Johnny decided to order organic fruit for his restaurant from a new supplier, George. When he reads through the terms of the written contract given to him by George, he sees that while George guarantees that the fruit will be ‘fresh’, the contract says nothing about whether the fruit will be organic.
Johnny asks George about this, explaining that he tells his customers that his fruit is always organic. George assures him that the fruit will always be organically grown. Johnny then signs the contract without changing it.
The next three deliveries include fruit that is not organically grown. Can Johnny legally enforce George’s verbal promise about the fruit?
Issue 1: A term of the contract
Issue 2: collateral contract
Issue 2: collateral contract – Application
Issue 3: misrepresentation
Issue 3: The legal issue at hand is whether the verbal promise by George is a misrepresentation.
Revision Question 1, Issue 3: misrepresentation (cont)
Conclusion: Johnny is entitled to terminate the contract and seek damages because of George’s assurances.
Issue 4: statutory rights
Issue 4: Johnny have any rights under statute
Issue 4: statutory rights (cont)
Revision Question 2
At an auction for the sale of a particular farm property of 1,000 acres, the auctioneer claimed that 700 acres were cleared and ready for agricultural use. Hank bought the property and signed a contract of sale, but later found out that only 300 acres were cleared. No mention of any clearing of the land was made in the contract.
Advise Hank of his common law rights.
Note: An auctioneer is the agent of the vendor, hence the vendor is normally liable for the auctioneer’s statements.
Revision Question 2: misrepresentation
Issue: Hank may claim that he has remedies against the auctioneer on the grounds of misrepresentation
Rule: To succeed in misrepresentation, the aggrieved party must show:
Revision Question 2: breach of contract
Issue: the legal issue at hand is whether the statement is a mere representation or a contractual term?
Revision Question 2: breach of contract (cont’d)
Is it a condition or warranty?
Revision Question 2: conclusion
Revision Question 3
Beryl decides to open a health food deli in the heart of the city and hopes to attract lunch-time crowds. She goes to Zap Pty Ltd the largest microwave dealers in the central business district. She advises the salesman that she requires a reliable and durable microwave for commercial purposes to be used exclusively in her deli. The salesman recommends the Duro Model 3000. Beryl returns to Zap Pty Ltd, the same day and purchases the Duro Model 3000 microwave. Within days of purchasing the microwave Beryl discovers the microwave either burns the food to charcoal, even on the lowest setting, or fails to heat the food altogether.
Advise Beryl of her statutory rights, if any, against Zap Pty Ltd.
Question 3: s 3 ACL
Issue: whether Beryl has access to the implied terms as expressed in the goods Act and ACL and can hold the supplier and or manufacturer liable for breach of these terms.
Question 3 s 54 ACL: rule and application
Is the microwave of “acceptable quality” under ACL s 54?
Question 3 s 55 ACL: rule and application
Is the microwave “fit for its disclosed purpose” under ACL s 55?
Question 3: s 56 ACL: rule and application
Does the microwave correspond with its description under ACL s 56?