The section applies to a factory where production of goods is taking place for sale. But according to literal interpretation by International Aid Limited, they are not operating a factory, as the goods are not sold also the tipping of solid paint chips into the stream does not infringe section 14. A literal meaning is not going to serve the purpose of the act as by applying a literal rule the factory might escape the penalties applied to it4. On the contrary, if we apply the mischief rule to interpret the act then we have to see that this act is passed for a reason, which is to control pollution in the streams5. In the present scenario the production of tractors is taking place and people are employed for the same, also the tipping of wheelbarrow full of solid paint chips is done once a week.
I do regard this against the Anti Pollution Act because even if the goods are not produced for sale, still there is a production going on like normal factories and the tipping of solid paint chips is polluting the creek. This is the responsibility of International aid Limited to use the plant implemented by them for waste-disposal.
4 L. Griffiths, G. Heilbronn, D. Kovacs, P. Latimer, T. Pagone, R. Tucker, Introducing the Law, (4th ed,
1993) 424-429.
5 DC. Pearce, Statutory interpretation in Australia (2nd ed, 1996) 14-22.
Therefore I suggest that Pollution authority should interpret according to mischief rule and impose the fine on International Aid Limited for going against the act as the act is simply made to stop pollution in the streams.
Question 3: Are on-line agreements legally binding? Does the web page constitute an offer in contract law? If ‘e-buy’ wishes to incorporate terms and conditions in any contract with potential customers visiting its web pages what will be the most effective means of incorporating them? Explain your answers.
Online agreements are legally binding only if they fulfill the certain conditions. For a contract to be legally enforceable it should be an agreement between two or more parties, an intention to be legally bound and must be a valuable consideration6.
It should also adhere to the Electronic Transaction Act which enables signatures to achieve ‘functional equivalence and ‘media neutrality’7. In the above-mentioned case, there is an agreement and an intention between ‘e-buy’ and John as there was an offer, an acceptance and consideration from both sides, in the form of computer and money. Also the procedure involves finishing the deal through paperwork and not through electronic media, which acts a legal tool in the contract. Thus the contract between ‘e-buy’ & John fulfill the prerequisites and we can say that online contracts are legally binding.
The web page initially does not constitute an offer because it is an advertisement that simply means it’s an invitation to treat. An invitation to treat becomes a contract when John offers a price that is accepted by ‘e-buy’. It is legally binding because John is supposed to download the order form and send back with all the details including credit card.
6 P. Quirk, J. Forder, Electronic commerce and the law (2nd ed, 2001) 59.
7 Ibid 101.
If ‘e-buy’ wishes to incorporate terms and conditions in any contract, the most effective ways should be adding them to the web page and the order form. The terms and conditions should be made a part of web page where the customer cannot go further in the contract till the dialogue box is not scrolled down and clicked on “I agree” button8. Also as it is necessary for the customer to download the order form, adding a page exclusively for terms and conditions that require signature of the acceptor helps in a better incorporation of terms and conditions; because reading of terms and conditions can be avoided in the web page but cannot be avoided when it requires signature of the acceptor.
Question 4 “While one result of the failure of traditional contract law to respond to new marketing and other business practices was the growth of legislation such as trade practices act, another response was the expansion of non-contractual doctrines, such as tort.” Explain what is meant by the statement.
The results of the failure of traditional contract act includes trade practices act and torts. One of the causes for its failure was that courts had never developed rules for inequality of bargaining power, rather to assist and protect consumers9.
Trade practices act, or as it may be abbreviated, the TPA aims at prevention of unfair consumer practices10. It deals with unfair business practices engaged in by supplier of goods and services. It also includes “Unconscionable conduct”, as defined by court a decision, which is “the unwritten law, from time to time, of states and territories”11.
8 C. Vanderstaay, 20037 Law for Management: Study Guide, (2005) 2-11.
9 L. Griggs, E. Clark, I. Iredale, Managers and the Law: A Guide for Business Decision
Makers (2nd ed, 2003) 94.
