1)The ProblemScenario

JackrecentlyboughtavacantblockoflandinAdelaidewhereheplanstobuildanewhouse.InJanuary this year Jack spoke to his brother Jed, who is an architect, about his plans to build his dream home. The following conversation tookplace.

Jed: I don't have too much work on at the moment; I could design the house and prepare the building plans for you.

Jack: I am not sure if I could afford your fees.

Jed: Well I don't need to make a big profit on this job, you are my brother and I would like to help you out. How about I charge a flat fee of $3000 + GST for building plans?

Jack: I guess that sounds like a good price.

The conversation was abruptly cut short when Jack realised he had forgotten to pick up his son from lacrosse training. However, about a month later, they resumed their discussion when they saw each otherattheirmother'shousefortheirmother's80^thbirthdaycelebrations.JackandJedhadalengthy discussion about what type of house Jack wanted to build on the block of land. In fact, the block of land was located in the same street as their mother's house, and they were able to walk down and have a look while Jack went into elaborate detail about his dreamhouse.

About a week after the 80^thbirthday party, Jed completed building plans and sent the plans to Jack, together with an invoice for $3000.00 + GST. After receiving the invoice, Jack told Jed that he was notgoingtopaytheinvoicebecausehedecidednottobuildthecustomhomethatJeddesigned.Jed was furious and demanded payment. Jed was under financial pressure due to a downturn in his work and was relying on the $3000.00 from Jack. Jed threatened to sue Jackfor"breachingthe contract". In response to this threat of legal action, Jack said: "Jed, don't be like that. You can't sue me anyway because there is no contract."

Jack had decided not to build a custom home because he discovered the construction cost for his dream home would be far too expensive. Therefore, Jack decided on the much cheaper option of a pre-designed project home. Jack was attracted to company called Smile Homes Pty Ltd ("Smile Homes")afterhesawanadvertisementinverylargeprintcoveringa5-metrebillboardwhichoffered a $250,000 price guarantee for a fully-built pre-designed 250m2 project home. At the very bottom of the advertisement, there was additional wording in very small print which Jack didn't see and which states: "the price guarantee does not include flooring, kitchen andbathroom".

Impressed with the price guarantee, Jack visited Smile Homes' display centre (also in Adelaide). He metwithTyler,asalesrepresentativeforSmileHomes.AfterchattingwithTylerforabout20minutes, Jack soon becomes aware that it will end up costing more than $250,000 and felt tricked by the advertisement he saw. Jack became quite irritated with Tyler's indifference and starts yelling quite loudly that this company is "full of dodgy weirdos". Tyler was frightened and bumped into his desk causing his stapler to drop to the ground. At this point, Meg (Tyler's manager) intervened and told Jack to leave and that he is no longer welcome. Jack left, but about 10 minutes later returned yelling that "I just checked the ACCC website on the internet and I am going to sue you dodgy weirdos for misleading me with your sneaky advertisement". Jack scurried around the display centre before eventually tripping on the stapler which dropped to the floor earlier. The trip caused Jack to fracture his wrist.

After injuring his wrist, Jack attended the emergency room at a local private hospital and underwent surgery later that day. A few weeks later, Jack receives phone calls from "Flex-better Physiotherapy andRehabilitation"and"Fast-RemedyPersonalInjuryLawyers". During these phone calls it becomes clear to him that his private health insurer, Simply Health Insurance Ltd ("Simply Health"), hadpassedonhispersonalinformationanddetailsabouttheaccidenttothephysiotherapistandthe lawyer. Jack is irritated because he hates tele-marketing and feels like his personal information has been misused. In fact according to Jack is privacy has been"violated".

2)TheQuestions

Question A - Is Jack correct in saying that there is no contract with Jed?

Question B - Could Jack sue Smile Homes for the injured he suffered?

Note: for Questions 1 and 2 you must use the IRAC method.