Contract Formation and Validity in the First Case Study
Contract law helps in encompassing different regulations and laws that enforces promises between two or more parties. A contract is developed almost every day when people enter into a contract while buying a coffee or filling up the tank of a car with petrol or even purchasing a ticket for transport. The contract law mostly focuses primarily on the common law of contract which is divided into five major categories.
First is contractual formation, second is understanding the scope and the overall content of the contract, third is avoiding any form of contractual obligation, forth is performance and termination of any form of contract, and fifth requires remedies for contract breach (Schwenzer, et al., 2012).
In this case the formation of contract law has been analyzed with the case study relevant to the purchase of a vintage dress from an online retailer called Secondhand Rose by Annabelle in Australia. As per the consumer law of Australia, information related to unfair terms in consumer contract, consumer guarantees, unconscionable conduct and liability from manufacturers are discussed. But in this case only terms and conditions relevant to contract law in Australia has been analyzed.
Contracts in Australia are created among two or more parties when an offer is provided and the offer is accepted by the other party (Swain, 2012). Contract can only be legally enforceable if there is a clear term of offer from one party, if there is the acceptance of offer from the other party, if consideration like cash has been paid between the offeror and the offeree, mutual intention that both the parties are agreed to legally enforce the contract, if the terms of the agreement are certain in nature, and if each party has sufficient capacity in relation to the contractual agreement (Hogg, 2011).
In this case the two parties involved were firstly Anabelle who wanted the vintage dress and the second party was second hand Rose Private Limited, an online vintage dress retailer who sold the red vintage dress to Anabelle in Australia. As per the emails which has been corresponded, Annabelle got to know about the vintage dress offering by second hand rose and she asked the company related to buying the dress. For the interest shown by Annabelle, second hand Rose said that as a special introductory offer to new customers was $450, and this price would be the last consideration which would be liable to pay by Anabelle to the company. However, upon a confusion related to the sizing, Stephano the agent from second hand rose spoke to Anabelle regarding the policies. After talking with the bride related to the type of dress, Annabelle talks with Stefano, and agrees to pay the price of $450 upon a confirmation email and also via telephone. As per the different emails a clear offer had been made by one party and the other party has also accepted the offer (McKendrick, 2014). A consideration of $450 has been paid by the offeror to the offeree. Mutual intention from both the parties to agree with the legal enforcement is present. Terms and conditions page has been emailed to the customer as per the agreement. Each party also has sufficient capacity to enter into contractual agreement, as the company has been opened to sell their products and wares to different customers, and Anabelle also has the mental, physical and financial capacity to enter into a valid contract to buy the dress from online (Klee, 2018). As a result, a valid contract was formed by Anabelle and second-hand Rose Private Limited. As per the Contract, the dress has been bought by Anabelle and has been utilised by Annabelle.
Contract Formation and Validity in the Second Case Study
Again as per the valid contract rules, an offeror must offer the terms of a contract, and an offeree must be able to accept the offer. Consideration needs to be paid via cash or kind, and there must be mutual intention for legal enforceability of the contract (Chen-Wishart, 2012). The terms of the agreement must be certain and every party should have sufficient capacity to enter into the valid contractual agreement. A special arrangement was provided to Anabelle by second hand Rose where the dress will be sent to Anabelle to try on if she can provide 1000 followers in the Instagram account of second hand rose. Annabelle on the other hand has said that she can arrange 1000 followers easily and to send the dress to unit 320/ 450 Elizabeth Street Melbourne 3000. although an offer was made by first party in order to, try on the dress after providing 1000 followers in the Instagram account. After being satisfied with the dress bought, and talking with the bride, Anabelle corresponded with Stefano regrading purchase of the dress. As a result, a contract was created to try on the dress if 1000 followers were added to the company Instagram account, and this was mutually accepted by the offeror and the offeree (Sims, 2014).
Although I can see that a contract was validly formed to sell the dress for S450, I am uncertain as to what the terms of the contract are. I need you to state clearly what the terms of the contract are, so I know whether we are legally required to refund Ms Day the purchase price.
