Word Limit: Minimum 2,700 words – Maximum 3,000 words [includes footnotes and bibliography]
QUESTION 1 [30 marks]
On 1 August, Nandini, who owns an electrical appliance store, Nandini Electro Pty Ltd, places an advertisement in the newspaper which states:
“Huge Electronics Sale. All Computers 50% off.”
Visit our web site and see the large range of goods we carry.”
On 2 August, Angelo reads the advertisement and visits the web site. He sees a picture of a Apple Model Number 5 Computer and clicks on the picture. Angelo is linked to a page which has all the details on this computer. At the bottom of the page are words “Contact Us” and the store’s email address.
That afternoon Angelo sends the following email to the store:
“What is the price of the Apple Model Number 5 computer? How many models of this computer do you have in stock?
Within 1 hour, Nandini replies to Angelo by email, saying:
“We have five Apple Model Number 5 computers in stock. Our retail price is $2,000 and the sale is price is $1,000.”
Angelo telephones several other computer stores to check their prices and discovers Nandini’s price is very cheap. Angelo decides to buy this computer from Nandini Electro Pty Ltd.
On 3 August Angelo telephones Nandini’s store and asks if this model computer is still on sale.
Nandini, who answers the phone, replies: “Yes, I can see one on the shelf right now, it is sale priced at $1,000.”
Angelo says: “Great, I will buy it. My name is Angelo and I will come and pick it up immediately.”
Nandini replies: “See you soon, Angelo.”
Angelo takes a taxi to Nandini’s store. When Angelo walks into the store, Angelo sees one the advertised computer he wants on the display shelf with price tag saying “Sale Price $1,000.”
Angelo says to Nandini: “I just telephoned you about buying this computer for $1,000. I am here to pay for it and take it home.
Nandini replies: “I’m sorry, I have changed my mind. This is the last Apple Model Number 5 computer I have in stock and I have decided to give it to my brother, Raju, as a wedding present for his wedding tomorrow.”
b. Assume the computer is still available for sale but Nandini says to Angelo she has changed her mind about the price and that it is now for sale for $1, 800. Analyse whether Nandini has acted in breach of a relevant statute law studied in this course. Your answer must identify the relevant statute and section(s) together with a discussion on its relevance to the given facts. [10 Marks]
Answer to question no-A
What are the legal rights he has under the common law of contract in respect of the computer that he wished to purchase?
According to Australian Contract Law, to form an agreement, there must be an offer and acceptance. Offer is the expression of intention of one person to do or not to do certain things and it must be made with the intention to bind the other person. Offer can be made either orally or in writing. The offer is an important element of an agreement and acceptance to an offer is the final element of an agreement. An acceptance is when the offeree gives his ascent to do or not to do certain things; the offer is considered as accepted. According to Wilson, “The acceptance is to an offer is like a lighted match stick to the train of gun powder.” When the lighted match stick comes into the contact of gun powder, it explodes the train. Once the acceptance is given, it cannot be breached by other party. If the other party breaches it, then he would be liable for damages and compensation. There are certain characteristics in respect of acceptance of offer:
But the offer is different from invitation to treat in which the other persons are requested to make offers and to do the negotiations. The offer must be definite and clear. The offer may be general offer or special offer. When the offer is made to the general public, it is treated as general offer. When the offer is made to specific person or class of persons, then it shall be treated as special offer.
Facts of case: Nandini Electro Pty. Ltd. gave an advertisement in the newspaper that the company has started big electronic sale and giving 50% discount on all computers. For availing the benefits of sale, the customers can visit the website and watch their products. On the next day, Angelo read the advertisement and visited their website and shortlisted the product ‘Apple Model Number 5 Computer and get the details on their website. The website contains the words “Contact Us” and email id of the store. He mailed on the email of store about the enquiry of price and stock of Apple Model Number 5. Nandini replied that she told him they had 5 Apple Model Number 5 computers in stock and their price after discount is $1000. Angelo enquired at other places for this model computer and decided to buy the computer from Nandini Electro Pty. Ltd. Angelo called in the Nandini Electro Pty. Ltd.’s Store and Nandini informed him that they have one computer of this model and it is on sale right now. Angelo confirms her to buy the computer at the sale price of $1000. Angelo went to the store and asked for computer but Nandini refused to sell the last Apple Model Number 5 computer and she has decided to give it to her brother as Wedding present. Whether Angelo can enforce Namdini Electro Pty. Ltd. for performance of contract or not.
