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