Reference no: EM132064922

Question One

On 25 November, the following advertisement appeared in the newspaper:

"Boast Sound system; model BS100 for sale for $2,000. This is half the price you will normally pay for such a set. Hurry, as there are only ten units for sale. Contact High Five Systems at 9777 0000 to place an order or walk in to our store at 112, Speaker Street, Handenong to purchase."

Jacob called up the phone number in the advertisement on the very same day and spoke to Rhonda, one of the salespersons at High Five Systems. He said, "I accept your offer and I will come in to pay and collect the set tomorrow." Rhonda tried to explain something to him but Jacob put the phone down before he could hear her explanation.

Iris called High Five Systems on 25 November to place an order but could not get to speak to any of the salespeople. She left a message on the answering machine saying, "If I do not hear back from you on this matter, I assume you will be selling me two of your sets at the price you advertised." The staff at High Five Systems only heard this message on 28 November.

Hamid went to High Five Systems on 26 November and enquired whether he could put the set on layby and settle the full payment amount a month later. Rhonda told him that she would have to check with her boss first. Since the boss was not in, she told Hamid that she would call him later and inform him of this. The boss did not return that whole day and only came in the afternoon of the next day. She checked with the boss the next afternoon but he said that they did not accept laybys. Rhonda called Hamid back and informed him of this. Hamid then said that it did not matter and that he would come in the next day to make the payment and collect his set. Rhonda then informed him that Jimmy had already sold off all the sets that morning. Hamid insists that since he had accepted the offer a day earlier, one set should be sold to him.

Ranbir walked in to High Five Systems on 27 November in the morning and placed an order for all the 10 sets. Jimmy, another salesperson, told him that he was not sure if there were any sets left but said that if they were still available, he would have them sent out to Ranbir in the evening.. The delivery company collected the 10 sets from High Five Systems that evening so that they could be delivered to Ranbir. Before the sets could be delivered to him, Ranbir called High Five Systems and cancelled his order. A little while later, the sets were delivered by the delivery company to him.

Advise each of the parties of their rights in Contract law.

Question 2

Assume that the sets above were sold to neither of the persons mentioned in part (a) and that they were sold to Brian. When Brian received the sets, he also noticed a document that was sent with the Boast Sound systems. The document had the following clause:

"No warranties or guarantees are made in relation to the efficiency of the operation of the sound systems and suitability for purpose."

Brian thought this was odd but figured that there should not be any issue with the sets. Two days after using the sets in his educational institution, he found that five of the sets functioned at a very low volume that could hardly be heard by anyone. Brian did tell the salesperson at High Five Systems prior to purchasing that he needed a system that could be used in an educational institution that had classes with 100 students.

When Brian made a complaint about this, he was told by High Five Systems that they would not do anything about it and referred him to the clause they had sent out with the goods. Furthermore, they stated that this was probably a manufacturer's defect and that he should contact Boast Australia instead.

Advice Brian if he has any rights under Australian Consumer Law against High Five Systems and Boast Australia.