0 Ibid 100.
1 Ibid 111.
TPA prohibits a corporation or other persons from engaging in unconscionable conduct in relation to the supply of goods or services. Thus TPA aims to overcome the inadequacies of the traditional contract act by providing fairly comprehensive coverage of business practices impacting adversely on consumers12.
Tort law has helped in coping up with the inflexibility and unresponsiveness of the traditional contract act towards the needs of modern business. Traditional contract act did not recognize any liability or responsibility until there was a legally enforceable contract between the parties, thus another response besides TPA was the expansion of non-contractual doctrine such as tort13. Intentional tort, negligence, breach of statutory duty and strict liability form basic elements of tort.
Intentional torts are the cases of trespassing, assault and battery, false imprisonment and trespassing of ones goods14. The case of Ebay Inc. V Bidder’s Edge Inc. 100 F Supp 2D 1058 (2000) proves that the traditional contract law didn’t cover the modern aspect like Trespassing through websites, where website is the means of business15.
The cases where there is no contract between two parties, negligence takes cares of protection of person, property or economic interest from damage caused by another person’s failure to take reasonable care16. As a result in the case of Donoghue V Stevenson (1932) AC 562 the court held manufacturer liable to the consumer because of the fact that there was negligence in manufacturing of product, even though there was no contract between them17.
2 P. Gillies, Business Law, (9th ed, 1999) 572.
3 L. Griggs, E. Clark, I. Iredale, Managers and the Law: A Guide for Business Decision
Makers (2nd ed, 2003) 94.
14 Ibid 116.
15Ibid 118.
16 Ibid 118.
17 Ibid 118.
Breach of duty states that once the duty of care has been shown to exist, the focus of attention shifts to the issue of whether the defendant breached his duty that is whether his/her conduct was negligent. A defendant, whose conduct falls below the acceptable standard of care, is by definition negligent18.
Lets take the case of Rogers v Whitaker (1991) 23 NSWLR 600, where a medical practitioner was found to have been negligent in failing to advice the patient as to the risk of a proposed operation, designed to improve the sight of one eye. The other eye was good but she was not advised the potential complications involved in the operation. But she finally developed that condition and became blind and due to the fact that he had not told the patient court held the surgeon responsible by showing negligence on his part19.
Thus tort law with Trade practices act has proved itself far better than the traditional contract act in coping up with the modern business trends.
Question 5
- No contract was formed
The reason for this answer is the rule of counter offer. In this contract there was a consideration, an intention, offer but no acceptance moreover making a counter offer leads to rejection of offer. Rejection of an offer is usually in express terms, however it need not be as explicit as this since the law is that the making of offer is to be regarded as a rejection to original offer.
In this situation TrustUs Real Estate Co. made an offer of $500000, which was counter offered by Harveys Retailers at $450000. When Harveys did not get the response the agreed to buy the land at $500000 but then again go$500000 assuming that the original offer is still open to them. But Harveys cannot hold them on to the original offer as it was already countered by them and under all circumstances a counter offer leads to rejection of offer.
8 P. Gillies, Business Law, (12th ed, 1999) 85.
19 Idib 86.
It was decided by the court in case of Hyde v Wrench (1840) 3 Beav 334 that the offer had been rejected by the counter offer and once rejected, cannot be accepted. Hyde made a counter offer and also tried to accept an offer which he had previously rejected20. Keeping in mind the above case I conclude that in the problem, the original offer got rejected thus there was no contract between TrustUs Real Estate Co. and Harveys Retailers.
- Effectively revoked by telephone
Until the offer is accepted, the offeror is under no legal obligation in regard to it. To be effective, notice of the revocation must actually reach the offeree prior to acceptance and should reach through a reliable source21.
In this case Alexander had phoned Bernard informing him that the offer was revoked, before the offer could be accepted. Thus, Bernard cannot hold Alexander for the contract because before the offer could be accepted the offeree took it back and the revocation was communicated to Bernard in time.
