Commercial Law – 70327 Exam notes
Contents
Seminar 1: Introduction to concepts of personal property (possession and title) ... 7
Definitions ... 7
What is property? ... 7
Types of property ... 7
Real Property ... 7
Personal Property ... 7
Rights in property ... 8
Difference between title and possession ... 8
Possession of personal property ... 8
Finders right ... 8
Seminar 4: Australian Consumer Law (Part 1) ... 10
Key Provisions of ACL ... 10
ACL definitions ... 10
Definition of consumer ... 10
Definition of ‘Person’ ... 10
Section 2: Definition of trade or commerce ... 11
Consumer Law Remedies ... 11
Structure of Australian Consumer Law ... 11
S 18: Misleading or Deceptive Conduct ... 12
Exemptions to deceptive or misleading conduct – Section 19 ... 13
Remedies for misleading or deceptive conduct Set out in Chapter 5 ACL ... 13
Unconscionable conduct ... 14
Unfair contract terms regime ... 16
Remedies for contravention ... Error! Bookmark not defined. Who enforces the law? ... 19
Who decides if a term is unfair? ... 19
NSW Fair Trading: ... 19
Seminar 5: Australian Consumer Law Part 2 – ACL Statutory Guarantees ... 20
Consumer guarantees regime (CG) ... 20
Key concepts ... Error! Bookmark not defined. ‘Consumer’ ... 20
Not only original consumer protected ... 20
‘Supply’ ... 21
‘Goods’ ... 21
‘Service’ ... 22
Guarantee of ‘Acceptable quality’ – s 54 ... 22
Elements for guarantee of acceptable quality to exist ... 23
Other matters to be taken into account when determining acceptable quality – s54(3) ... 23
Exclusions for liability relating to acceptable quality s54(4-7) ... 23
Guarantee as to ‘Express warranty’ – s 59 ... 23
Consumer Guarantees in relation to goods – Key provisions ... Error! Bookmark not defined. Subdivision B – Guarantees relating to the supply of services: ... Error! Bookmark not defined. Rights and remedies... Error! Bookmark not defined. S 259 Action against suppliers of goods ... 27
Main remedies under the ACL include:... 28
260 when a failure to comply with a guarantee is a major failure ... 28
Remedy for major failure: s 259(3) ... 28
261 How suppliers may remedy a failure to comply with a guarantee ... 29
262 When consumers are not entitled to reject goods (restrictions for rejection) ... 29
263 Consequences of rejecting goods ... 30
264 Replaced goods ... 30
265 Termination of contracts for the supply of services that are connected with rejected goods ... 30
266 Rights of gift recipients ... 30
Subdivision B – Action against suppliers of Services ... 30
267 Action against suppliers of services ... 30
S268 – When a failure is a major failure (SERVICE) ... 31
Damages - Supplier ... 32
Indemnification of suppliers by manufacturers ... 32
268 When a failure to comply with a guarantee is a major failure ... 32
269 Termination of contracts for the supply of services ... 33
270 Termination of contracts for the supply of goods that are connected with terminated services ... 33
Consequential loss ... 33
Reasonably foreseeable loss ... 33
Exclusion clauses ... 33
Liability of manufacturers ... 33
Definition of manufacturer ... 34
Meaning of safety defect ... 35
Product liability ... 35
S138 the consumer has suffered loss or damage; ... 35
S139 a person other than the consumer has suffered loss or damage; ... 35
S142 Defences to defective goods actions ... 35
Defective Goods Actions ... 36
No ‘contracting out’ of manufacturer’s liability ... 37
Available remedies for defects ... 37
Seminar 6: Financing and Bailment ... 37
Common forms of business finance... 37
Difference between sale of goods and license, lease or hire purchase of goods? ... 38
Definitions ... 38
Ownership differences ... 38
Advantages of finance, leasing and hire purchases ... 39
Finance lease vs operating lease ... 39
Operating lease ... 39
Finance lease ... 39
How to choose? ... 39
What is bailment? ... 40
1. Parties to a bailment ... 40
2. Types of bailment ... 40
Elements of bailment ... 41
Hobbs v Petersham Transport Co Pty Ltd ... 41
Bailments vs Licenses ... 41
Distinguish bailment from a license ... 41
Obligations and duties of the BAILEE (person being given the goods) ... 42
Duties of a Bailee: Obligation to redeliver ... 42
Duties for the bailee – Reasonable care ... 42
Liability of bailee for employee and agents ... 43
Duties of Bailor ... 43
Hire of Goods ... 43
At Common Law ... 43
Australian Consumer Law ... 43
Sub-bailments ... 44
Exclusion of liability ... 44
The role of contract law ... 44
The principles applied vary according to whether the articles are found:
in house not used by owner
in the land;
attached to land; or
on land
In the course of employment
Armory v Delamire (1722) – Chimney Sweep finds jewel
FACT: A chimney sweep’s boy found a jewel and offered it to a jeweller for sale. The jeweller refused to pay an acceptable price or return it.
