Foundations Of Company And Commercial Law : Factual Situation

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Foundations Of Company And Commercial Law : Factual Situation

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Foundations Of Company And Commercial Law : Factual Situation

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Question:
Describe about the Foundations of Company and Commercial Law for Factual Situation.

Answer:

Assignment
There are few issues which are raised after analyzing the given factual situation.
Issues
Whether there is contract between Nikhil car sales Pty. Ltd. and Vanessa?

Whether Vanessa has any right under common law and what are the remedies that can be recovered by her?

Whether Vanessa has any right under Australian Consumer Law and what are the remedies that can be recovered by her?
Law
The law of contract, common law and the Australian Consumer Law are analyzed to resolve the given issues.
A contract is an agreement which is enforceable by law. An agreement comes into existence when there is an offer from the offeror and the same is accepted by the offeree. But in order to convert an agreement into a contract there must be capacity of parties to contract, intention of parties and consideration[1].
Offer – offer is the communication of offeror intention to an offeree to carry out a task with an intention of his approval.[2]
But an invitation to offer is different from offer where offers are invites by the inviter who acts like an offeree. An invitation can be made through various modes such as advertisement, tenders, auctions, displays, etc.[3]
Acceptance – The offer when confirmed by an offeree without any changes are called acceptance. An acceptance must be the mirror image of offer[4]. But, if an acceptance is made with some changes or conditions are attached to an acceptance, then, the same is known as counter offer which cancels the original offer so made.[5][6]
Consideration- the agreement is supported by some value called consideration which has existence in the eyes of law. [7]
Capacity – The parties must be major and of sound mind.
Intention – The parties must abide by the agreement legally and must not develop a domestic relationship.
Thus, the compliance of all the contract elements make a valid contract
However, whenever the parties enter into a contract by complying with the contractual element still such contract can later be rescinded if such a contract is entered by one of the party due to the misrepresentation or deception made by the other party.
The law of misrepresentation is described under common law according to which when one party makes a false representation or statement to the other party with a view to deceive such other party so that the deceived party established a contract with him then such false statement is known as misrepresented statement and misrepresentation is said to incur. The concept of misrepresentation is rightly established in Bisset v Wilkinson (1927). The various ingredients of misrepresentation are:[8]
The false statements must be relating to present and past and not future[9].
The statement of opinions is not misrepresentation[10] .
The party making the misrepresentation must be having knowledge that the statement made by him is false;
The statement must be made so that the other party is influenced to make a contract
As per the common law the party who enters into a contract on basis of misrepresentation has the right to put an end to the contract entered or claim damages[11].
Further, as per section 18 of the Australian Consumer Law (ACL), there should not be any misleading or deceptive conduct on part of a party while carrying out trade and commerce. The main ingredients are:[12]
The misleading conduct transaction must be of commercial character.
The statements which has decived the other party must be in oral or written form.
Silence can also be conoisdered as misrepresenttaion if the facts depicts so.[13]
If the deceived party is awrae of the deception then section 18 does not apply[14].
If the deception is not intentional, however, still loss is suffered by the agreived party then it will fall within the amnit of section 18 of ACL and is held in Yorke v Lucas (1985)[15].

The deception must be realted to past or present and not future transactions. However, if any future statements are made by the decieving party which the decieving party knows to be untrue then such transactions are covered in misleading statements as per section 4 of the Australian Consumer Law and is held in McGrath v Australian Naturalcare Products Pty Ltd (2008).
After considering all the relevant elemnt it is submitted that if any party is found to be incontravention of section 18 of ACL, then, there are variosu remedies that can be availed such as:
Damagges can be calimed by the agreived party under section 236 of Australian Consumer law.
The agreived party can get ancillary orders by the court as per section 243(2) of the Australian consumer law;
The agreived party can also seek refund of his money;
The agreived party caan recind the contract and calim it as void after seeking declaration from the court.
Moreover the injunction orders can also be granted by the court under section 232 to 236 of the Australian Consumer Law.
Thus, the laws which are analysed herein above are now applied to the facts of the case in order to resolve the issues.
Application of law
As per the facts of the case, Nikhil’s Car Sales Pty Ltd issued an advertisement in the newspaper stating ‘Used car sale. Unbeatable offers on 3-year old models. Low kilometres. 12-month warranty’. The vehicles include 3 model Mazda 2s priced at $9,999 drive away.
Vanessa was looking for a car and after viewing the advertisement she visits Nikhil’s Car Sales Pty Ltd to have a look at the car. She likes a yellow Mazda 2.
Now,
As per the law laid down in Pharmaceutical Society case an advertisement is an invitation to sell and any person who is interested in the advertisement must come forward to make an offer to the advertiser and an advertiser acts like an offeree.
Thus, Vanessa has made an offer @ $9,500 cash. the offer was duly accepted by Nikhil’s Car Sales Pty Ltd (offeree). A valid consideration of $9,500 cash. was provided by vanes. Both the parties are capable and intent to make a contractual relationship amid the two. Thus, all contractual elements are present and hence there is a valid contract that can be established amid the two.
But,
Though the contract is established amid Vanessa and Nikhil’s Car Sales Pty Ltd, however, Vanessa has a right under common law to rescind the contract as the contract suffers from misrepresentation.
It is submitted that when vanes took the car from Nikhil’s Car Sales Pty Ltd then there are various representations that are made by Nikhil’s Car Sales Pty Ltd which can be considered as misrepresentation. Such as:
The salesperson gave an opinion that according to him the cat is one of the best in the lot. However, as per Smith v Land & House Property Corp case mere opinion is not considered s misrepresentation.
Various other statements are also made, such as:
Nikhil submitted that the car has only one previous ownership which was true as the previous owner was a company.
Also, the odometer shows 75000 but in reality the same was 175,000 kilometres. This factual statement was made by Nikhil which was not true and the same was made to deceive Vanessa and persuade her to make a contract with him.
Thus, Vanessa has full right to terminate the contract under common law and sue Nikhil’s Car Sales Pty Ltd for damages.
Further, Vanessa also has right under the Australian Consumer Law. As per section 18, Nikhil’s Car Sales Pty Ltd has an obligation not to deceive and consumer while engaging in any trade or commerce. However, Nikhil’s Car Sales Pty Ltd did deceived Vanessa by varying the true picture of the odometer, that is, 75000 was shown which in reality was 175,000. Thus, Vanessa also has right under section 18 of the ACL and she can terminate the contract.

Conclusion
It is thus concluded that there is a valid contract between the parties. Further, Vanessa was deceived and misrepresented by Nikhil so she will be surely able to rescind the contract and have full right to claim from Nikhil both under the common and statutory laws.

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