Table of Contents

Memorandum

Issues

Rule

Application

Conclusion

Bibliography

Websites

Cases

Journal articles 

Memorandum of Principles of Contract

To: Kim, the manager

From: The Law clerk (ACCC).

CC:

Date: 03.07.2020

Subject: The terms containing such maximum payout caps, is likely to be void under ACL Part 2-3 in context to Bell v BetEasy dispute.

Issues of Principles of Contract

The main issue here is Contractual Obligations. A contract is a document between two parties in relation to the task that one party is obligated to the other or the payment of money that the other party has to carry out. In the matter of payment of dues, there are several processes. First of all, the making of the contract is one of the most important issues in this matter. One of the two parties that are stakeholders in this particular issue is BetEasy, a betting company that deals with the receival and payment of money on a day to day basis. The other party in this concern is Renee Bell, an individual who bets through the use of the platform provided to her through BetEasy. When Bell put her bets into the website, the website accepted her 500 Australian Dollars without giving her any warning about the takeout price at the time.

A contract is always applicable to a situation of dealership where two parties are interacting with each other through the involvement of the money. When situation comes to this, the contract plays the most important role. First of all, it is important to note that the contract is operational in a legal manner. BetEasy is an online company that has been doing business for a long time in Australia. The company has its guidelines listed down in the website. So it has to prove whether or not its contract is a standard form contract. That is the most important requirement from the end of BetEasy. A standard form contract is believed to be one unless some other party comes and proves that it is not. The proof of that has to be admitted in the court and has to be satisfiable to the judges. According to Australian Consumer Law Part 2 and 3, the contract under these circumstances would be allowed in the proceedings as a standard form contract.

According to the part 3 of the Consumer Law of Australia, unfair practices come into play when one of the parties mislead the other party regarding the requirements and the clauses and the subclauses of the contract.1 A false promise is the creation of a situation when the party promises something to the other party involved in the matter and does not deliver. For example, if the betting company has promised the individual that if they win the bet, they are supposed to take their money within a certain period. In that particular case, if the company does not release the money within the required amount of time, then the legal terms and conditions of the contract is not met.

If the money put into bet in such a situation is $100, and the stake that the betting party has invested the money upon is $500, then the betting company is legally required to pay the money to the individual. If they are refusing to pay the money in this situation, it is leading to a case of false promises for the company. Howeer, it is much dofferent to this particular case that Renee Bell has filed against BetEasy.2 For one, BetEasy has reminded time and again to every person who is indulging in the investment of money into betting to check the norms and regulations for the transactions in the first place.

In the transaction rules, it has been clearly mentioned that the maximum takeout any person might have in a day can go up to only about $250,000. Whoever wins the bet might have more than that of $250,000. However, in that particular case, the betting company would not be able to pay more than $250,000. This is because that is part pf their business policy. Any business house is highly likely to follow their business policies to the core. However, the dilemma that is created here is that Bell is alleging that when she put the money onto the website for the purpose of registering herself for the bet, there was no signal or check from the betting company.

Therefore, the thing that the betting company performed in this particular case can be linked or can be termed as unfair means. According to the plaintiff, she was deceived by the betting company. This is because the company knew that even if she wins, she would not have the amount of money that she actually won as a result of the bets. The question is can the betting company prove that their contractual agreement in this particular case was standard? Can the plaintiff proved that she was deceived by the company by unfair means?

Rule of Principles of Contract

The Australian Consumer Law (ACL) is the second schedule of the Competition and Consumer Act 2010, which provides the guarantee of protection to the customers.3 The part 2-3 of the ACL is associated with the unfair terms of the contract. The part 2-3 defines the meaning of 'unfair' in terms of the contract terms and agreements. As per the provisions of the Australian Securities and Investments Commission, the term in the consumer contract is regarded as 'unfair' when the rights of the parties are disregarded, and the obligations take place under the contract.4

The term of the standard form consumer contract is likely to cause different detriments (financial, delays) for a consumer is also considered as 'unfair'.5 To determine whether the consumer contract is fair or unfair, the court of Australia is guided to consider the following aspects: the transparency of a contract and the entire contract as a whole thing. As per the provisions of the ACL part 2-3, a term or consumer contract is considered to be transparent if the terms and conditions are presented very clearly, they are comprehensive, written in a very plain and acceptable language is available readily to any of the party who is affected by the terms.