HELD: the jeweller was liable to the boy for the value of the jewel.
“[T]he finder of a jewel, though he doe not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner”.
Hannah v Peel [1945] – Brooch found in house never used by owner
Fact: Defendant was the owner of a house which he had never himself occupied. When the house was requisitioned, Plaintiff, a soldier, found a brooch in a bedroom, the owner of which was unknown.
• There was no evidence that Defendant had any knowledge of the existence of the brooch before it was found by Plaintiff; but the police to whom Plaintiff handed the brooch to ascertain its owner, delivered it to Defendant who claimed it as being on promises of which he was the owner.
Held: Plaintiff, as finder, was entitled to the possession of the brooch as against all others than its owner.
South Staffordshire Water Co v Sharman [1896]
FACT: Plaintiffs hired Defendants to clean a pool situated on Plaintiff’s land, within which, during the cleaning, Defendants found two gold rings and thereafter refused to give the rings to
Plaintiffs.
REASONING: This case is decided and distinguished from the decisions of Armory v. Delamirie, and Bridges v. Hawkesworth, by the principle that
• possession of land carries with it a de facto possession of everything that is upon the land, so long as the landowner exercises his general power of ownership over the land and expresses intent to disallow interference from others.
• Thus, the location of the pool, being private rather than public, was never outside of Plaintiff’s general power of ownership.
McWilliam’s Wines Pty Ltd v McDonalds System of Australia Pty Ltd (1980) 49 FLR 455 FACTS: The name ‘Big Mac’ was used by McWilliam’s Wines as the name of a
wine it was marketing. McDonalds, who sell ‘Big Mac’ hamburgers, complained that it was misleading for somebody else to use the name.
ISSUE: Was McWilliam’s Wines’ use of the name misleading?
DECISION: It was not misleading. The difference between wine and hamburgers was clear.
Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177
FACTS: A Mexican restaurant in Sydney opened under the name ‘Taco Bell’; another corporation that had used that name in Sydney over the previous five years for its Mexican restaurant brought an action under what is now s18.
ISSUE: Was the second restaurant’s use of the name misleading?
DECISION: The confusion created by the two restaurants using the same name became misleading because (1) they sold the same style of food; (2) there was no label to correct the confusion, and (3)when consumers went to the restaurants they would not realise which was which and could thus be misled.
Exemptions to deceptive or misleading conduct – Section 19
• The ALC exempts certain ‘information providers’, most notably the news media, from the general prohibition of misleading or deceptive conduct (MDC): s19
• However, the exemption does
not extend to statements such information providers might make in an advertising context (s19(2)),
which will therefore remain subject to the prohibition of MDC in s18.
An information provider is not protected
• where the misleading statements were made under a contract, arrangement or understanding (CAU)
• with a person supplying goods or services of the type which was the subject of the publication: s19(3)
Remedies for misleading or deceptive conduct Set out in Chapter 5 ACL
• Essentially, the purpose of s. 18 is to create a ‘norm of conduct’ for a trader to meet—that in the course of encouraging, obtaining and carrying out their business they ensure they always provide a ‘truthful impression’.
• Injunctions
• Damages
• Compensatory orders
o Remedies for ACL are > than Sale of Goods as they are statutory remedies, whereas SOG is directly related to the breach.
• Civil penalties and criminal sanctions do not apply to s 18 because of broad scope
