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Contract and Consumer Law

INTRODUCTION

Contract and Consumer laws are the most significant statutory laws in order to regulate the functioning of an organisation. A contract binds the parties to work according to the terms and conditions of what they agreed upon. On the breach of contract parties are liable for some remedies and the one who breaches are penalised under relevant laws. In order to start a business or partnerships a contract is must to be constructed between the parties, it is a medium of agreement of the terms between them, for the smooth flow of their business (Bagley, 2010 ) .

Similarly, Consumers are the ones for whom a business is being established, so it is necessary to take a good care of them. And for that purpose there are various statutory duties than an organisation has to follow.

This report is about the analysis of Contract and Consumer laws with the help of several judgements of an appellate court so as to identify the legal matter and cause of action, issue of an appeal and the precedents given in a judgement.

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Task

Analysis of a major judgement of appellate court

In order to analyse the judgements made by court it is necessary to understand the contract and consumer laws in Australia. Contract laws in Australia are mostly taken from English contract law, so it has a basic definition as of, an agreement which is enforceable court. A valid contract has certain essential elements, an offer, acceptance, a consideration and intention of forming a contract.(Bodie, Kane and Marcus, 2014)

An offer is the first and foremost step for the initiation of a contract, it is made by the party to do an act according to some terms and condition. For an offer there is an acceptance, which has to be made by another party, also there can be certain conditions made by the party who is accepting such offer, known as counter contract. For every contract there must be a valid consideration. Valid means, it should not be prohibited by law. Also there must be an intention for constructing a contract, without it a contract is null and void. The law of contract in Australia has the essence of English Law of Contract, and it is similar to the provisions of the contract act of UK. Also it is implied by the common laws as the development of the contract law lies within the Federal Courts.

Australian consumer laws are in context with the Competition and Consumer Act 2010. it regulates the anti competitive practices and safe guard the interest of its consumers. There are certain Acts too which is implied for the protection of customers, Fair Trading (Australian Consumer Law), 1992 , Fair Trading Act 1987, etc.(Crane and Matten, 2016)

In order to promote competition, fair trading and to provide safeguard to the consumer, the Competition and Consumer Act 2010 was established. Under this act and Trade Practices Act 1965. Australian Competition Tribunal was formed, whose function was to perform his power to review the original decision. But the appeal regarding consumer rights can be made in Federal Court of Australia.

ACCC v Coles- Supermarket found to be indulged in unethical conduct under Consumer Law

ACCC found the unconscionable conduct by the Coles under the ACL, the question was regarding “Active Retail Collaboration” programme according to which Coles were managed to obtain $12 million in payments , as a rebate return to Coles for “profit gaps”, squander and penalties for the shortage or delayed deliveries by suppliers.(DiMatteo, 2010)

It was accepted by the Coles that here doing was unethical and they agreed upon the judgement by the tribunal. The judgement was highly censorious of Coles, explaining their conduct, demands and threats ad “deliberate, orchestrated and relentless”. It was decide by the judge Gordon that the conduct was highly unethical, according to section 104 of the act, because they use their bargaining power in a wrong way and treated their suppliers in a way that was not consistent with social and business standard, applying to a commercial dealings. Also they threaten to their suppliers of doing harms if they do not comply with the demanded payments, in course with it they withhold the amount of their suppliers which they are not entitled to.

The court ordered Coles to pay the economic penalty of $10 million and amount, also to refund $12 million which they collected from ARC program. In the course of the decision, they agreed upon becoming a signatory to the Food and Grocery Code of Conduct.(Eren and et. al., 2012)

Frumar v Guilfoyle Developments Pty Limited, 2014, NSWCA 225 (15thJuly 2014)

The parties involved in this case were Geoffrey Craig Frumar who was an appellant and Guilfoyle Developments Pty Limited as a respondent. The parties entered in to a contract on 20thNovember 2009 for the purchase “off-the-plan” of a strata unit for $3.3 million. The respondent filed a petition against the appellant for the breach of contract, claiming the damages for it. The judgement was given in the favour of the respondent by Judge Nicholas and an award to the damages of around $159,000 was given by liquidating the organisation.(Foss and Knudsen, 2013)

The appellant filed a petition against the judgement of the court. It was pleaded by the appellant that the parties consented to change the contract in two respects, at first instance and on the appeal. It was justified by the appellant that the contract was extended to 30thApril 2012 unconditionally and the respondent gave his consent for conducting an additional fit-out works to the unit. The appeal was dismissed by the Court of Appeal.(Grundfest, 2010)

Australian Competition and Consumer Commission v Visa Inc. 2015

It was ordered by Federal Court to Visa Worldwide to furnish an amount of $18 million for indulging in anti-competitive conduct. It was essential to authorise Australian merchants to be paid in Australian dollars but it was revealed that the cardholder were billed in their home currency. According to Dynamic Currency Conversion, it provides international card holders an option to terminate their transaction in their home currency instead of local one. But Visa Worldwide prohibited the regulation of DCC which affects it most of his costumer and was considered as malpractice of competitive authority. The court penalised the Visa Worldwide for this conduct and the appeal made by them was rejected.(Johnson, 2013)

Schwartz v Hadid, 2013, NSWCA 89

The case was based upon he construction and interpretation contract. According to it the decision was dealing with the formation and interpretation of a commercial agreement between the parties. The NSW Court of Appeal authorised the principles considered in Codelfa Construction Pty Ltd v Sate Rail Authority of NSW, 1982, according to which the court can interpret the language of the contract regarding the surroundings or on the circumstances on which the contract was constructed. (Kinicki and Kreitner, 2012)

The appeal was made by Mr. Schwartz against the judgement given by Justice McDougall, that the contract was breached by the Mr. Schwartz. It was said in appeal that the interpretation was done in wrong way. The judgement was very uncertain as it came out that it is not essential that the terms mentioned in contract is ambiguous for all the judges, it may be clear for another one.

Penalty over Energy Australia of $1.2 million over door to door sales strategies

The federal court decided that the strategy of Energy Australia of going door to door was corrupted as their agents were misleading the consumers by false and deceptive action to negotiate electricity agreements. ACCC Commissioner Sarah Court says that “Energy companies should take precautions and must take action against their sales agents for their illegal practices”.

The laws for the protection of consumers are stringent and the companies has to comply with such laws. The Fair Trading Act provided immune to the consumer regarding ill means and illegal actions of the producers.(Ye and et. al., 2011)

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CONCLUSION

The contract laws in Australia are conducted by 'common laws'. The report covers the landmark cases and their judgements which provides a view of Contract and Consumer law in Australia. The laws of contract are generally inspired by English Contract Laws.

This report provides the extensive study of judgements made by the appellate authority for the breach of contract, interpretation of contract, misuse of anti-competitive conduct and unethical conduct by the parties regarding a contract.

From the above analysis it is clear that Australian laws are such an extensive law which regulates its bodies with a proper strategy and it is binding upon its citizen. Also it provide safe guard to its consumers from the unfair acts done by its producer.

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REFERENCES

  • Bagley, C.E., 2010. What's Law Got to Do With It?: Integrating Law and Strategy. American Business Law Journal. 47(4). pp.587-639.
  • Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
  • Crane, A and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
  • DiMatteo, L.A., 2010. Strategic contracting: contract law as a source of competitive advantage. American Business Law Journal.47(4). pp.727-794.
  • Eren, S.S and et. al., 2012. Caching message fragments during real-time messaging conversations. U.S. Patent 8,255,473.
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