The breach of contract takes place when the binding agreements are violated by one or more than one parties and results in a violation of the rights of the other parties. The ACL identifies the breach of contract only for the contracts which are valid and legally supported. The contract between both the parties must intend to build the legal relations and comprehensive enough to be understood and agreed by both the parties. The Codelfa Construction Pty Ltd v State Rail Authority of NSW is one of the most referred cases regarding the breach of contract.6 The true rule was implemented in the case, which suggested that the interpretation of the contract is required to be clear and implicit. The ACL provides the guidelines regarding providing the safety warning by the suppliers to the consumers for consumer protection and safety. If the potential adverse impact on the consumer is known, it is the responsibility of the opposite party to make the consumer aware of the fact and produce the warning.7 As per the part 2-3 of the ACL, several unfair consumer contracts are:

  1. A term of a sort, or A term, which has an impact of a sort, endorsed by the guidelines.

  2. A term, which grants, or has the impact of allowing, one gathering (yet not another gathering) to restore the agreement8

  3. A term, which grants, or has the impact of allowing, one gathering (yet not another gathering) to end the agreement;

  4. A term, which limits, or has the impact of constraining, one gathering's vicarious risk for its operators;

  5. A term, which limits, or has the impact of restricting, the proof one gathering can cite in procedures identifying with the agreement;9

  6. A term, which punishes, or has the impact of punishing, one gathering (however not another gathering) for a break or end of the agreement;

The estoppel, under the doctrine of promissory results in the enforceable obstructions without considering the conditions such as the dishonesty and breach of promise and unfair behaviour of the promisor. In the Legione v Hateley [1983] 57 ALJR 152 CLR 406, High Court of Australia case, the doctrine of promissory was applied.10 The legal principle prevents an individual from arguing their position.

Application of Principles of Contract

In the present scenario, whether the terms established between the BetEasy Pty Ltd and Renee were unfair as per the ACL is required to be assessed. The BetEasy has clearly stated the guidelines, terms and conditions in their official website for the consideration of the punters and potential gamblers and people associated to the bets. According to the arrangements of the Australian Securities and Investments Commission, the term in the purchase contract is viewed as unfair or out of line when the privileges of the gatherings are ignored, and the commitments happen under the agreement.

The term of the standard structure shopper contract is probably going to cause various hindrances (monetary, delays) for a customer is likewise considered as out of line. To decide if the consumer contract is reasonable or unfair, the court of Australia is guided to think about the accompanying viewpoints: the straightforwardness of an agreement and the whole agreement in general thing. According to the arrangements of the ACL section 2-3, a term or customer contract is viewed as straightforward if the terms and conditions are introduced obviously, they are complete, written in a plain and worthy language is accessible promptly to any of the gatherings which is influenced by the terms. In the website of BetEasy, it is clearly written that the potential punters are responsible for assuring that the stakes of them comply with the limits of the company.

Though Renee Bell has made a stake of $1,443,695.90 through multiple bates, she was responsible for ensuring the returns and stakes are within the maximum limit. Thereby, for this instance, the BetEasy is innocent as it has shared the guidelines with the customers and potential punters, however, the ACL considers the terms to be unfair when the customer rights are violated, and various hindrances are created due to the activities of the retailers. In the present context, the BetEasy Pty Ltd did not clearly state the limitations and deductions for the bates when Renee Bell was investing in the bates. When the customers are subjected to monetary or any kind of loss, the ACL provides the guidelines for protecting the consumers and allowing them to take legal steps against the seller. It was the duty of the BetEasy Pty Ltd to warn Renee Bell regarding the number of stakes, the deductions and the maximum limit of the stakes when she was making the investments for the sport and horse racing bates.

The true rule was implemented in The Codelfa Construction Pty Ltd v State Rail Authority of NSW, where it was suggested that the terms and conditions in the contract are to be clear. As per the suggestions of Justice Mason regarding the case, the contradictory languages are to be avoided in the contracts. In the present scenario, both the parties have tried to develop a legally accepted relationship by defining the payout caps and stake amounts. The payout caps, terms and conditions were very clear and comprehensive. In each of the instances, the payout caps for racing and sports were clearly defined along with the amount of payout caps. However, the ACL provides the guidelines regarding the safety warning to the consumers.

In the present scenario, though the terms and guidelines were written clearly for the ease of the customers and punters, it was the responsibility of the BetEasy Pty Ltd to warn Renee Bell regarding the maximum amount of the payout caps. The consumer, Renee Bell, has made the investments in the bets to earn more profit as she was not warned of the highest limit of payout as per the terms and conditions of BetEasy Pty Ltd. In the present scenario, the breach of contract has also taken place. As Renee Bell made bates for multiple times, she was the consumer of BetEasy Pty Ltd. Renee Bell bated for multiple times as she was to make enormous profits from the bates.

As per the contract, the company needs to pay the amount to Renee Bell according to the amount of the bets. However, the BetEasy Pty Ltd did not provide $1,443,695.90 to Renee Bell and just offered $250,000 as the maximum amount of the payout caps. Hence the contract has been breached by the company. As per the ACL part 2-3, when the rights of the consumers will be violated due to any actions or inactions of the promisor, it will be regarded as unfair. In the present scenario, the contract made between the BetEasy Pty Ltd and Renee Bell was violated due to the company's unfair activities. The considered dispute could be associated with the examples of unfair means defined by the ACL. Thereby, it could be stated that the BetEasy Pty Ltd has breached guidance of part 2-3 under the ACL. The BetEasy Pty Ltd was associated with estoppel.

