Issue
The issue is to check whether George can initiate an action against Anita or not to breach the contract.
For a valid contract, some elements must exist there. An agreement is a prior stage of a contract and remains only agreement always if the mandatory elements of a contract do not exist. In addition to valid offer, acceptance, and consideration, the intention of the parties to the contract is also an element of a contract. This is a much-needed aspect of a valid contract. For a valid contract, it is necessary that there must be an intention of both the parties to create and develop a legal relation (Smits, 2014). Both the parties must have a clear understanding that by developing a contract they want to impose some legal obligation on each other. This is the reason that agreement that people create out of affection and love with their dear and near ones cannot be developed into a contract. This can be stated that if the intention of parties to develop a legal relation is missing in a transaction then they cannot sue each other for breach of contract (upcounsel, 2018).
In the transaction that people enters into with their relatives, friends and family members, there is no intention to create a legal relationship in general. However, this is not necessary that every time, such intention is missing. One can also develop a legally bound contract with their friends or family members but there must be an intention to create a legal relation. Such intention can be expressed or implied (Surbhi S, 2017). Where parties do express that they want to develop a legal relation, there will be no question of presumption. Presumption rules will apply in those cases where parties do not expressly state that they have such intention. Now the issue is that how it will be determined that an intention exist in a transaction or not in those cases where parties do not express anything. In order to answer this inquiry, this is to say that in such cases court look after the circumstances of the case and determine that an intention exists or not. There are some circumstances where an implied intention of the parties exists. For instance, in case of commercial and business transactions, this is to assume that parties to the contacts have reasonable intention to bind each other in a legal manner and therefore a valid contract exists in between them (Gibson, 2017). In addition to this, the custom of the parties is also an important element to consider.
Rules
Partnership agreements come under the purview of commercial contracts. People generally choose this form of business with either their family members or with their friends, yet this is to assume that partners of a firm do have their intention to create legal relation. No matter that a partnership agreement is in oral or written form, it is of commercial nature and court while determining the existence of the contract assumes that the agreement has commercial nature (Colgar, 2013). Therefore, a valid contract exists there in cases of partnership even between friends and family members.
It was held in the case of Jones v Padavatton [1969] 1 WLR 328 that agreements develop between family members will remain of domestic and social nature until unless there is an intention to create a legal relationship at the end of both the parties to the case.
Now, this to state that legal obligation refers to a state where the failure of one party gives another party a right to sue the first one. In a contract, performance is the end thing to do. If any of the party denies performing their obligation in a contract then another party can bring an action for breach of contract and ask for the damages (Helewitz, 2010).
In the given case, parties to the case i.e. George and Anita were friends. They wanted to start a fast food business. The main motive was to earn money out of such business and that is a commercial purpose. Applying the provision of Jones v Padavatton , this is to say that this was not a domestic or social contract. Both the person was clear about their motive. Although neither George nor Anita has expressly stated that, they want to develop a legal relation. In such a situation, the rule of presumption will be applicable.
As stated in the rule section that in the cases of presumption, the court looks after the nature of the agreement, here the development of partnership was a commercial transaction. In addition to this, the solicitor was also involved in the case. As the court also check the conduct of parties, this can review in this case, that parties have instructed their solicitor to develop partnership deed including their rights and obligation. This act of both the parties makes their intention clear and it is to conclude that they both had the intention to create a legal relationship between them despite the fact that they are friends also. Later on, in the case, Anita has rushed out of contract. As nothing is given about their mutual arrangements, this is to say that George can sue Anita for breach of contract if opening up a new business in the similar locality was prevented under their contract and Anita has breached one or more terms of the contract.
Partnership Agreements
Conclusion
In order to conclude the issue of the case, this is to be stated that both George and Anita had the intention to create legal relation as they have called the solicitor and instructed him to include rights and obligation of partners. Further, a partnership deed was also there so being a commercial contract, this is to conclude that a valid contract was exited between George and Anita. Further George can bring an action against Anita for breach of contract if the establishment of a similar business was prohibited under their contract and also can ask for the damages. The claim of Anita is not a valid one.
Issus involved in the case that whether Hui has any right in against of Ashmore Office Equipment under the umbrella of Australian Consumer Law and if yes, then what kind of right he has.
Australian Consumer Law is one of the important legislation of the country. As the name implies, this law exists to protect the right of a consumer in against of manufacturers and suppliers as well. This law can be found under Schedule 2 of Competition and Consumer Act 2010 (Cth). Now the question is to check that who is a consumer as per the Provisions of Australian Consumer law (hereinafter referred as ACL/the act).
Consumer:- Section 3 of ACL states that a person will be considered as a consumer if acquires good or service
- Of value not more than $40000
- If value more than $40000 then the acquisition is for household or domestic purpose but not for a commercial purpose (Australia, 2011).
It was held in the case of Seeley International Pty Ltd v Newtronics Pty Ltd. [2001] FCA 1862 that in those cases where a person acquires goods or services even for the commercial purpose he/she will be considered as a consumer if the value of such goods/services is less than $40000. This is necessary to state that a person who falls into the category of the consumer can initiate an action under ACL.