Issue
A contract was validly formed in order to sell the dress for $450 to Annabelle. there are different terms of the contract which needs to be understood. Firstly, second hand rose mentions that by accessing their website every customer agrees to the different terms and conditions which are set by the document in the website. This shows that the company is telling customers to follow their terms and conditions page (Ryan, 2017). Secondly second-hand Rose says that, delivery is on the terms which are set by the company in the website. Full payment must be made by credit card before the item will be dispatched. In both these cases, second hand rose has first been paid by Anabelle the $4550, after which the item has been dispatched. Fourth, all the dresses are a vintage quality and therefore no responsibility will be taken by the company for fraying of fabric. Lastly the company also mentions that if the dress is not hand washed by their special laundry liquid ‘Rose fresh’ then no responsibility for shrinking or fading of fabric will be taken into account. The company mentions to wash the dresses sold, and by a liquid detergent, not mentioning the need for dry washing.
Terms and Conditions of the Contract
Rule
In an email it has also been provided to Annabelle that, the dress that she has purchased can only be dry cleaned otherwise the customer cannot compensate for any kind of damage caused by washing and the company will not be liable to pay back or replace the item in any sort. However, in a phone call which was conducted by Stefano (the representative of second hand rose) and Annabelle it can be said that, Anabelle ask the sales agent How the dress should be cleaned and Stefano mentioned that the vintage cloth is of vintage silk and needs to be washed on a delicate cycle in the washing machine using a soft detergent. this was the same things that Anabelle had done. She had washed the cloth on a delicate cycle in the washing machine utilising a wool detergent that she purchased from the supermarket after which the dress shrunk after the wash and also faded to a murky pink colour. Although the company has mentioned in the email that dry washing needs to be done, but in the terms and conditions there is no mention of dry washing, but there is a mention of hand washing with special laundry liquid Rose fresh.
Application
This actually confuses the customer with what type of cleaning needs to be done. Dry washing is a form of washing which can be done without the use of any form of liquid (Wahyuni, 2018). Handwashing which has been provided in the terms and conditions is again a form of washing and cleaning where a special laundry liquid is utilized and also water is used for washing the cloth. In a phone call with Stefano, Annabelle has also recorded the voice call that says that a delicate wash needs to be done for the vintage cloth. This information is confusing to the customer and therefore it is essential and also it is liable for the company to pay back and replace the product because of the confusing terms and conditions set.
As the term set up by the contract buy second hand Rose Red are ambiguous, this can result in a void contract depending on the type of ambiguous language identified (Bieron, and Ahmed, 2012). In this type of contract, the different languages which is used by the second-hand Rose terms and conditions are ambiguous, because in one term it mentions that it can be hand washed, whereas in the email it has been mentioned that it needs to be dry washed. Stefano the employee of secondhand Rose also mentions that it needs to be washed in water through delicate wash setting of washing machine.
Conclusion
All these terms are very ambiguous and thereby the contract is actually void because of ambiguity in interpretation and ambiguity in terms setup in the contract (Bieron, and Ahmed, 2012). In this case the contract needs to be terminated because the contract is void by the reason of mistake created by ambiguous terms in the terms and condition. Once the dress has been delivered their value should be recoverable as property cannot pass by the contract law. As employee of the second-hand Rose has created the mistake and as the employee is the representative of the company during the time of contract, the company is legally obliged to return the purchase price of the product or replace the item.
References
Bieron, B. and Ahmed, U., 2012. Regulating e-commerce through international policy: Understanding the international trade law issues of e-commerce. Journal of World Trade, 46(3).
Chen-Wishart, M., 2012. Contract law. Oxford University Press.
Hogg, M., 2011. Promises and contract law: comparative perspectives. Cambridge University Press.
Klee, L., 2018. International construction contract law. John Wiley & Sons.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Ryan, P.A., 2017. Smart contract relations in e-commerce: legal implications of exchanges conducted on the blockchain. Technology Innovation Management Review.
Schwenzer, I., Hachem, P. and Kee, C., 2012. Global sales and contract law. Oxford University Press.
Sims, A., 2014. Unfair contract terms: A new dawn in Australia and New Zealand?. Monash University Law Review, 39(3), pp.739-775.
Swain, W., 2012. Codification of contract law: some lessons from history. University of Queensland Law Journal, 31(1), pp.39-54.
Wahyuni, N., 2018. Consumer protection in Indonesia on selling buy transaction through E-commerce. Journal of International Trade, Logistics and Law, 4(1), pp.1-8.
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