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Presentation on theme: "Revision."— Presentation transcript:

1 Revision

2 Terms implied by Legislation
3 Acts that imply terms in a contract Criteria for TPA to apply Definition on consumer contract in TPA

3 Application of Trade Practices Act
Applies only where The vendor\supplier is subject to the Act The purchaser is a consumer The service is provided in the course of business

4 Application of Trade Practices Act
The supplier is subject to the Act if: A trading, financial or foreign corporation It is operating in a territory (e.g. NT) The contract involves interstate trade The contract involves overseas trade The contract involves the Commonwealth or its organisations

5 Application of Trade Practices Act (s4B)
A person is a consumer if: Price of goods\services <= $40,000; or Goods\Services are of a type ordinarily acquired for personal, domestic or household use or consumption; or Goods are a commercial road vehicle; and Goods are not acquired: For resale; or To be used in commercial production or manufacture; or To be used in the repair or treatment of goods or fixtures on land In the course of an auction ie one of the first 3 and not one of the last 4 items Goods & Services Goods Only

6 Terms of the Contract Statutory Implied Terms
(Sweeney & O’Reilly Chapter 8 pp 184 – 199)

7 Goods Act (Vic) Covers sale of goods only
Distinguishes between consumer and non-consumer contracts Consumer contracts Applies terms similar to those implied by Trade Practices Act Non-consumer contracts Applies different terms that can be excluded by agreement Applies to contracts made in Victoria Similar legislation in other Australian States

8 Goods Act (Vic) Defines consumer contracts as contracts for the sale of goods: Under $20,000; or Ordinarily acquired for personal, domestic or household use; and are not brought for Resale; or Use as inputs in manufacture (Section 85 Goods Act)

9 Goods Act (Vic) But Trade Practices Act defines a limit of $40,000
If a consumer contract as defined by Trade Practices Act then TPA applies Otherwise Goods Act (Vic) applies Consumer provisions of Goods Act apply but TPA does not apply where supplier not subject to TPA

10 Goods Act (Vic) Non-consumer provisions of Goods Act apply to, for example: Sale of component parts to manufacturer Sales of raw materials to a commercial enterprise Sales of finished goods to a reseller Sales of industrial goods over ($40,000) International sales of goods

11 Is the contract for the sale of goods?
Yes Is the contract for the sale of goods? Does s 85 of the Goods Act apply? No The contract is a non-consumer contract Does the Trade Practices Act apply? No

12 Terms Implied by Goods Act
A condition that the seller has the right to sell (s17) A warranty that the buyer to have quiet enjoyment (s17) A warranty that the goods are free from encumbrance (s17) Where sale by description, a condition that the goods match the description A condition that the goods are of merchantable quality (s19(b))

13 Terms Implied by Goods Act
Where seller: expressly or impliedly makes known to the seller the purpose for which the goods are being purchased In such circumstances that the seller knows or ought to know that the buyer is relying on the seller’s skill or judgment There is an implied condition that the goods will be fit for the purpose (s20)

14 Terms Implied by Goods Act
Similar to terms implied by TPA but some differences Case law on Goods Act can be applied to interpretation of TPA

15 Fitness for Purpose Overlaps with implied condition of merchantable quality David Jones v Willis (S&O p192) Buyer must make known the particular purpose to the seller Griffiths v Peter Conway (S&O p193) Purpose may be a matter of inference Godfrey v Perry (S&O p193)

16 Fitness for Purpose Buyer’s reliance on seller’s skill and judgment
may be only partial but it must be a “substantial and effective inducement” to purchase Must be reasonable Teheran-Europe Co v S T Belton (Tractors) (S&O p194)

17 Merchantable Quality Claim for breach of implied term exists if:
Sale by description by seller who normally deals in such goods (note: not required by TPA) The goods are not as fit for their normal purpose or purposes as is reasonable to expect having regard to the price and other circumstances Buyer was not aware of defect Inspection before sale would not have revealed the defect

18 Merchantable Quality Sale by Description
Frank v Grosvenor Motor Auctions (S&O p187) There has there been sale by description if the buyer primarily relies upon their classification or possession of attributes as described in the description Having regard to Price Brown & Son v Craiks (S&O p190) H Beecham v Francis Howard (*S&O p190)

