Discuss whether Trio is liable in tort to Flamingo and/or Jane.

QUESTION TWO:                      

Discuss whether any contract has been formed between Mr Choden and Mere and/or Ira and Mere.

QUESTION THREE:                    

Discuss whether William has made a contractual misrepresentation about the business to Mr Choden and the possible remedies that he might have under the Contract and Commercial Law Act 2017. Include in your answer a brief explanation as to whether the customer’s response is of any significance.

QUESTION FOUR:          

Explain briefly the nature of agency and then discuss whether Mr Choden or his secretary is liable to pay for the pizza order.                                                        

QUESTION FIVE:                            

Discuss who is the owner of the Lexus, who is at risk for the loss of the Lexus, and whether Mr Choden is liable for payment of the purchase price.                                                                                                                  
Explain what kind of property the car stereo is and who is its true owner.      

QUESTION SIX:  

Discuss whether Gavin is entitled to a cash refund under the Consumer Guarantees Act 1993.                                                  

Have Enos and/or Mr Choden committed an offence under the Fair Trading Act 1986?      

Mr Choden is an entrepreneur based in Auckland. He owns several businesses and invests in other business opportunities.

One of his interests is Trio Ltd (“Trio”) an Auckland based building company that Mr Choden has invested in. Trio is involved in constructing a ten storey building in the city. One of the senior builders on Trio’s construction team, Joseph, has been involved in an accident. As he was discussing last weekend’s rugby game with his assistant, Bill, on the top level of the building, a brick he was holding slipped out of his hand and hit a mobile crane owned by Flamingo’s Limited (Flamingo’s) that was working on road repairs next to the construction site. The brick smashed the windscreen of the crane and damaged the cab. The operator was so surprised by the brick’s entry into his cab that he jerked the controls of the crane, causing it to release its load onto a passing car owned by Jane, this in turn causing extensive damage to her car and breaking Jane’s arm. Mr Choden is not sure who will be liable in this situation.

Mr Choden also collects Colleen McCahon paintings as an investment. He happens to meet his niece, Mere, at an art exhibition. Mere is thinking of selling one of her Colleen McCahon paintings and says to Mr Choden: "I want to sell my painting by Colleen McCahon. I think it must be worth at least $35,000."

Mr Choden says he’ll think about it and next day Mere gets a message from Mr Choden saying: "I accept your offer to sell your painting for $35,000."

Mere consults a dealer about the painting she wants to sell and then calls another collector Ira who has previously expressed an interest in buying the painting and says: "I'm selling that painting you’ve always wanted, you know, the Colleen McCahon self-portrait. It's yours for $40,000."

Ira says: "I will pay $35,000."

Mere replies: "I'll have to look for another buyer then."

Later Ira talks to a friend who will lend her the extra $5,000, so Ira quickly rings Mere and says: "I accept your offer to sell the Colleen McCahon painting for $40,000." Mere says nothing.

Mr Choden hears of this and rings Mere to remind her that he has already bought the painting.

A few days later Mr Choden is investigating the purchase of a cafe in the city from William. He does a thorough analysis of the café business and is impressed but Mr Choden particularly likes the café because the premises include an upstairs apartment which suits him in every way including its central city location. When showing Mr Choden around the café on one of his visits one of the customers exclaims “This is a great buy. It’s always packed here at lunch time.” WIlliam quickly says “That’s right; we always have full tables at lunch time because of the workers from the furniture shop nearby. We are the closest cafe.” This is true but William does not mention that the shop owners have told him that the shop will soon be closed and that the furniture shop will be moved to the suburbs. After William and Mr Choden sign the written contract for sale of the cafe an announcement comes that the shop will soon close. Mr Choden is annoyed but thinks that he still wants to go ahead with the purchase although he has not said anything to William.

Mr Choden frequently asks his secretary to order boxes of donuts from Delightful Donuts in his name for him, his staff and friends. One day he has an argument with his secretary and she decides to play a trick on him. She knows Mr Choden does not like pizza so she quietly rings Pizza House and tells them that she is the secretary for Mr Choden the well-known entrepreneur, that she is acting on his behalf and that Mr Choden would like 15 pizzas delivered to him. She then leaves work with a smile on her face. Mr Choden is bemused when 15 pizzas arrive with his name on the order and is not sure whether he is liable to pay or not.

After this Mr Choden decides he needs a new car, He attends a car fair in order to buy one and sees a Lexus motor vehicle that he likes, He contracts with the seller, Fraser, to buy it for $20,000.

He and Fraser agree on all the terms including agreeing that Mr Choden will pick up the car from Fraser’s home on Monday night at which time Mr Choden will pay for the car in full. This is upon the condition however that Fraser obtains a new warrant of fitness for the car.

Fraser takes the “For sale” sign off the car and drives it home, stopping at his mechanics garage on the way to obtain a warrant of fitness. He parks it at home on Saturday afternoon. He locks it securely and sets the alarm. That night the car is broken into by thieves who disconnect the alarm. They take the car to a workshop on the other side of Auckland and break it down for spare parts which they sell.  

The police investigate but are unable to find the thieves. In the course of their enquiries however the police discover that the thieves have sold the car stereo to the local second hand store. The manager of the store had no idea that the stereo was stolen when he paid for it.

Fraser tells Mr Choden that he is still liable to pay the sale price of the car despite the loss.

Mr Choden also owns an electronics business selling laptops. One of the items he sells is a high specification laptop computer, the “Super Pro” that is excellent for creating graphics. Most of the buyers of the Super Pro are desk top publishing businesses as it is perfect for their needs. For customers that are buying any of his laptops to use in business Mr Choden has a standard contract which contains a clause saying “Since laptops in a business environment are used all day every day we are not able to offer any refunds to our business customers”. Mr Choden asks business customers to sign these standard contracts but does not ask non-business customers to sign.

One day he leaves his nephew, Enos, in charge for an hour. Enos is confused and asks all customers, both business and non-business to sign the standard contract. Gavin is one of the customers that Enos deals with. Gavin tells Enos he wants a good laptop to play games and he particularly wants a laptop that will download a new game that has just come out called “Crash Palace 2020”. Enos tells him the Super Pro is ideal for his needs and has the specifications to play Crash Palace easily. Gavin then buys a Super Pro.

The next day Gavin returns the Super Pro to Mr Choden asking for a cash refund as the Super Pro does not have the specifications to download and play Crash Palace. Mr Choden thinks Gavin should have checked more carefully before buying a laptop computer that is designed for business use.