Reference no: EM132510924

LAWS3040 Contracts - University of Newcastle

Problem-Solving Assessment

Part 1.

ISSUE: In a concise yet complete statement, what is the issue that needs to be resolved?

Part 2.

RULE: In the context of the facts of this problem, what is the applicable rule here?

Important: you should plan to write your Rule section in paragraph form, setting out and explaining each rule. (It is not enough to simply list cases, nor are simple dot points sufficient.)

Part 3.

APPLICATION: For the issue in question, how do you apply the relevant rules from your Rule section to the facts that are given to you?

Part 4.

CONCLUSION: In a short and concise (yet thorough) paragraph, what is your final conclusion? (That is, how do you summarise your entire analysis - in a clear and concise way
- showing why the relevant Rule(s) likely would - or likely would not - apply/succeed in this particular case. Don't forget to actually answer the Problem that the client has asked you!!)

Problem 1

Lilian owns and operates a catering business. In addition to herself, she has three employees. Happily, Lilian has just received an order to cater for a giant outdoor event for the University of Newcastle. (Yay!) The only problem is that the reason she's gotten this gig is because the original caterer fell through - so it's a rush-job and she only has three days to prepare everything! No problem though, Lilian knows her stuff. In order to be ready, Lilian needs to hire a small commercial van that she can use to transport her delicious meals out to the event, as well as herself and three of her employees. The timing is good because she has several other upcoming events that she'll need a van for. So, for reasons of cost and efficiency, she decides that she'll hire one for a full month.
Lilian therefore rides her push bike to Aussie Van Rentals Pty Ltd in Hamilton. On the lot, there are several vans that seem like they might meet her needs. One of them has good colours that match her logo so Lilian decides to try to hire that one. (As you might've guessed, we'll call it "the Van").
Lilian tries to speak with the owner/operator Debbie. There are a number of difficult customers already there and Debbie is very busy. While Debbie is rushing back and forth trying to help the difficult customers, Lilian and Debbie have the following quick conversation:
Lilian: I'm in a bit of a rush, but I'm very interested in the Van.
Debbie: I can definitely understand that - it's the van-of-all-vans, a real beaut', the best ever! Lilian: Can I ask you some questions about it?
Debbie: Sure thing darl', I'm happy to answer all of your questions. I just have to run help another customer, I'll be right back. But while I do that, here's some basic information.
Debbie hands a glossy A4-sized card to Lilian. On the one side of the card is a colourful picture with the same make and model of the Van, with a woman in the driver's seat showing a massive smile and giving a thumbs-up sign. On the back is the text: "SEATS 6".
Lilian can see in the Van that there are four permanent seats and two flip-up seats in the floor. She says to herself: "I only ever need to transport four people at a time - myself plus my three employees at the most. So I was looking for a four-seater. But six seats is definitely better than four!"

Lilian tries many times to get Debbie's attention again so that she can ask more questions, but Debbie keeps getting caught up in conversation with those pesky other customers. Each time though, Debbie promises that she'll come back and answer all of Lilian's questions. A half hour passes, and then an hour. Lilian looks at her watch and realises that the day is getting away from her and she has far too much to do to prepare for the upcoming event and can't wait any longer. So she goes inside to the rental counter of Aussie Van Rentals and hires the Van for 30 days for $2,500.

Lilian uses the Van for the big event for the University of Newcastle and everything goes spectacularly well. Three weeks later, however, she's been hired for another big catering event and this time she needs to bring along not only her three employees but also two volunteers. Thank goodness she hired the six-seater van! On the day though, they load the Van with their catering, but when they try to pull up the flip-seats that are in the floor, they discover that what appeared to be flip-up seats are actually only plastic covers where seats could be installed. So in reality, the Van only seats 4. Lilian is sad.

Lilian has come to you. She says: "I would like to know whether it is likely - or unlikely - that a judge would find that Aussie Van Rentals committed misleading and deceptive conduct, according to Section 18 of the Australian Consumer Law, in getting me to enter into the rental contract. [Note that Debbie is not only the owner/operator of Aussie Van Rentals Pty Ltd but also its agent, so anything that she says or does will be binding on Aussie Van Rentals - so you can treat them as one.]

