.

Conclusion:-

From the above facts of the case, and the analysis it is clear that there was a breach of contract between the parties. If there is a breach of contract the other party has right to claim for compensation on account of the loss suffered by the party. Therefore there was a breach of contract done by Mr. Smithers for not paying the additional amount and he can be held liable for compensation to Frank. Frank has the legal right to claim compensation on account of breach of contract and Smithers is under a legal obligation to pay Frank an additional $10,000 as he terminated the contract and repudiated the same.

Bibliography for Australian Competition and Consumer Commission

Cases

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 4) [2015] FCA 1408

BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall Para 230 [2019] HCA 45 Ret

Gibbons V Wright (1954) 91 CLR 423

Mann v Paterson Constructions Pty Ltd [2019] HCA 32

Acts/Legislation

Australian Contract Law

Australian Consumer Law Schedule 2, Section 51 – Definitions Common wealth Consolidated Acts

Articles

Dorota Bryks and Lillian De Kantzow: - Australian Consumer Law: Retailer Rights and responsibilities under ACL 02 December 2017.

Others

Australian Competition & Consumer Commission –Entering into a contract.

Book

Chapter 7:- Capacity and incapacity pg.98-99 [7.1-7.11]

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