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Writea legal analysis based on the following law and scenario using IRAC. Here is your summary of the case law principles on consumer contracts. In

Writea legal analysis based on the following law and scenario using IRAC.

Here is your summary of the case law principles on consumer contracts.

  1. In a consumer or retail transaction, a merchant can only enforce a contract term limiting the merchant's liability for damages, if the merchant did everything reasonable under the circumstances to specifically bring the term to the consumer's attention before the contract was completed.
  2. The person relying on a limitation term must prove that the consumer had proper notice of the term.
  3. Once a contract is completed, it can only be modified if there is a new exchange of value between the parties.
  4. The person relying on a contract modification must prove that there was a new exchange of value.

Facts

Jim is a student on a limited budget. Jim decided to buy a car from a used car lot. He wanted the car so that he could take a part time job delivering pizza to pay for tuition and books, and a nicer apartment. Jim was living in a dump and, for $200 more a month, he could live closer to school in a clean, air-conditioned studio.

After test-driving several cars, Jim settled for a used 2001 Ford that purred like a kitten. Jim met with the salesman and bargained over the price. Jim and the salesman agreed Jim could buy the car for $1,000 down and a $7,000 dealer-financed car loan.

When Jim started to read the small print terms on the back of page four, the salesperson told him, "Take your time, but don't worry about it, it's a standard form warranty." Jim signed without finishing reading the warranty.

Four months later, Jim's new car is roaring like a lion and using up to two litres of oil a week. Jim returned to the lot where he purchased his car and complained, asking them to fix the car or replace it. The salesperson told Jim that the warranty in the contract only provides redress if the car breaks down in the first 30 days of ownership.

Jim took the job delivering pizza and moved into the more expensive studio apartment. Jim needs a car that works and does not cost him a fortune to run.

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