Using case law and legislation to solve legal problems

1. Using case law and legislation to solve legal problems

2. Source of legal rights Contract Torts Statute

3. We will look at: • Contract • Example of use of common law (cases) • Australian Consumer Law • Example of use of legislation (and inter-action with case law) • How to use case law and legislation in legal problem solving.

4. What is a contract? How do we know whether or not a contract has been formed? Case law

5. A contract is an agreement that is enforceable at law.

6. Source of law • How do we find the law of contracts? • Mainly case law • e.g. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

9. Carlill v Carbolic Smoke Ball[1893] 1 QB 256 • Unilateral contract • Offer can be made to world at large • Distinguish offer from invitation to treat by looking at intention of offeror • Unilateral contract – offer made at large, but only accepted by those who actually perform • Unilateral contract – communication of acceptance not required • Consideration can equal detriment/effort

10. OFFER/ACCEPTANCE ANALYSIS OFFER + = AGREEMENT ACCEPTANCE INTENTION CONSIDERATION

11. Offer “the indication by one person to another of his or her willingness to enter into a contract with that person on certain terms” Carter and Harland, “Contract Law in Australia” 4th edn p28 Case law?

12. An offer is not.... From Harvey to Facey: "We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order that we may get early possession." From Facey to Harvey: "Lowest price for Bumper Hall Pen £900.“ • A request or the supply of information • Harvey v Facey [1893]AC552 From Harvey to Facey: "Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid;”

13. Harvey v Facey “the mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at the lowest price.” Lord Morris at 556

14. An offer is not... • An invitation to treat • Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1QB 401

15. Examples of Invitations to Treat • advertisements/circulars • price lists • displays of goods in shops • calls for bids at auctions, and • calls for tenders. • So, is every ad an invitation to treat?

17. What do the cases tell us about offers? • The offeror must intend to be boundby the offer • E.gHarvey v Facey • Boots case • We can often determine this intention by looking at the amount of detailin the offer (it should contain enough detail to allow a binding contract to come into existence) • E.gCarlill v Carbolic Smoke Ball • The offer must be communicatedto the offeree • All cases

18. All an offer needs is a ‘yes’ to make a contract

19. OFFER/ACCEPTANCE ANALYSIS OFFER + = AGREEMENT ACCEPTANCE INTENTION CONSIDERATION

20. Acceptance A FINAL and UNQUALIFIED assent to the terms of an offer made in the manner specified or indicated by the offeror The “yes” which ends negotiations

21. Acceptance must respond to the offer • So, only those persons: • to whom the offer was made; and • who have the offer in mind at the point of “acceptance” may accept

22. Acceptance must be communicated • Silence is not sufficient • Felthouse v Bindley (1862) 142 ER 1037

23. OFFER/ACCEPTANCE ANALYSIS OFFER + = AGREEMENT ACCEPTANCE INTENTION CONSIDERATION

24. Wedding cake As well, Mavis is being threatened with legal action by Chrissie Saranrap. Chrissie was married a month ago and was expecting Mavis to provide her specialty – the “nouveau doveau” - a tiered tower of cupcakes, iced in white and arranged to resemble the wings of doves – as the centrepiece cake for her wedding reception. Mavis loves doing cakes for weddings – in fact she now makes more money from doing wedding cakes than she does from her regular cooking classes.

25. Chrissie saw information about Mavis’ cake services after an article in the local paper, and called round to see Mavis, and look at the different cakes she could make. They discussed possibilities and pricing and Chrissie left with a price list. Apparently, Chrissie called and left Mavis a message on the answering machine ordering the “nouveau doveau” for her wedding, to be delivered on 2nd May at the wedding reception, for $2,000 COD. In her message, Chrissie had said: “If I don’t hear to the contrary, I’ll assume everything is OK. Call me if there is a problem – otherwise I will see you on the 2nd. Looking forward to your lovely creation.”

26. Unfortunately, because of all the work being done to the kitchen and problems with electrical work and electrical supply, Mavis had experienced a number of black outs which had interrupted her answering machine. Mavis – never received the message from Chrissie, and so of course, had not provided the cake. Chrissie is very angry and claims her wedding was ruined without the cake. She has threatened to sue Mavis.

