Reference no: EM13230281

Andrew, the Managing Director of Andrew & Co, recently entered into a contract of $100,000 with Logitech Pty Ltd for 10 computers at $10,000 each for use by senior staff. Andrew & Co had developed expensive software and spent $90,000 in the development. In negotiations to buy 10 computers, Logitech promised Andrew that the computers could easily run that software. The two parties signed a standard form of contract but there was no mention of that requirement. Further, the contract had a standard whole of agreement clause: that the written agreement was the entire agreement between the parties. The standard form contract also contained an exclusion clause as follows:

Clause 5- Exclusion Clause: Logitech is not liable to the purchaser (Andrew & Co) for any loss or damage due to the failure of the computer equipment supplied to run any software which is also not supplied by Logitech.

When Andrew asked about the effect of Clause 5, Logitech told him that it was a standard industry wide clause designed to exclude liability for the failure of computers supplied to run illegal software as well as free software that was often of poor quality.

After delivery, the 10 computers performed very poorly and each required a $3,000 upgrade ($30,000 in total) to bring their performance up to an average standard. Andrew & Co spend $5,000 investigating the problem and also lost $20,000 in business income due to the computers poor performance and losing data.

Required:

Answer the following question with reference to the common law principles of contract law supported by cases and relevant legislation.

(a) Can Andrew & Co sue Logitech for breach of their contract?

(b) What is the effect of the Clause 5 : Exclusion clause?

(c) Can Andrew & Co sue Logitech for misrepresentation? What remedy would it be likely to obtain under the Australian Competition and Consumer Act (2010)?