Consumer Guarantees
These are the promises, which always exist in a transaction of sale of goods and services in Australia. Whenever a consumer acquires some goods or services then it is assumed that the same has given some guarantees under such transaction by the seller or goods or proved of services, these guarantees are also applicable and impose on the manufacturer of goods. This is to be stated that ACL provides these guarantees to the consumer. No matter what has contracted between consumer and supplier, the consumer will always be blessed with these guarantees. In addition to this, a supplier/manufacturer cannot impose any condition that prevents a consumer to use these guarantees against him/her.
Impact of Contract Breach
Section 51 is one of the act states one of the important consumer guarantees that is a guarantee of title. The title refers to the right on goods. This section says that a business who is selling goods to the consumer must have a good and proper title on goods (Sise, 2012). This is very general that a person with no title of goods cannot further transfer the same to others. Therefore, under section 51 of the act, it is required on the part of the supplier of goods to only transfer those goods on which he/she has a complete title. The guarantees are also applicable to second-hand goods.
Remedies: – In those cases where a supplier become fails to provide goods according to guarantees mentioned under ACL, the consumer can ask for the remedies. The remedies will depend on the circumstances of the case. Further, if a guarantee breach leads to an issue of major failure then it will depend on the consumer that he/she can choose one remedy out of the refund, replacement or compensation. A major failure will be there when the consumer would not purchase the goods if was aware with actual circumstance (Legal Vision, 2016).
In the case of Rowland v Divall [1923] 2 KB 500, a car dealer purchased a car from the defendant, painted the same and further sold the same to a customer. Two months after the sell, police has stated that the car is stolen and further returned the car to the original owner. The purchaser of the car (customer) brought an action against the car dealer and therefore the dealer had to return the value paid by such person in consideration of car. The car dealer brought an action against the defendant to sell a car with a bad title. It was given in the decision that the defendant was not the true owner of the car and hence is liable towards claimant. Further, it was also held that the claimant was not entitled to receive compensation for the expenses that he has done in order to paint the car (E-Law Resources, 2018).
In the given case, Hui purchased a second-hand computer from Ashmore Office Equipment. Hui has purchased the computer for $500 and also made some further expenses worth $95 on the same. As stated under section 3 of ACL, Hui is a consumer here because the purchase value of goods is less than $40000. Further, he has purchased the computer for a domestic purpose. Being the supplier of the computer Ashmore Office Equipment owed some guarantees towards Hui in the case.
Application
According to section 51, Ashmore Office Equipment was liable to provide a computer with a complete and good title to Hui. After three months of purchase of the computer, police arrived and claimed that the computer he acquired from Ashmore Office Equipment is stolen one, and returned the same to the actual owner. By selling a computer with the incomplete and defective title, Ashmore Office Equipment has breached the guarantee under section 51 of ACL. Hui being a consumer can bring an action against Ashmore Office Equipment. If Hui was aware of the bad title of Ashmore Office Equipment, he might not have purchased the same. It is established that a major failure in performance of guarantee is there. He can claim for refund/replacement/compensation to Ashmore Office Equipment, as it is a major failure.
Applying the provision of Rowland v Divall, Hui cannot demand the expenses that he has further incurred on computer i.e. $95.
Conclusion
Hui is a consumer of the case. He has received goods of bad title and therefore the supplier of goods i.e. Ashmore Office Equipment did not provide a guarantee of title under section 51 of ACL. Hui can bring an action against Ashmore Office Equipment to get a replaced computer or to get a refund. He can also claim for compensation but cannot ask for the further expenses that he has made on the computer.
References
Australia. (2011) Australian Competition and Consumer Legislation 2011. Australia: CCH Australia Limited.
Colgar, T. (2013) Turkey: The Term Business Partnership And The Legal Status Of Business Partnerships. [online] Available from: https://www.mondaq.com/turkey/x/250906/Corporate+Governance/The+Term+Business+Partnership+And+The+Legal+Status+Of+Business+Partnerships [Accessed on 13/09/2018]
Competition and Consumer Act 2010 (Cth)
E-Law Resources. (2018) Rowland v Divall [1923] 2 KB 500. [online] Available from: https://www.e-lawresources.co.uk/Rowland-v-Divall.php [Accessed on 13/09/2018]
Gibson, A. (2017) Business Law. Melbourne, Vic : Pearson Australia.
Helewitz, J., A. (2010) Basic Contract Law for Paralegals (6th ed.). New york: Aspen Publishers Online.
Jones v Padavatton [1969] 1 WLR 328
Legal Vision, (2016) What are the Consumer Guarantees? [online] Available from: https://legalvision.com.au/what-are-the-consumer-guarantees/[Accessed on 13/09/2018]
Rowland v Divall [1923] 2 KB 500
Seeley International Pty Ltd v Newtronics Pty Ltd. [2001] FCA 1862
Sise, P. (2012) Consumer guarantees for the supply of goods: the manufacturer’s or supplier’s problem? [online] Available from: https://www.claytonutz.com/knowledge/2012/october/consumer-guarantees-for-the-supply-of-goods-the-manufacturer-s-or-supplier-s-problem [Accessed on 13/09/2018]
Smits, J., M. (2014) Contract Law: A Comparative Introduction. UK: Edward Elgar Publishing.
Surbhi S, (2017) Difference Between Express Contract and Implied Contract. [online] Available from: https://keydifferences.com/difference-between-express-and-implied-contract.html [Accessed on 13/09/2018]
Upcounsel. (2018) Intention To Be Legally Bound: Everything You Need to Know. [online] Available from: https://www.upcounsel.com/intention-to-be-legally-bound [Accessed on 13/09/2018]
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