19 Merchantable Quality Having regard to other circumstances New v’s Used
ACCC circular (S&O p191) Bartlett v Sidney Marcus (S&O p191) Any defect, even if easily remedied Grant v Australian Knitting Mills (S&O p191)

20 Correspondence with Description
Those matters that identify the goods (cf merchantable quality) Usually applies where Goods not yet ascertained Goods not yet in existence Buyer has not seen goods Varley v Whipp (S&O p194) Goods are part of a display Beale v Taylor (S&O p195)

21 Correspondence with Description
Extends to packaging Moore v Landauer & Co (S&O p195) Buyer must rely on description Harlington & Leinster Enterprise v Christopher Hull Fine Art (S&O p196) Ashington Piggeries v Christopher Hill (S&O p196)

22 Correspondence with Sample
Bulk of goods must correspond with sample (s20) Goods shall be free from any defect rendering them unmerchantable which would not be apparent from examination of the sample (s20(2)(c)) Buyer shall be given a reasonable opportunity of comparing the bulk with the sample (s20(2)(b) If sale of goods by description and sample, all goods (not just bulk) must correspond with description (s19(a))

23 Other Implied Terms Price
If no price, then a reasonable price is to be paid (S13) Delivery (s36) If no time is fixed, then delivery is to be within a reasonable time

24 Other Implied Terms Goods Act (VIC) implies terms relating to
Acceptance (ss 41 & 42) Once accepted, goods cannot be returned (non-consumer contracts only) Occurs when Buyer says he accepts goods Buyer does anything inconsistent with seller’s ownership A reasonable time has elapsed

25 Other Implied Terms Goods Act (VIC) implies terms relating to
Passing of Property (i.e. title) (ss22 & 23) Payment Risk (s 25) Goods Act (VIC) will not create a contract where none existed ANZ Banking v Frost Holdings (S&O p198)

26 Excluding or Limiting Implied Terms
The terms implied by the Goods Act (Vic) in non-consumer contracts can be excluded or limited Normal rules relating to exclusion clauses apply i.e Is the exclusion clause a term of the contract? Does the exclusion clause cover the breach? Subject to equitable remedies e.g. Unconscionable conduct Economic duress

27 eCommerce

28 eCommerce Issues Jurisdiction Form of contract
Time and place of offer and acceptance Incorporation of terms Capacity of software agents

29 Jurisdiction Different laws Conflict of Laws International conventions
Vienna Sales Convention UNCITRAL Model Law on Electronic Commerce International Chamber of Commerce E-Terms repository This lecture deals only with Australian law

30 Jurisdiction Which country’s laws are to be applied to address the respective rights and obligations of the parties? What is the consequence of a country’s lack of jurisdiction? Whose law applies. Law is based on geographic boundaires and the rights of the sovereign state to control the activities withinthe state. How do you work out whose law applies when a contract is made in cyberspace. Is it the law of Oregon that does not have the same consumer protection legislation as Austrlaia or is it Australian law which has the Trade Practices Act controlingmany transaction. Depending on you position in the deal you may or may not want Austrlain law to apply . You may be at pians to prove this was an Oregon contract. Many cases are not fought over the issue at hand bu t the power of a court to hear a case. Jusidicion is a major concern in cyber law as we will see throughout the course

31 Jurisdiction The Internet transcends geographic borders , there are no laws or borders on the Internet. There is no ‘Lex Internet’. Different countries have different Legal systems Criminal law consumer protection legislation etc

32 Jurisdiction France Germany The Yahoo case The Adelaide Institute
Trade mark cases Legislation (1997) – Any web site accessible from Germany is subject to German law Abel, S.M. 1998, Trademark issues in cyberspace: the brave new frontier, [online: accessed 28 June 2001] URL: Liebowitz, W.R. 1997, “National laws entangle the Net: it’s a small, small, litigious Web”, The National Law Journal, 30 June, p B07.