Application: In this act, Nandini Electro Pty. Ltd. has made the public advertisement to giving the information of the sale on computers. Angelo enquired for the Apple Model 5 computer and asked for the price. This advertisement would be treated as invitation to treat and the company wants to get the offers for their products to sale them on 50% sale. Angelo initially asked for Apple Model No. 5 computer and Nandini disclosed him about the price of the computer. There was no offer made to other person as the advertisement didn’t show the key terms of the offer. Angelo made the offer for purchase of Apple Model 5 computer for $1000 from Nandini Electro Pty. Ltd. but Nandini Electro Pty. Ltd. didn’t communicate its acceptance. There is an offer from Angelo to purchase the Apple Model Number 5 as he asked earlier for the price and quantity of the product available in the stock. He made the offer for 1 Computer Apple model number 5 for $1000 on 03rd August over the telephone. But on the other side, Nandini didn’t confirm on his offer and she only said that she will see him in her store. On the visiting of the store for purchasing the Apple Model Number 5 computer, Angelo asked for the offer but she refused to sell the computer. Angelo cannot enforce her for selling the computer as there was no agreement. Angelo made an offer but there was no acceptance on his offer so he could not prove the acceptance. In this case, the acceptance was not communicated to the Angelo for the offer of purchase of Apple Model Number 5 computer. For the formation of agreement, offer and acceptance both are the important elements and the agreement come into the existence when the offer and acceptance both made and communicated to each other. Acceptance must be given with the intention to accept the offer. Here in this case, Angelo made the oral offer but the acceptance is not clearly communicated to him. Here no agreement was formed. Acceptance may be either express or implied by the act of the parties. Nandini being the director of the company has replied to Angelo that she would see him in her store. In the case of New South Wales Supreme Court case of AGC (Advances) Ltd v McWhirter, it was held that there can be withdrawal of reserve price of properties during the auction and there shall be no compulsion for sale. However, the contract can be made without the identification of offer and acceptance. But the condition is that there must be mutual consent between the parties. The acid test is applied in those cases where there is complex process of identification of offer and acceptance.
Hence, the agreement can be formed by making offer and acceptance. The offer and acceptance must be duly communicated to each other. The invitation to treat is different from the offer. Offer is the promise made by offeror to offeree to do or not to do certain things. Offer must be clear and communicated to other person about the consideration in the agreement. The Acceptance is the reciprocal promise made by offeree to offeror about his ascent to do or not to do the certain things. In this case, Nandini Electro Pty. Ltd. had made an advertisement in respect of electronic sale of computers. Angelo has approached them to buy the Apple Model 5 computer. Angelo made the offer to purchase the computer at $1000 but the company has not made any acceptance on the offer of Angelo. So there was no agreement formed between the company and Angelo. That’s why; Angelo cannot enforce the company for performance of the contract.
To enforce the contract, he needs to prove the acceptance on his offer and the acceptance can be proved by implied acceptance. The company also wants to sell the computers in the sale. Later on, the company cannot withdraw the product from the sale. The agreement should be made with the intention to create the legal relations between the parties. This agreement was creating the legal rights on both parties if the acceptance is proved by the implied means. The offer must be accepted according to prescribed modes in the offer. The offer was made by Angelo on Telephone and the company’s representative said that see you soon. This could not be interpreted as the acceptance on the offer. For the valid agreement, there must be proper offer and acceptance. Without the offer and acceptance, no agreement can come into existence. Without the agreement, no legal rights and liabilities can be created on the parties. Thus, Angelo doesn’t have any legal right under common law of contract in respect of computer that he wished to purchase.
Answer to question no-B
What are the legislations and identify the relevant statute and section(s) together with a discussion on its relevance to the given facts?
