Costas operated a restaurant and wanted to change its image by buying some new furniture

for the restaurant. He decided on some table and chairs which he purchased for a total of

$45,000 from Liberty Furniture in Parramatta. Costas was handed a written sales contract which

he was required to sign. However, before he signed the written contract, he asked the sales

representative from Liberty Furniture, "I am only going to sign this contract if I have a guarantee

that these tables and chairs are of good quality". The sales representative then stated, "We stand

behind every item of furniture, we sell and offer full refunds where customers are not fully

satisfied. We have been in business for 50 years without any complaints". Costas then said

"That is exactly what I wanted to hear and so now I will sign this contract". Immediately after

this discussion, Costas and the sales representative of Liberty Furniture then proceeded to sign

the sales contract. Included in this written sales contract were details about the items purchased

(100 chairs and 50 matching tables said to be of commercial grade and long-lasting), the price

paid, the delivery date and place.

There was also, hidden away in fine print at the bottom of the document, a clause, clause 5,

which stated:

"Liberty Furniture accepts no responsibility for the furniture items supplied as these have

been supplied by third parties to Liberty Furniture. Accordingly, Liberty Furniture provides no

warranty, refund, or any other remedy if a customer is unhappy with any furniture item or items

for any reason."

Costas had never purchased any item from Liberty Furniture previously and no one at Liberty

Furniture at any time pointed out to him what was contained in clause 5 of the written sales

contract. The terms of clause 5 are unlike any terms used by any other furniture retailer in

Australia.

The new furniture looked impressive but unfortunately for Costas the quality turned out to not be

satisfactory. After only 2-3 weeks from purchase, Costas was made aware by some of his

unhappy customers that some chairs started breaking and even some table legs from some tables

had started coming off. What made things even worse was that the slightest of scratches against

the items of furniture would leave noticeable and lasting marks. It seems this was because the

type of timber used in the manufacture of the furniture items made them unsuitable for

commercial use.

Costas is furious and has contacted the manager of Liberty Furniture and demanded that either

the damaged items are replaced, at no cost to Costas, or that he should be able to return all the

furniture and obtain a full refund. The manager of Liberty Furniture is refusing to take either of

those actions and points to clause 5 of the sales contract denying any liability.

Less than 4 weeks after the purchase, on checking all the furniture carefully, Costas has

determined that 48 of the 100 chairs purchased are either already badly scratched or broken. Of

the 50 tables purchased; Costas has found that all 50 of the tables have already been badly

scratched so much so that their appearance is unsightly and that 24 of these tables have lost

either 1 or 2 of their four legs. Costas has also discovered that Liberty Furniture has had many

hundreds of complaints over the years and is well known to consumer protection agencies in

NSW.

He has also discovered in another clause written in fine print within the contract document that

Liberty Furniture only offer full refunds when a customer agrees to pay an additional fee of 50%

of the purchase price.

a) Advise Costas, referring to (separately) BOTH the common law contract law

provisions AND the consumer law statutory guarantees as to what, if any, legal rights

Costas has against Liberty Furniture.

b) What remedies, if any, can Costas seek from Liberty Furniture should he succeed in

his legal action against them?

Kindly share the relevant case laws in Australian context