Law, Research Paper

Topic: Business Law

Francis owns and operates an antique store in Fremantle, Western Australia that is open between 9am and 5pm Monday to Saturday. One Wednesday morning, Alex is looking for a present for his girlfriend Christina and comes across the antique store. Alex noticed in the shop window an antique mirror and comb set on sale for $250, he believes that Christina will like the items, but he cannot afford $250. Alex enters the store and discusses the matter with Francis the shop owner, who offers to sell him the items for $200. Alex replies by saying ‘that he has to think about it’. Francis says ‘that she will keep the offer open for acceptance until 10am the next day’. Francis gives Alex her business card and Alex gives Francis his mobile phone number.

That evening Alex decided that he would buy the items for his girlfriend Christina. He telephoned the number on the business card and leaves a message at 10pm to the effect that he agrees to buy the antique mirror and comb set for $200 and that he would call by the bookshop on Thursday afternoon to collect and pay for the antique mirror and comb set.

The next day, Thursday, Francis opens the antique store for business at 9am. Around 9.30am Samantha visited the shop and saw the antique mirror and comb set in the shop window. She enters the shop and is very keen to purchase the items to add them to her antique collection, and offers Francis $230 for the items. Francis accepted Samantha’s offer. Samantha paid for the items and left Francis’s antique shop with her purchase.

At 10am Francis telephoned Alex and told him that he was withdrawing his offer and that he had sold the antique mirror and comb set to Samantha. Alex then told Francis that he had left a message on the answer service last night at 10pm saying that he agrees to purchase the items for $200. After her telephone conversation with Alex, Francis accessed the answering machine message and heard the telephone message that Alex had left the previous evening.
Question (1)
Assume that the elements of intention and consideration required for the formation of a contract exist. Using the four-step process, discuss whether the element of agreement required for the formation of a contract can be established. Did Alex have a legally enforceable contract with Francis? Does Francis have to sell the special offer set to Alex?
Wendy is a badminton champion and is going to represent Australia in the forthcoming Olympics. Before leaving Australia for London Wendy decides to have her badminton racquets restrung. Wendy sees an internet advertisement by Fred’s Racquet Restringing, stating that they are the ‘best in Western Australia and no-one can restring racquets like them’ the advertisement also stated that ‘they only use first grade materials when restringing racquets for champions’.
Seeing this advertisement Wendy decides to take her racquets to Fred’s Racquet Restringing. She enters Fred’s shop, she does not notice a sign which is placed on the wall behind the counter which says, in small sized print:
‘Whilst all possible care is taken with stringing and restringing work entrusted to us we cannot accept responsibility for any defective work or defective products used by us, and we will not be liable for any loss or losses to customers, even if demonstrably caused by negligent workmanship by any of its employees.’
Even if Wendy had seen the notice she would not have been able to read it as she normally wears contact lenses and she was not wearing them that day.
Wendy asks for Fred and she explains that she has seen his internet advertisement and she would like him to restring her racquets for badminton as she is going to the Olympics and she could win gold, therefore it is extremely important that he restrings her racquets with the correct tension and materials. Fred assures her that the racquets would be restrung correctly with the highest grade of materials. Wendy then asks ‘what the cost will be for restringing 6 racquets’ and Fred says ‘the 6 racquets would cost $180’. Wendy agrees and leaves her racquets for restringing and was given a docket which she placed in her purse, assuming that it identified her racquets so that she could collect the right racquets on her return. The same words which appeared on the notice behind the counter were also printed on the docket in very fine, but legible, print on the bottom of the docket.
A few days later, Wendy collected her racquets which appeared to be correctly strung. Paid the costs of restringing, packed the racquets with her other gear and left for the Olympics.
Whilst competing in the first round of competition, the strings in Wendy’s racquet broke. She then selected five replacement racquets in turn they also broke. She was eliminated from the first round of the Olympics and she was devastated as Wendy was guaranteed $25,000 of endorsements if she reached the finals. Wendy’s poor performance could be directly attributed to her faulty racquets, which had been strung with defective materials. Subsequent testing of the strings showed that they were suitable for squash racquets, but not for badminton racquets and they should never have been used by the person stringing the racquets for Wendy.
It was later discovered that one of Fred’s employees allowed his son (who is not an employee of Fred’s Racquet Restringing) to restring the racquets and he used the wrong strings.
Question (2)
Using the four-step process, discuss what terms are expressly agreed in relation to the restringing of Wendy’s racquets. In your answer be sure to discuss whether Fred’s Racquet Restringing can rely on the exclusion clause in the contract. You will also need to determine the status of any relevant terms, including whether they are a warranty or a condition. Students are reminded that they have been instructed to confine their answers for this assignment to topics four and five and NOT to consider the law in relation to performance, breach of contract or remedies.