Analysis of Consumer Law, Breach of Contract, and Online Transactions: A Legal Perspective

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Question one: CONSUMER LAWa)Advise Tommy as to the application of the exclusion clauses?The Australian Consumer law (ACL) startedto apply on January 1, 2011. Previously thenational, state or territory consumer laws were applied and enforced by the relevantnational, territory and state consumer agency. Many consumers are usually confident thatbusinessesdo the right thing, however lack of awareness of the rights and obligationsunder the consumer laws has led to vulnerability of many consumers in society.As in the case of Tommy, lack of knowledge of the rights and obligations of consumerasprovided in the Australian consumer law may lead to inability to solve disputes.The schedule 2 of the Competition and Consumer Act 2010 provides that, the conditionsand warranties implied and the rights and remedies created by the Australian Law cannotbe excluded. Therefore, any attempt to exclude the conditions, warranties whetherstatutory or otherwise is made void by the terms of the Act. This condition thus makesthe company liable to prosecution under the Act.This means thatexclusion clauses arenot applicable.b)How would a court interpret clause (1) and would the clause cover Jay’s liability foritems stolen by its employees?Clause 1, states that the proprietor of Jay’s dry cleaning does not accept liability for anyloss or damage caused to clothing items during the dry cleaning process. The courtsinterpretation will be as follows:

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The section 60 of Australian Consumer Law provides that the contract for the supply ofservices to consumers contain an implied warranty that the services will be rendered withdue care and skill. The warranty cannot be excluded.That Bob Jay isthusliable to any damage caused on the clothing items by the employeesduring the dry cleaning process. Similarly, any loss through theft or burglary is to bechargedagainst Bob Jay.c)Would clause (2) be effective to exclude the application of the consumer guaranteesunderCompetition and Consumer Act 2010?Clause 2, provides that the consumer guarantees under the Australian Consumer Law areexpressly excluded in respect to any dry cleaning services provided by Bob Jay.The schedule 2 of the Competition and Consumer Act 2010 provides that, the conditionsand warranties implied and the rights and remedies created by the Australian Law cannotbe excluded. Therefore, any attempt to exclude the conditions, warranties whetherstatutory or otherwise is made void by the terms of the Act. This condition thus makesthe company liable to prosecution under the Act. Based on this information, the clause (2)may notbe effective to exclude the application of the consumer guarantees.QUESTION TWO:a)Advise State Trains as to the remedies it might have under the common law.The remedies of breach of contract under common law include damages andliquidated claims. Before being awarded these remedies there should be certainity thata financial loss resulted from the breach of contract. Similarly, the damages should be

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foreseeable, in other words, at the time of making the contract the party who breachedthe contract should have known the consequence of the breach. It should also benoted that damages may not be awarded in the case that the plaintiff, through badfaith or unreasonable action or inaction aggravated the damages then the defendantwill not be liable for the increase of the loss.Damages for breach of contract are designed to put the plaintiff in the position theywould have been in the case that the contract was performed properly. They are thusviewed as a substitute for performance. The loss should be associated with the breach andthe plaintiff should take necessary steps to reduce the extent of the damage.Alternatively,State Trains have other remedies like liquidated damages. Liquidateddamages are used where there is a clause in the contract that provides the amount ofmoney payable in case of a breach of contract. The sum agreed upon should however notconstitute a penalty.b)Assume that State Trains is unable to find another caterer to supply meals, whatadvice would you provide to State Trains if it reluctantly accepted the additional cost?Solution:IfState Trains is unable to find another contract and reluctantly agrees to the acceptedadditional cost it means that there will be abilateral contract modification. My advice toState Trains is that, they should ensure that Snacks Pty Ltd meets the new food standrds

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