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Contract Example Answers

Contract Example Answers - Reconciled Revision...

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Reconciled Revision Cases_Contract Case Mei Ling entered R Pty Ltd’s shop. She said to a salesperson, ‘Look, I’m going climbing in the Himalayas and I need a tent. What have you got? ’The salesperson showed Mei Ling three tents, one of which is a tent manufactured by X Ltd. The salesperson was called away. Mei Ling selected X’s tent and paid the cashier $750. Mei Ling went to the Himalayas and suffered frostbite because the tent was totally inadequate. In fact, the tent was designed for use in mild climates. Mei Ling hobbled into R’s store and demanded an explanation and compensation. The manager said, ‘Well, you selected the tent and what’s more the sign at the cashier’s desk clearly states that R Pty Ltd makes no promises, warranties or conditions in relation to the goods sold and shall not be liable for any damages save and except replacement of goods proved to be faulty at the time of sale.’ Mei Ling remembered reading the sign at the time she bought the goods. Does Mei Ling have a good cause of action against R Pty Ltd? 1. Step. Contract There is a contract between ML and R 2. Step: Term 1. Applicability of the TPA a. seller X Ltd subject to the TPA? s 4 TPA: corporation = significant proportion of activities are trading or finance b. Is Mei Ling a consumer? s 4B TPA amount of service below $40.000 or if it exceeds service for personal, domestic or household use or consumption what if she was doing the expedition as part of her profession – i.e. explorer? should not be for resale goods transformed in course of commercial production/ manufacturing c. Goods provided in course of business? intended to exclude private business d. Step: Auction – auction not covered by TPA 2. Breach of Implied terms under TPA – Part V Division 2 – Remedies: DAMAGES!! seller right to sale s69(1)(a) buyer has quiet enjoyment – s 69(1)(c) sold by description - match the description – s70 sold by sample - s72 merchantable quantity – s71(1) purpose known to seller – must be fit for it s71(2) Sec 71(2) of the TPA states that if the purpose for which the goods are being purchased is made known to the seller in circumstances where the buyer shows that she relies on the seller’s skill and judgment and it was reasonable for the buyer to rely on the seller, the seller must supply goods that are reasonably fit for that purpose. Although Charlie made the ultimate choice she made that choice from a range selected by the seller. Charlie was entitled to expect that all three tents presented by the seller were fit for the purpose of being used in the Himalayas. There is no suggestion that there was anything about the salesperson that made it unreasonable for ML to rely on the person’s judgment. The tent was not fit for the described purpose.
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Consequently, ML can return the goods (s 75A TPA) and sue for damages for the consequential damages she has suffered.
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Contract Example Answers - Reconciled Revision...

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