Business Law - Case Study

A. Known Facts John wanted to extend his house and built an office from there. He approached Sue after locating an advertisement from the Yellow Pages. As Sue’s price did not seem reasonable, John then approached Drawit Pty Ltd, which charged a hundred dollar less. John paid a deposit. Later, John went to Franks Hardware and Timber Yard. He made known to Frank, the sole proprietor, the purpose and requirement of the materials and placed an order. John signed a standard form contract and paid a deposit. Two months later, problems arose which caused John to delay his business. John incurred financial losses. B. IDENTIFYING THE ISSUES

1.0 CONTRACT BETWEEN JOHN & FRANK.

It is obvious that there is a contract for the sales of goods between Frank and John. Therefore, terms implied by statute into the sales of goods will only be relevant here.

1.1 Is it a consumer or non-consumer contract?

Here, we need to consider the definitions of consumer both under Trade Practices Act (TPA) and Goods Act Part IV (GA-IV).

As the total price of the goods is $20,500, it is under the TPA s4B(1) (a)(i) prescribed limit. Having satisfied this, we need to consider s4B(1) (a)(iii). There is no evidence showing that John had acquired the goods for the purpose of re-supply or transform them. It might be a consumer contract under TPA.

$20,500 exceeds the threshold amount under GA-IV s85(1) (a). John then needs to satisfy s85(1) (b). His materials were of a kind that is ordinarily acquired for personal consumption. Moreover, s85(1) (c) and (d) did not apply. Therefore, it might also be a consumer contract within s85 of the GA.

A consumer contract subjects either to TPA or GA-IV means that Goods Act Part I do not apply.

1.2 TPA or GA-IV?

A seller must be a corporation to be under the TPA. As Frank Hardware is a sole proprietor, it therefore is not subjected to the TPA. It then must fall under GA-IV. GA-IV applies to all consumer