In the case of Routledge v Grant (1828) 4 Bing 65322 the court decided that there was no contract between the parties. However if the offer was backed by a valuable consideration then the offeror cannot withdraw the offer until the time lapse or offer is rejected. In the given case the offer is not backed by a consideration nor it is revoked after acceptance, thus revocation of offer by Alexander on phone is legally right and has to be considered by Bernard. Whereas in case of Byrne and Co v Van Tienhoven and Co (1880) 5 CPD 34423 the court decided that the offer cannot be revoked because the withdrawal of the offer came later by post whereas it was already accepted and duly notified by the offeree.
20 D. Khoury, Y. Yamouni, Understanding Contract Law (5th ed, 1998) 44.
2 Ibid 46.
22 A. Gibson, S. Rigby, G. Tamsitt, Commercial Law in Principle (2nd ed, 2003) 33.
23 D. Khoury, Y. Yamouni, Understanding Contract Law (5th ed, 1998) 44.
- B spends both time and money in studying and analyzing the offer.
In this case we have to consider the aspects covered in definition of a consideration, which says that consideration is simply something of value, given in return to promise made. It can be doing of act or refraining from doing an act, or agreed price of the promise24. Also the consideration may be a benefit to the promisor or a detriment to the promise25.
While analyzing the given case we can see that there is an offer made from A to B, the option (iv), which says B, makes a promise that benefits A, here there is an acceptance, intention and consideration where the promise is benefiting A.
In option (iii) the consideration is satisfied by B as he is performing the act requested by A which simply means that the act performed by B is benefiting A thus it is a valid consideration. In option (ii) B is again making a promise, which is a legal detriment to him, now this option satisfies the above-mentioned criteria where particularly with the unilateral contracts, the promisor obtains no specific benefit but promisee is put out or otherwise suffers some sort of detriment in reliance on the promise26.
While in the (i) option B spends both time and money in studying and analyzing the offer, this is not satisfying the criteria for consideration. In this case A is not benefiting in any way thus it does not satisfies the consideration requirement for a contract.
24 D. Khoury, Y. Yamouni, Understanding Contract Law (5th ed, 1998) 57.
25 S. Graw, An Introduction to the law of contract, (2002) 109.
26 Ibid 109.
- X writes to the buyer offering to sell the house for $550 000 and states the offer will be irrevocable for 10 days if the buyer will pay $1. The buyer pays $1.
In the above case only option (iv) is enforceable because the buyer is paying a considerable amount to X to keep the offer irrevocable for 10 days. Also it is enforceable because X cannot revoke his offer as the buyer has paid him to keep the offer open for him only. Now, no matter X is getting a better deal from someone else, he cannot revoke the offer until buyer rejects it. In other cases consideration is flowing from seller to buyer but nothing is going back to buyer but in this case it is flowing in both directions.
The reason for the above option is that the condition to pay consideration for keeping an offer open for a stipulated period of time would be considered as a separate offer and by accepting that offer & providing consideration for that offer, it generates a separate contract27. As a result in the above problem, the offer open for the sale of X’s house for 10 days would be considered as a separate offer as a consideration of $1 is given for that by the buyer.
Thus the payment of $1 binds the seller and buyer into a legal contract where the seller cannot sell the goods before 10 days expires or till the buyer rejects offer.
Question 6 (a) Tender
Advertisements calling for tenders are invitations to treat and the person who submits the tender is the offeree. Then the person who invites the tender is then free to accept or reject it28. There is a big difference between offer and invitation to treat; it is an invitation to others to make offers. In the given problem ABC Pty. Ltd. had responded to a tender, which simply means that they had made an offer.
27 D. Khoury, Y. Yamouni, Understanding Contract Law (5th ed, 1998) 29.
28 Ibid 27.
The offer was thus accepted and a delivery of goods was made due in the next week. But then ABC Pty. Ltd. found out certain mistakes in the offer and wanted to revoke it whereas the first rule of revoking the offer states that the offer cannot be revoked once it is been accepted29.
Now in the given case the offer was not withdrawn before acceptance, thus according to law there is a legal contract between them and they have to be bound to it. Therefore it is a responsibility of ABC Pty. Ltd. to perform according to the contract else they can be sued for breaching the contract. The calculation mistake of the accountant is not a reason in revoking the contract as it is already accepted. Thus a calculation mistake is not a responsibility of the accepter of the offer, it was the duty of the offeror to check the offer before offering.