28. Legal problem solving – using case law and legislationPart II

29. Source of legal rights Contract: Express Terms Torts Statute: Consumer Guarantees

30. Contents of the Contract Terms

32. Term or representation? • Objective test of intention • “reasonable man” • Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 • Indicative factors include • Importance of statement • Time between statement and contract • Special knowledge or skill or access to truth of one party • Inclusion of statement in any subsequent document • Ellul &Ellul v Oakes (1972) 3 SASR 377

33. What kind of term? A term may be either: • a Condition • Essential term • Breach – entitlement to terminate/or damages • a Warranty • Ancillary term • Breach – damages, but no termination • an Innominate term • Intermediate term • Breach – termination if sufficiently serious

34. Test: how essential was the promise? “The question whether a term in a contract is a condition or a warranty, i.e. an essential or a non-essential promise, depends upon the intention of the parties as appearing in or from the contract. The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict, or a substantial, performance of the promise, as the case may be, and that this ought to have been apparent to the promisor…. Jordan CJ in Tramways Advertising v Luna Park

35. ‘ Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) CLR 633 Associated Newspapers Limited v Bancks (1951) 83 CLR 322

36. Innominate terms: Hong Kong Fir “There are, however, many contractual undertakings of a more complex character which cannot be categorised as being “conditions” or “warranties”….Of such undertakings, all that can be predicated is that some breaches will, and others will not, give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend on the nature of the event to which the breach gives rise and do not follow automatically from a prior classification of the undertakings as a “condition” or a “warranty”.” Diplock LJ 69/70

37. Innominate terms • Approved by High Court in • Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61

38. Consumer Guarantees: Australian Consumer Law

39. Revise: How to read a statute E.g. Competition and Consumer Act 2010 (Cth) – s18 Misleading or deceptive conduct             (1)  A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

40. Elements of a section: • Person • In trade or commerce • Engage in conduct • Misleading or deceptive • Defined by legislation (definitions section) or by courts (case law.)

41. Legislation • Competition and Consumer Act 2010 (Cth) • Schedule 2 - Australian Consumer Law • Application scheme • Commonwealth Act – only applies to corporations • Why?

42. Application Scheme • How does Australian Consumer Law (ACL) apply to all jurisdictions in Australia? • Why do we find it at Schedule 2 of the Competition and Consumer Act 201o (Cth)?

43. Part 3-2: Consumer Guarantees Division 1—Consumer guarantees Subdivision A—Guarantees relating to the supply of goods 51 Guarantee as to title 52 Guarantee as to undisturbed possession 53 Guarantee as to undisclosed securities etc. 54Guarantee as to acceptable quality 55 Guarantee as to fitness for any disclosed purpose etc. 56 Guarantee relating to the supply of goods by description 57 Guarantees relating to the supply of goods by sample or demonstration model 58 Guarantee as to repairs and spare parts 59 Guarantee as to express warranties

44. 56  Guarantee relating to the supply of goods by description              (1)  If:                      (a)  a person supplies, in trade or commerce, goods by description to a consumer; and                      (b)  the supply does not occur by way of sale by auction; there is a guarantee that the goods correspond with the description.              (2)  A supply of goods is not prevented from being a supply by description only because, having been exposed for sale or hire, they are selected by the consumer.              (3)  If goods are supplied by description as well as by reference to a sample or demonstration model, the guarantees in this section and in section 57 both apply.

45. Common elements a person supplies, in trade or commerce, goods to a consumer • Common Elements: • Person/corporation • Supply • Trade or commerce • Goods • Consumer

46. S2:trade or commerce trade or commerce means:                      (a)  trade or commerce within Australia; or                      (b)  trade or commerce between Australia and places outside Australia; and includes any business or professional activity (whether or not carried on for profit). • And case law

47. S2: goods goods includes:                      (a)  ships, aircraft and other vehicles; and                      (b)  animals, including fish; and                      (c)  minerals, trees and crops, whether on, under or attached to land or not; and                      (d)  gas and electricity; and                      (e)  computer software; and                       (f)  second‑hand goods; and                      (g)  any component part of, or accessory to, goods.

48. S3: consumer  (1)  A person is taken to have acquired particular goods as a consumer if, and only if:                      (a)  the amount paid or payable for the goods, as worked out under subsections (4) to (9), did not exceed:                               (i)  $40,000; or                              (ii)  if a greater amount is prescribed for the purposes of this paragraph—that greater amount; or                      (b)  the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or                      (c)  the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.       (2)  However, subsection (1) does not apply if the person acquired the goods, or held himself or herself out as acquiring the goods:                      (a)  for the purpose of re‑supply; or                      (b)  for the purpose of using them up or transforming them, in trade or commerce:                               (i)  in the course of a process of production or manufacture; or                              (ii)  in the course of repairing or treating other goods or fixtures on land.

49. Case law • ‘of a kind ordinarily acquired for personal, domestic or household use or consumption’ • Carpet Call Pty Ltd v Chan (1987) ATPR 41-025

50. ‘ordinarily acquired for personal, domestic or household use or consumption’ • Not just personal use • Business use as well • e.g. Carpet in a nightclub (Carpet Call v Chan (1987) ATPR (Digest) 46-025) • Not just goods of a kind used in households • Commercial versions of domestic products as well • E.g. Commercial grade, decoratively coated insulation in Bunnings warehouses (Bunnings v Laminex [2006] FCA 682) • Mixed use? Common sense approach • E.g even though ostrich egg incubator could be used for home hobbies, if used commercially not consumer (Crago v Multiquip (1998) ATPR 41-620 )