Tania was watching television one evening and came across an advertisement by Comp Whiz Pty Ltd which had the following wording:
“Financial year end sale. Up to 70% off on all computer equipment and other electronics in our store. Hurry now. This promotion lasts for selected brands only. While stocks last. Terms and conditions apply.
If customers spend at least $1000 on mobile and electronic goods, they are entitled to get 50% off on future purchases over the next year.”
Tania turns up at the store the next day and walks around browsing the items for sale. Tania took a liking for an ‘IPhone Geni 3+’ which had a price tag of $700 and proceeded to the counter to make her purchase. When the item was scanned at the registry, she was informed that the price tag of the item was in fact inaccurate and the correct price according to their system was $800.
Tania believes she is entitled to purchase the IPhone Geni 3+ at the displayed price of $700.
Tania further enquired whether she would be entitled to get 50% off on future
700254 Enterprise Law – 2021.3 Page 3 of 5 Assessment 2 – take-home assignment
purchases if she decided to spend at least $1000 on mobile and electronic goods at the store. The store assistant replied, “Sorry, the promotion was not meant to be taken seriously. It is just advertising dear!”
Meanwhile, Tania has been looking to move into her new apartment. While surfing the web later in the day, Tania went onto the Gumtree website, read some terms on their website and came across the following advertisement:
“Second-hand study furniture for $500- study table and chair only. Mahogany wood.”
Tania emailed the relevant contact person (Dorothy) as follows: “I am very keen to purchase your furniture but how old is your furniture and would you accept payment in 2 instalments?”
Dorothy replied stating: “I’m sorry but I need the funds urgently in a lump sum. The furniture is 5 months old.” Tania emailed back four days later stating “I accept.” Dorothy replied stating “I’m sorry but I have already sold the furniture to someone else. There is no contract between us!”
Advise Tania on the following questions:
It is important that you outline the issue, relevant law (legal principles), application and conclusion (IRAC) for questions (b) and (c).
(a)Explain what are the elements to form a valid contract. Provide relevant definitions and refer to relevant case-law in your answer.
(b)Was there a contract to sell Tania:
i) the IPhone Geni 3+ at the displayed price of $700 and ii) to provide the discount of 50% on future purchases.
Answer this question using the IRAC format. Refer to relevant case- law in your answer.
(c)Was there a contract between Tania and Dorothy regarding the purchase of the furniture for $500?
Answer this question using the IRAC format. Refer to relevant case- law in your answer.
(d)Tania is curious about the types of terms that could apply to purchases (online or otherwise) and is uncertain what consequences could apply if she inadvertently breached certain terms.
Review the topic on ‘Terms of a Contract’ and advise her on types of terms that exist and what remedies are available where a term has been breached.