Conclusion of Principles of Contract

It has been found that BetEasy has the guidelines stated in a situation that makes them not liable to anything that is the fault of a wrong doing on anybody else’s part. According to the Australian Consumer Law, the rule lays down a few justifications based on which a contract can be termed as a standard form contract. The first among these is the fact that it needs to be checked whether the contract is fair to each and every one of the parties. One of the areas that is worthy of noticing is the fact that none of the parties are able to take a higher level of advantage than the other unless the amount of money won through the transaction is more than $250,000.

If the earnings exceed the limit, the fairness of the contract is not visible. It benefits the betting company much more than that of the people who invest their money into the betting process. This is something that is very important to note down for the case. It shows that there are grey areas in this whole system under which the betting company operates. It cannot be said that the terms and conditions laid down by the betting company in question has a certain degree of favouritism towards the company itself under a certain set of circumstances.

Another area that needs to be put under the discussion here is the fact that whether the terms and conditions of the contract are prepared keeping all of the stakeholder parties in light of the information. Since the betting company is performing their business on an online platform where the interaction with any of the other stakeholders happen online, it is obligated to obtain the permission from that of the customers. Here, it can be said that the betting company followed the rules and procedures as laid down in the Australian Consumer Law. It did not deviate from its original obligations which in this case is to just make the stakeholders informed about their choices. In this particular case, there is no scope of rejection by the parties involved. If the customer who operates online decides that the terms and conditions are not favourable to them, then they are free to reject them.

In case of the plaintiff, Ms Renee Bel, this provision was applicable. If she had felt that the terms and conditions of the betting company was not according to her convenience, she had the opportunity to reject them then and there. The transaction would not take any further position in such circumstances. From the point of view of contract law and the statutory position of the contracts, this can be viewed as a set of circumstances that favours the betting company again.11 It is important to make sure that the main people who are involved in the whole process have their fair say of yes and no in the process. The whole ordeal of betting and earning money by winning the bets is a complicated process. There has been no attempt on part of the betting company to make it more convenient and simple for the individuals who invest their money in this process.

In contrast, it ca be argued according to the provisions laid down by the Australian Consumer Law that the treatment of the case by the accused was not on fair means. First of all, if the accused has at all laid down the circumstances of the process of betting, they have to follow it up by not allowing the people to bet as much money so that the earning of the people becomes more than the limit set by the betting company. This is a misleading conduct on part of the betting company in the process.12 If the company wants people to be part of the transactions, they should have everything clear from their end.

In this particular instance, it is clear that the opportunity for the customers or the punters to earn money is obstructed by the rules followed by the betting company. The company does not have the grounds to put the plaintiff under such circumstances and not pay the money that is rightfully hers in the process. The terms of maximum pay-out cap are going to be null and void in this particular case because the accused did not have each and every area of their transaction covered up by norms and regulations. If there was a rule in place for the accused, they should have made the effort to have the rule effective in every situation. By not doing so, they have made their cap of payment null and void.

Bibliography

Cases

Codelfa Construction v State Rail Authority of New South Wales (1982) 149 CLR 337 – Law Case Summaries. (2018). Retrieved 3 July 2020, from https://lawcasesummaries.com/knowledge-base/codelfa-construction-v-state-rail-authority-of-new-south-wales-1982-149-clr-337/

Contract Law Casenote: Legione v Hateley 1983. (2020). Retrieved 3 July 2020, from http://netk.net.au/Contract/Legione.asp#:~:text=Legione%20v%20Hateley%20%5B1983%5D
%2057,406%2C%20High%20Court%20of%20Australia&text=There%20was%20a%20contract
%20for%20the%20sale%20of%20land%20between%20the%20parties.&text=The%20buyer
%20had%20intended%20to,refused%2C%20an%20extension%20of%20time.

Journal articles

Miller, Russell, "On The Road To Improved Social And Economic Welfare: The Contribution Of Australian Competition And Consumer Law Reform" [2016] SSRN Electronic Journal

Nottage, Luke. "The new Australian consumer law: what about consumer ADR." 9 (2009): Queensland U. Tech. L. & Just. J.

Paterson, Jeannie. "The Australian unfair contract terms law: The rise of substantive unfairness as a ground for review of standard form consumer contracts." (2009): Melb. UL Rev. 33

Pearson, Gail. "Further challenges for Australian consumer law." In Consumer Law and Socioeconomic Development, 2017. Springer, Cham.

Dietrich, J. O. A. C. H. I. M. "Liability arising from contract and under the australian consumer law." (2015).

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