For the formation of a contract, there must be valid Offer with acceptance. In order to make the valid contract, there must be following ingredients for forming an agreement:
Contract may be oral or written form. Oral contracts are tough to prove the terms and conditions as decided between the parties. The court must be satisfied upon the evidences presented before the court and the court must feel that there must be actual persuasion of its occurrence. In the case of Briginshaw v Briginshaw  HCA 34; (1938) 60 CLR 336 at 362; Watson v Foxman (1995) 49 NSWLR 315, it was held that the court must be satisfied by the exact proofs and direct testimony but without it, the court cannot be reasonably satisfied. In case of oral agreements, the parties must prove the terms of the contract and then the court can be reasonable satisfied about the obligations of the parties. The concept of offer and acceptance is made to meet the minds of both parties. The offer is the invitation to other person to enter into the certain conditions. The offer is distinct from invitation to treat. Invitation to treat is the statements made for calling for offers. In these cases, the offers are made by the customers and the acceptance is given by the business houses or auctioneer. The offer is the willingness of one person to do or abstain from doing anything with the intention to create legal obligations on the other parties; it would be termed as offer. Acceptance is the ascent or confirmation from other person to do or not to do certain things. Offer may be general offer or special offer. The offer is different from mere puffery, invitation to bargain and supply of information. Puffery is the attractive marketing statement made by the company and it would not be considered as offer. In case of Harvey v Facey (1893), the statement representing the supply information is not definite offer, so it cannot be accepted by the other party. There is the great difference between puff and offer. Puff is the mere statements to attract the customers for making the contract. In case of Leonard v Pepsico (2000), the court held that the advertisement given by pepsi is for grabbing the attention of the customers so there is no intention of the company to supply the plane worth US $23 million. Invitation to treat is the state before entering into the agreement where both parties bargain for the prices before the offer is made. Partridge v Crittenden (1968) in the invitation to treat, customers make the offer and if the shop owner accepts the offer, it would become the contract. But if the shopkeeper makes any offer which is incorrect and deceptive in nature, then he would be liable for making such statements under Section 18 of Australian Consumer Law. If there is any misleading or false information given in the advertisement, shop displays or catalogues, these statements would amount to breach of Consumer protection statute i.e Australian Consumer law. The shopkeeper shall be held liable under Section 18 for making the misleading or deceptive conduct, section 29 for making false representation and section 35 for making bait advertising. The offer is made by customer but the shopkeeper is liable to work according to the terms advertised by him.
Facts of case: As stated above, if the company says that the computer is available for sale but she being the director of the company changed the mind and decided to sale the product for $1800. Nandini firstly advertised in the newspaper to inform the general public about the 50% sale on the purchase of any computer products from their store. Angelo saw the advertisement and visited their website as per the advertisement and enquired about the price and no. of computers available in the stock of particular model. The company informed him about the price and status of stock in connection of particular product. Angelo enquired in other stores for prices and decided to buy the Apple Model 5 computer from her store. So he made the offer to purchase the Computer at $1000. But when he visited the store personally, she has changed her mind and decided to sell the product at $1800. Whether there is any breach of relevant statute law.
Application: In this case, the Company advertised for the huge electronics sale and it is giving 50% off on all computers. Angelo was the customer and he made the offer for purchase of Apple Model No. 5 computer. The company has not given the acceptance on the offer. But when Angelo reached on the store, she changed her mind and made the offer and she would sell the computer at $1800. She cannot be enforced under the provisions of the contracts law. But Angelo can sue the company for making the false representations and making the deceptive statements in the advertisement to committing the fraud. The counter offer ends the original offer and new offer come into the existence. The company made the counter offer to sell the computer of particular model at $ 1800 instead of $1000. So Angelo would either accept it or reject it. If he accepted the offer, the offer become agreement and bound both the parties to perform it according to the mutual terms and conditions of the contract.
Hence, the Company shall liable to fulfil the statements made in the advertisement and Angelo can ask for doing the offer on the discounted price as given in the advertisement. The company has made the invitation to treat and it would not amount to offer. When Angelo made the call for making the offer that he wants to purchase the computer, this statement would be treated as Offer and the acceptance on such offer shall be made by the company. The company has made the counter offer instead to making acceptance. In case of Hyde v Wrench, the counter offer ends the existence of original offer and counter offer comes into the play. Once the offer rejected, then it cannot be accepted. In this case, wrench made an offer to sell his property for $1000 but Hyde made the counter offer to purchase the property at $950 so later on, Hyde cannot accept the offer to purchase the property for $1000. Angelo made the offer to purchase the computer for $1000 but the company made the counter offer in place of the original offer to sell the computer at $1800. So the company made the false and incorrect representation to boost the sale of the company. Angelo can sue and claim the damages from the company for making the deceptive and incorrect statements in the advertisement.