33 Jurisdiction USA approach
Systematically doing business with territory; or Minimum contact with Territory Targeted solicitation Interactive response features Provisions for taking orders and making contracts Australia Macquarie Bank Ltd v Berg (Unreported) Supreme Court of NSW per Simpson J, 2 June 1999 Gutnik’s case Australian courts have been reluctant to grant relief in respect of offending information on foreign web sites for this reason and because to do so would impose Australian law on the world (Macquarie Bank Ltd v Berg, 1999). The United States Courts have also been reluctant to extend their extraterritorial reach even to a neighbouring state within their own country. They require that the alleged offender be systematically doing business within the court’s territory or there be a ‘minimum contact’ with the court’s territory (Wilske and Schiller, 1997). US courts are reluctant to establish worldwide jurisdiction based on a passive or informational web site (Hearst Corp. v Goldberger, 1997). Hearst Corp v Goldberger, 1997 West Law (S.D.N.Y.). Wilske, S. and Schiller, T. 1997, “International jurisdiction in cyberspace: which states may regulate the Internet?”, Federal Communications Law Journal, vol. 50, no. 1.

34 Form of Contract Many statues require: Writing Signature
Sealed and delivered (Deed) Witnesses etc Section 8 Electronic Transactions Act A transaction is not invalid because it took place wholly or partly by means of one or more electronic communications

35 Time & Place of Offer & Acceptance
Are electronic communications subject to the postal rule? “instantaneous” does not refer to speed of communication Refers to if other party can immediately notify the other if he does not receive whole or part of message Vienna Sales Convention Applies to contracts involving signatory countries Doesn’t apply to consumer goods or auctions Contract is formed when acceptance is delivered to the offeror’s mailing address

36 Time & Place of Offer & Acceptance
Is instantaneous? Vienna Sales Convention The acceptance is sent when it is put in the offeror’s mailbox Is online shopping instantaneous? Offer is made when it is delivered to the seller’s URL

37 Time & Place of Offer & Acceptance
Section 14 Electronic Transactions Act Dispatch occurs when it enters the first information system outside the control of the sender Receipt occurs when it enters the information system designated by the recipient If no information system designated then receipt occurs when it comes to the recipient’s attention

38 Time & Place of Offer & Acceptance
Section 14 Electronic Transactions Act Dispatch occurs at the sender’s place of business Receipt occurs at the recipient’s place of business If more than one place of business then Place of business most closely related to the transaction Otherwise, principal place of business

39 Time & Place of Offer & Acceptance
Section 14 Electronic Transactions Act If no place of business Place of residence

40 Time & Place of Offer & Acceptance
Clicking “I accept” button This is the offer Seller can accept or reject Electronic Auctions The bid is the offer Auctioneer can accept or reject But, there may be a collateral contract with auctioneer that he will accept the bid

41 Shrinkwrap Agreements
Terms and conditions are not shown to purchaser until after he has bought the box and opened it Terms cannot be imposed after contract formed Purchaser must be given reasonable notice of terms before contract formed

42 Shrinkwrap Agreements (cont.)
Are there 2 contracts? One to buy the box One to licence the software Cases have recognised practical importance of allowing terms to be made known after sale McRobertson Miller Airlines v Commissioner for State Taxation (1975) 133 CLR 125 Hill v Gateway 2000 Inc. Try and return clauses

43 Electronic Agents Can a party’s intention be expressed by a computer
Can a computer act as an electronic agent Ostensible (apparent) authority of agents Principal is bound where he puts agent in a position where he appears to have authority Principal is nopt bound where agent it is clear to others that agent is acting outside ostensible authority

44 Electronic Agents (cont.)
Section 15 Electronic Transactions Act For the purposes of a law of the Commonwealth, unless otherwise agreed between the purported originator and the addressee of an electronic communication, the purported originator of the electronic communication is bound by that communication only if the communication was sent by the purported originator or with the authority of the purported originator. Subsection (1) is not intended to affect the operation of a law (whether written or unwritten) that makes provision for: conduct engaged in by a person within the scope of the person's actual or apparent authority to be attributed to another person; or a person to be bound by conduct engaged in by another person within the scope of the other person's actual or apparent authority.

45 Electronic Signatures
3 possible legal scenarios Minimalist Only recognise that electronic signatures can be the same as written signatures Prescriptive Specify details of technology to be used Set broad criteria for electronic signature to be effective

46 Electronic Signatures
Section 10 Electronic Transactions Act adopts minimalist approach Requires identification, attribution and assent Does not require signature to verify message integrity Technology used must be “as reliable as [is] appropriate”

47 Electronic Signatures
Section 10 Electronic Transactions Act Recognises the need for different levels of authentication Caters for technological advances Does not favour one technology Is consistent with international developments (e.g. UNCITRAL) Only applies to areas covered by Commonwealth law States are enacting parallel legislation

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