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(1) Normally, when an agent acts on behalf of their principal, they do not themselves become liable on the relevant

transaction. For example, if an agent enters into a contract for their principal, they do not become a party to the contract, even if they sign the relevant documents on behalf of their principal. However, the scope of section 18 of the ACL is very broad. It prohibits any conduct in trade or commerce that is misleading. It does not matter whether the conduct that is likely to mislead, then they are potentially in breach of section 18. (2) Parol Evidence Rule When a contract seems to be complete, the courts would assume that the parties intended it to contain all the agreed terms. Therefore, further additional oral terms would not be allowed. Eg. ambiguity as to quality. Exceptions: ambiguity as to identification; when there are errors recording the agreed terms (eg. Amounts payable) (3) Mitigation of Loss When it can be proved by the defaulting party that the non-defaulting party takes no action in trying to mitigate their losses, damages claimed will be limited to the part of loss that was unavoidable. However, the non-defaulting party is not obliged to take risks, or spend money they cannot afford in mitigating their losses. As long as the non-defaulting party has acted reasonably in the circumstances at the time of the breach in taking the action they did, then even if the result is counter-productive, the nondefaulting party is entitled to recover both the actual loss suffered, as well as the additional expenses incurred. Note: In the case of an anticipatory breach of contract, the non-defaulting party is given a choice by law whether to terminate performance or not. This choice can be made freely, regardless of whether the option chosen results in a higher claim for damages than the alternative would have. (4) If hidden defects in g/s supplied amount to a breach of condition, or to a serious breach of an innominate term, the non-defaulting party will be entitled to reject what was supplied and put a stop to further performance. Termination of performance is not an available remedy for less serious hidden defects. (5) The remedy of termination means termination of the defaulting partys right to perform, not termination of the contract itself. Termination of performance does not wipe out the entire contract. Hence, any performance that has already been satisfactory made prior to the breach is not affected. Besides, any outstanding obligations remain enforceable at law, so that the nondefaulting party has a contractual right to claim damages for the defaulting partys breach of contract. The payment of damages has the effect of discharging these obligations in lieu of actual performance. (6) For a breach of condition implied into the contract by the sale of goods legislation, a buyer is entitled to reject the goods and treat the contract as repudiated. This right exists until the buyer

accepts the goods (or, in some states, until the buyer becomes owner of the goods bought). Damages for a breach of condition may also be claimed. For a breach of warranty (or after the buyer has accepted the goods, or become owner of them), the buyer may not reject the goods, but may claim damages.

Duress
A contract can be set aside on grounds of duress if

Threats of violence are made either directly against the contracting party, or against a
person who is related or close to them. It does not matter whether the threats were the only reason for agreeing to the contract- its enough for the plaintiff to prove that a threat of harm was one of the reasons for which they entered into the transaction.

Threats to economic harm Threats to detain, damage or otherwise unlawfully deal with another persons goods

Undue Influence
(1) Relationships that are presumed to have general controlling influence: Parent and child Guardian and ward Doctor and patient Solicitor and client Trustee and beneficiary Religious advisor and believer Stronger party has the onus of proving that no undue influence was actually exercised. (2) Relationships in which a general controlling influence is proved to exist Husband and wife Principal and agent Accountant and client Banker and customer Dentist and patient Employer and employee The weaker party may be able to prove that the stronger party had a general controlling influence. If so, a presumption of undue influence arises and the stronger party has the onus of proving that no undue influence was actually exercised in relation to the contract in question. (3) If the contract was made as a result of undue influence, the weaker party may be able to set aside the contract as void ab initio. However, he will have to ask for this within a reasonable time.

Mistake
(1) Mistakes that prevent agreement Agreement is judged objectively: what would a reasonable person conclude from the external evidence? When there is no objective consensus, no contract is created: the agreement is legally void. (2) Bilateral mistakes Mistakes like this (mistake about the identity of the subject matter of the contract) do not necessarily prevent the creation of a valid contract. To decide whether the contract is valid despite a bilateral error, the courts ask whether it can be inferred from the known facts that the agreement was conditional on the truth of the mistaken belief. If it was, then the contract is voidable performance must be reversed. However, contracts with mistakes about quality are seldom treated as voidable unless the error makes the thing contracted for essentially different from the thing that it was believed to be. (3) Unilateral mistake The courts would not provide relief to unilateral mistakes UNLESS it can be proved that the one party has contracted on disadvantageous terms under a misapprehension of fact, and when, knowing this, the other party act in a way that prevents discovery of the true facts.

