PART A - CONTRACT

(1)Nelson placed the following advertisement on the notice board at his localsupermarket.

"For Sale. iPhone8. Black. 64 GB - comes complete with earphones, USB cable and power adapter. $650. Must sell before Friday 31st August. Phone Nelson 021 01201 1110."

On Wednesday Ralph saw the advertisement and immediately phoned Nelson. Unfortunately Nelson was not able to take the call and it was diverted to his message service. Ralph left the following message, "I'm calling about the phone in the "For Sale" notice at the supermarket. I accept. I'll pay the $650 - cash immediately. Call me back and we can arrange how I can collect the phone."

Nelson met Lisa on Saturday 1st September who said she would pay $700 for the phone. Nelson said he wanted time to think about it. Before he replied to Lisa he checked his messages and heard the call from Ralph.

Analyse this scenario and advise Nelson of his legal position.

(2)Karl and Lennie are brothers. One day they saw an advertisement for a fishing competition with a new BMW 335iS coupe as the prize. They decided to enter and agreed to split the expenses 50/50 and, if either of them won the competition, to share the prize equally. Karl booked them tickets on a charter boat and paid the entry fee, while Lennie arranged to borrow fishing gear from a friend and bought special baits and lures. They travelled in Lennie's car to the wharf where they boarded the charter boat. In the course of the day they caught a number of fish. One of Karl's was subsequently weighed and won thecontest.

Karl refused to share his prize with Lennie.

Analyse this scenario and advise whether Lennie is entitled to a half share in the prize.

(3)On the way to the contest Lennie's car suffered a flat tyre on a remote country road. Nelson, another motorist, stopped to offer assistance. He gave Lennie a lift to the next town where Lennie arranged for the flat to be repaired. When Lennie was returned to his car by Nelson he thanked him profusely and said, "I owe you. Without your help we would have missed the competition. Give me your address. I'll send you a cheque for $100." Nelson gave him his address but has not received the promised$100.

Does Lennie have to pay Nelson $100? Why?

PART B - FAIR TRADING ACT

(4)Fast Eddie has just opened a bike shop in Highland Park called "Whizzer". As part of the opening promotion Eddie advertises in the local newspaper that he selling the new model Mottofor

$1,200, a saving of $400.

Ken did not see the advertisement but bought a Motto for $1,200 from Eddie. He now discovers that the regular price was $1,200. There was in fact no discount. Eddie says the printer made a mistake with the advertisement.

Does Ken, or anyone else, have a claim against Eddie?

PART C - CONSUMER GUARANTEE ACT

Which of the following is correct? Be prepared to justify your answer.

(5)The purchase of a stove by a factory owner for use by his employees in their lunchroomis:

(a)Not covered by the Consumer Guarantees Act as the Consumer Guarantees Act does not cover the use of items by businesses. Use by a business cannot be considered to be "personal, domestic or household use" in terms of s2 of the Consumer GuaranteesAct.

(b)Not covered by the Consumer Guarantees Act as the Consumer Guarantees Act does not cover businesses. Businesses are not considered to be consumers in terms of s2 of the Consumer GuaranteesAct.

(c)Covered by the provisions of the Consumer Guarantees Act because this transaction is a supply of goods which does not meet the exemptions relating to the supply of goods in s2 of theAct.

(6)Where goods are sold and which subsequently turn out to be faulty and the transaction is subject to the Consumer Guarantees Act, which of the following remedies are available to the consumer:

(a)The consumer can always ask for a refund of the purchaseprice.

(b)The consumer can always ask for a refund of the purchase price, or at the consumer's discretion, ask for a replacementitem.

(c)Damages for loss occasioned by the faulty goods, provided such loss isforeseeable.

(d)The supplier is liable for damage, loss or the cost of repair of the goods but may limit the amount of such liability, e.g by stating that they are liable only for repairs to the valueof

$200, providing the consumer has written notice of such terms at the time they enter the contract and agrees to them.

(7)Mike, a professional mountain biker, buys a top of the line mountain bike from Wheels to ride in a mountain bike event. On a training ride the bike develops a fault with the gears. What are Mike's remedies under the Consumer GuaranteesAct?

(a)He is not covered by the Consumer Guarantees act because as a professional cyclist he is buying the bike for businesspurposes.

(b)He is covered by the Consumer Guarantees Act and can require Wheels to fix the bike and can also claim by way of damages the prize money for the event he was to enter, because he has lost the chance to win theprize.

(c)He is covered by the Consumer Guarantees Act and can require Wheels to fix the bike if it can be fixed but cannot claim the prize money by way ofdamages.

(d)Mike has no remedies in New Zealand under the Consumer Guarantees Act because the bike was manufactured in Taiwan and the manufacturer does not have a place of business in New Zealand.