In case of Routledge v Grant (1828) 4 Bing 65330 Grant was offered to buy Routledge’s house and that the offer was open for six weeks whereas Grant withdrew the offer that caused Roultage problems and he sued Grant. The decision made by court held that the offeror is entitled to revoke an offer any time before it is been accepted. But in the given case ABC Pty. Ltd. wants to revoke the offer after it is been accepted, which according to law is unacceptable. Thus they have to obey the contract and supply the stationery on the specified date no matter they found out calculation mistakes and due to which they have to bear losses.
(b) ‘Subject to contract’
In the given case, Tom and Carolyn agree immediately to buy the house at the advertised price ‘subject to contract’. Now, ‘subject to contract’ may belong to three classes: in the first case, the parties have reached finality in arranging all terms of their bargain and intend to be immediately bound to them but at the same time propose to have the terms reinstated in a fuller form31.
29 D. Khoury, Y. Yamouni, Understanding Contract Law (5th ed, 1998) 46.
30 B. Sweeney, J. O’Reilly, Law in Commerce (2001) 78.
31 R. Vermeesch, K. Lindgren, Business Law of Australia (8th ed, 2001) 139.
In the second case, the two parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of formal document32.
In the third case in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract33.
In the first two cases it’s a binding contract whereas in the third case the terms of the agreement are not intended to have, and therefore do not have any legal binding effect of their own. Thus this question depends upon the intention disclosed by the language employed by the parties34.
Thus in order to have a contract according to the rules stated above, the acceptance towards terms and conditions is shown from both the sides. Lets see the case of Masters v Cameron (1954) 91 CLR 353 35 the court decided that the parties were doing the formal requirements governing the sale of land which shows no intention to be immediately bound as and that their was not contract between them.
Thus we conclude that the act done by Tom and Croyton would not be considered as an acceptance and that there is no contract between them. And to have a contract they have to go to the seller and offer him a price, if accepted they have to get legally bound through certain terms and conditions.
32 R. Vermeesch, K. Lindgren, Business Law of Australia (10th ed, 2001) 39.
33 Ibid 139.
34 Ibid 140.
35 Ibid 140.
References
CQU, Law forManagement20037, Division of teaching and learning, 2005.
Gibson, A, Rigby, S & Tamsitt, G, Commercial Law in Principle (2nd ed, 2003).
Gillies, P, Business Law, (9th ed, 1999).
Griggs, L, Clark, E & Iredale, I, Managers and the Law: A Guide for Business Decision
Makers (2nd ed, 2003).
Graw, S, An Introduction to the law of contract, (2002).
Khoury, D & Yamouni, Y, Understanding Contract Law (5th ed, 1998).
Pearce, D C, Statutory interpretation in Australia (2nd ed, 1996).
Pentony, B, Graw, S, Lennard, J & Parker, D, Understanding business law (2nd ed, 1999).
Quirk, P & Forder, J, Electronic commerce and the law (2nd ed, 2001).
Srivastava, D K, Deklin, T & Singh, P, Introduction to Australian law (1996).
Vanderstaay, C, 20037 Law for Management: Study Guide, (2005).
Vermeesch, R & Lindgren, K, Business Law of Australia (10th ed, 2001).
Case Law
Currie v Nisa (1875) LR 10 Exch 153.
Donoghue v Stevenson (1932) AC 562.
EBay Inc. V Bidder’s Edge Inc. 100 F Supp 2D 1058 (2000).
Galvin v Klimpsch (1982) 2 BPR 9468.
Hyde v Wrench (1840) 3 Beav 334.
Masters v Cameron (1954) 91 CLR 353.
Re Tracey; Ex Parte Ryan (1989) 166 CLR 518 at 580 the judge Deane J.
Routledge v Grant (1828) 4 Bing 653
Madhu preet Kharbanda
Student ID: S0068694
