Revision

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

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• 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

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• Application of Trade Practices Act (s4B)
• A person is a consumer if
• Price of goods\services lt 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
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Terms of the ContractStatutory Implied Terms

• (Sweeney OReilly
• Chapter 8 pp 184 199)

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

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• 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)

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• 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

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• 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

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

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• 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
  sellers skill or judgment
• There is an implied condition that the goods will
  be fit for the purpose (s20)

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• 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 (SO p192)
• Buyer must make known the particular purpose to
  the seller
• Griffiths v Peter Conway (SO p193)
• Purpose may be a matter of inference
• Godfrey v Perry (SO p193)

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• Fitness for Purpose
• Buyers reliance on sellers 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) (SO
  p194)

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• 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

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• Merchantable Quality
• Sale by Description
• Frank v Grosvenor Motor Auctions (SO 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 (SO p190)
• H Beecham v Francis Howard (SO p190)

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• Merchantable Quality
• Having regard to other circumstances
• New vs Used
• ACCC circular (SO p191)
• Bartlett v Sidney Marcus (SO p191)
• Any defect, even if easily remedied
• Grant v Australian Knitting Mills (SO p191)

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• 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 (SO p194)
• Goods are part of a display
• Beale v Taylor (SO p195)

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

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• 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))

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• 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

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• 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 sellers
  ownership
• A reasonable time has elapsed

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• 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 (SO p198)

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• 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

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

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• 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

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• Jurisdiction
• Which countrys laws are to be applied to address
  the respective rights and obligations of the
  parties?
• What is the consequence of a countrys lack of
  jurisdiction?

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• 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

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• Jurisdiction
• France
• The Yahoo case
• Germany
• The Adelaide Institute
• Trade mark cases
• Legislation (1997) Any web site accessible from
  Germany is subject to German law

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• 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
• Gutniks case

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• 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

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• 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
• Doesnt apply to consumer goods or auctions
• Contract is formed when acceptance is delivered
  to the offerors mailing address

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• Time Place of Offer Acceptance
• Is email instantaneous?
• Vienna Sales Convention
• The acceptance is sent when it is put in the
  offerors mailbox
• Is online shopping instantaneous?
• Vienna Sales Convention
• Offer is made when it is delivered to the
  sellers URL

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• 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 recipients attention

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• Time Place of Offer Acceptance
• Section 14 Electronic Transactions Act
• Dispatch occurs at the senders place of business
• Receipt occurs at the recipients 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

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

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• 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

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• 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

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• 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

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• Electronic Agents
• Can a partys 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

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• 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.

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• 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

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• 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

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• 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