Subject: HI6027 BUSINESS AND CORPORATE LAW

Question 2(11 marks)

A sales representative in a shopping centre handed Karl a flyer promoting a style cut and shave for $12 at Lion's Mane Barber Shop. As he was actually in need of a haircut and shave, Karl dropped by the barber shop, which was also located in the same shopping centre. When he arrived at the shop and presented his flyer to one of the barbers, he was told that there had been an error in the statement of price on the flyer - it was supposed to be $22 and not $12. The shop manager tried to convince Karl that this was still a bargain price given that a style cut and shave would normally cost $30 in other barbershops.

Karl got upset, as he passed by two other barbershops in the same shopping centre that sold haircuts and shaves for $20 to $25. If he had known about the supposed mistake in the Lion's Mane flyer, he wouldn't have bothered coming to the shop.

Answer the following:

(a)Does Karl have any legal grounds to claim the price of $12? (5 marks)

(b)Would your answer be different if Karl already had his hair cut and shave before being informed by the real cost of the services was $22? Does he have to pay the full price in this case? (7 marks)

Answer this question using principles from both contract law and the Australian Consumer Law.

Important Note: If you use any material, book, journal or case study etc. then, Reference sources must be cited in the text of the question and listed appropriately at the end in a reference list, Please provide all references in Adapted Harvard Referencing style.