Misrepresentation
(1) Intentional misrepresentation Intentionally leading the other party into error is deceit, and creates liability in tort law. Fraud provides the legal basis for an action in tort for damages and the plaintiff is allowed to rescind the contract. Because a representation is not a term of the contract, the plaintiff has no action against the defendant for breach of contract, even if the statement made by defendant is untrue. (2) Unintentional misrepresentation If a negligent (without duty of care) misrepresentation as induced a person into a contract, the contract can be set aside as void. The plaintiff can also bring an action in tort law for damages, based on the defendants negligent misrepresentation. (3) If a misrepresentation is made neither deliberately nor negligently, but innocently, then any contract induced by that representation cannot be set aside as void, and no action would lie in tort or contract law for damages. (4) To avoid the contract, the plaintiff must communicate their decision to the other party without delay after discovering the true facts. Failure to do so will be interpreted as a decision to affirm, rather than rescind, the contract. The right to avoid a contract will also be lost if the party seeking rescission has done anything since discovering the facts that is inconsistent with an intention to rescind.

Australian Consumer Law


(1) Who is consumer? Price $40000 or less If the price > $40000, the person is still a consumer if the goods are the kind of goods that are normally acquired for personal or household use Purpose of buying Household or personal use If goods are acquired for commercial purposenot consumer (no matter what price) Transportation Vehicles or trailers acquired for use principally in the transport of goods on public roads (whatever their cost) (2) Private Remedies Available for Contravention of ACL Damages Contravention of a provision of Chapter 2 or 3 of ACL Injunction, Non-punitive orders Contravention of a provision of Chapter 2, 3 or 4 of ACL Compensation orders, Other orders Contravention of a provision of Chapter 2, 3 or 4 of ACL Unfair terms in a consumer contract Examples of other orders: Declaring a contract or arrangement void in whole or in part. Varying the terms of a contract or arrangement; Ordering the refund of money; Ordering payment of damages; Ordering the person who breached the ACL to pay for repairs; The supply of spare parts or the supply of specific services; and Varying or reversing a transfer of land.

Chapter 2: General Protections (I) Misleading or deceptive conduct


Section 18 says: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (1) Conduct is misleading when it leads to the persons at whom it directed into error. (2) Liability may exist even if the conduct was engaged in without carelessness or intent. (3) Liability for potentially misleading conduct can be avoided if the person engaging in the conduct makes it clear that the conduct should not be relied on, for example, by issuing a disclaimer. (4) Generally does not apply to publications by information providers i.e. those in the business of providing information. Exception: advertisement

(II) Unconscionable conduct


Section 20(1) says: A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. Overlap between general law and statutory law (*unwritten lawcommon law and equity) (1) Why create this overlap? Under the general law, the only remedy for unconscionable dealing is to rescind the contract (void ab initio) Not always a particularly appropriate remedy The ACL provides additional remedies, including the power to alter terms of a contract that was entered into because of unconscionable conduct Section 21(1) says: A person must not, in trade or commerce, and in connection with the supply or acquisition of goods or services to or from a person (other than a listed public company), engage in conduct that is, in all the circumstances, unconscionable. (1) Note: this section does not distinguish between consumer and commercial transactions (i.e. applicable in situations in which a supplier or acquirer has engaged in unconscionable conduct in a commercial transaction). Nor does it matter the type of g/s being acquired or supplied + purpose of acquiring or supplying + their price. (2) Using undue influence or pressure, or using unfair tactics against a customer is likely to be unconscionable conduct breach of s21 (note: check s22)

(III) Inclusion of unfair terms in contracts


(1) A term of a consumer contract is void if the term is unfair and the contract is a standard form contract. The contract continues to bind the parties if it is capable of operating without the unfair terms. (2) A standard form contract is one in which: One of the parties has most of the bargaining power, and Prepares the terms on which they are prepared to deal Without giving the other party any reasonable opportunity to discuss or negotiate the terms. If one party alleges that they have entered into was a standard form contract, the other party is required to disprove the fact. (3) Terms are unfair if: Cause a significant imbalance in the parties contractual rights and duties Not reasonably necessary to protect the legitimate interests of the advantaged party Cause a financial or other detriment to one of the parties if terms were relied on (4) These provisions do not apply to terms that define the price and subject matter of the contract.