Please provide me a concise answer, written in IRAC form. Limit your response to maximum of 500 words and only use the following cases:
Cases which relate to misrepresentation:
1. Krakowski v Eurolynx Properties (1995) 183 CLR 563
2. Gould v Vaggelas (1985) 157 CLR 215
3. Byers v Dorotea Pty Ltd (1986) 69 ALR 715

Cases dealing with Misleading and Deceptive Conduct:
1. Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83
2. Demagogue v Ramensky (1992) 110 ALR 715
3. Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217

Problem 2

Cassandra is 20 years old. She grew up in Southern California but moved to Newcastle a year ago, partly to escape the blistering political dysfunction of the US but mostly because her idol - the world-champion surfer, Janette Smith (better known as Janette the Surfette) - lives here.

Cassandra is a loner. The only person she really respects is Janette. In fact, Cassandra wants to be just like her. Cassandra wasn't a very good surfer, but in a weird kind of way, she's an engineering genius: she's developed a carbon-fibre surfboard that she's filled with helium, making the surfboard remarkably buoyant; at the same time, she's used a synthetic iodised wax on the underside of the board, which causes a kind of magnetisation, making the board literally stick onto waves even at insane angles. With her board, Cassandra can do absolutely stunning tricks.

One day, who should see Cassandra out doing tricks on the waves but Janette the Surfette herself. Janette is feeling really depressed (but we'll get to that in a moment). Janette paddles out to Cassandra and says to her, "Those were some mad tricks you were doing. You're amazing." Cassandra blushes, and responds:

"Aw, thanks. But it wasn't really me - just my board. I made it myself." She then tells Janette all about the surfboard's amazing qualities.
Janette is mesmerised. This is, perhaps, the worst day of her life. A film crew is coming to film her surfing over the next few days in order to make a documentary set for world-wide release. But these last few
weeks Janette has lost her mojo, it's as if her body has been taken over by evil spirits - every time she tries to ride a wave, she falls over like a beginner. It's incredibly embarrassing! But this, this high-tech surfboard could be the answer! Janette asks if she can have a go on the board and Cassandra readily agrees. Janette takes the first-best wave and ... WOW!! Janette has an amazing ride and quickly swims back out to Cassandra.

"This board is fantastic," Janette says sweetly. "So what's your deal, I hear that North American accent - what're you doing here in Newy?" Cassandra gazes at Janette for a moment. For reasons Cassandra doesn't understand, she [Cassandra] begins to cry. Maybe it's the sun, maybe it's just the sensation of floating there on the glimmering surface of the ocean with dolphins swimming slowly past nearby, but whatever the cause, something in Cassandra just collapses and suddenly she's telling Janette her whole life story. There are, for sure, the parts about her tough childhood, the difficult times, but mostly she talks about how much she idolises Janette and would do anything for her.
Janette listens and then says: "Wow, that's super-flattering. So how about if I buy this board off of you? I really need it - I mean, I think my life depends on it. I've got 500 bucks in my bag on the beach, let's ride in and I'll give it to you for the board."

Cassandra is still crying but she blinks away the tears that are splashing down into the sea. "Really, she says, you'd want to buy my board?" Janette nods eagerly. Cassandra feels warm and fuzzy inside - Janette the Surfette wants to buy her board! Cassandra knows that the board is worth at least $2000 ... but on the other hand, she's very late with $700 in rent, and she's never really cared but maybe she should try not to get evicted. Quickly she says to Janette: "Ok, you're on!" The two ride into shore, where Janette gives Cassandra the $500, takes the board (along with her own) and walks off into the glowing rays of the setting sun.
A few days have gone by and Cassandra is having second-thoughts. So she comes to see you. She says to you: "I would like to know whether it is likely - or unlikely - that a judge would find that Janette's conduct in negotiating the sale of the surfboard with me was unconscionable under the general law and if so what remedy I could expect.

Please provide me a concise answer, written in IRAC form. Limit your response to maximum of 500 words and only use the following cases:
Commercial Bank of Australia v Amadio (1983) 151 CLR 447

Louth v Diprose (1992) 175 CLR 621
ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18
ACCC v Lux Pty Ltd [2004] FCA 926
CIT Credit Pty Ltd v Keable [2006] NSWCA 130