Chapter 3: Specific Protections (I) Unfair business practices


(1) False or misleading statements in connection with the supply of g/s (in trade or commerce) Does not matter whether the representations are made carelessly or with deliberately No one has an onus of proving that the representation is not misleading (2) Offering gifts and prizes (3) Misleading conduct as to the nature of g/s (4) Bait Advertising Advertising g/s at specified prices if the supplier has reasonable grounds for believing that they will not be able to supply those things for reasonable periods of time and in reasonable quantities, taking into account the nature of the market and what was said in the advertisement. (5) Wrongly accept payment for goods (6) Unsolicited cards Cards that can be used as credit cards must not be sent to persons who have not requested them in writing EVEN IF the person to whom the card is sent must do something to accept or activate the card. (7) Unsolicited goods A person is prohibited from demanding payment for goods that have been sent to a person who didnt ask for them A person who receives unsolicited goods is not liable to pay for them. Nor are they liable for any loss or damage to those goods, unless that loss or arm results from a willful and unlawful act by that person. Three months after the delivery of unsolicited goods, the person who sent them is not entitled to recover them (and this period can be shortened by a recipient who gives the sender written notice to remove the goods) (8) Pyramid schemes and referral selling All participants in a pyramid scheme are liable to pay a pecuniary penalty (9) Multiple pricing If more than one price is displayed for the same goods, a supplier should supply the goods at the lowest price. (10) Harassment or coercion

(II) Statutory guarantees in consumer transactions


(1) Correspondence of goods with description (2) Acceptable quality (3) Suitability for a consumers purpose (4) Correspondence with samples (5) Good title and quiet possession Guarantee that the supplier will have the legal right to dispose of the property when the time comes to pass ownership to the buyer Guarantee that the consumers right of ownership to the goods will not be disturbed by third parties with competing claims to those same goods [guarantee of undisturbed possession]

Guarantee that goods sold to a consumer are not subject to any security, charge or encumbrance that was not disclosed in writing at the time of sale. Nor may the goods be made subject to any such security after the sale but before title is transferred to the consumer. (6) Availability of spare parts and repairs for a reasonable period (7) Express warranty

(III) Unsolicited consumer agreement (IV) Safety standards Trespass to Land


In an action for trespass to land, the plaintiff does not need to prove any actual harm, damage or loss as a result of the defendants intrusion.

Deceit
Plaintiff must firstly prove that the defendant made a representation knowing it was false or with reckless disregard for the truth Plaintiff must also prove that the defendant intended the plaintiff to rely and act on the statement, and that s/he actually did so.

Negligence
Requirements: (1) The defendant owed the plaintiff a duty of care Harms are reasonably foreseeable Relationships that give rise to a duty of care e.g. manufacturer and consumer (2) The duty of care was breached by the defendant (3) As the result of the defendants breach, the plaintiff suffered some loss or injury that was not too remote.

Apparent authority
If the principal has represented in some way to third parties that the person they have dealt with is an authorized agent, and a third party has relied on it when dealing with the agent, so that they would suffer a detriment if the authority were later denied, then the principal is not permitted to deny the agents apparent authority. Its also sometimes referred to as ostensible authority or authority by estoppel. When apparent authority exists, the principal will be bound by the acts of the agent, even if these acts were in fact prohibited by the principal.

Ratification of Previously Unauthorised acts

An undisclosed principal is not entitled to ratify an unauthorized act. Ratification is only permitted when the third party is aware that the person they are dealing with is acting as an agent, and when the principal is either identified or identifiable as a particular person. A principal cannot, by ratification, give validity to any transaction for which the principal lacked capacity for, or which was for some reason legally void, either at the time that the transaction was entered into, or at the time of ratification.

(1) Even though the agent intended to act on behalf of his principal or company, without disclosing that he is acting on behalf of others, it would be assumed that the agent intended to be personally liable to the contract. Once the existence of the principal becomes known, the third party has a choice whether to enforce the contract against the agent or the principal. (2) An agent might disclose that they are acting for a principal, and expressly or impliedly guarantees that they have been given the authority needed to enter into the transaction on behalf of the principal. If it turns out that, despite giving this guarantee, that in fact they have no such authority, the agent may be liable in contract to the third party for a breach of their warranty of authorityliable for losses flowing from that breach