Assignment Task:
Part A – Case Study
Carl owns a café in Ultimo. Last week Carl purchased a ‘Coffee-2000’ espresso machine for $60,000 from Coffee Co Pty Ltd to use in his business. The machine seemed perfect for Carl’s café, with the ability to make 4 shots of coffee at once, and two milk-frothing nozzles for cappuccinos. The final sale agreement included Carl paying an immediate $8000 deposit, with ongoing weekly payments of $2000 required for six months.
When buying the machine, Carl told the sales person [Marge] that he needed it for his café, and that it was important the machine was reliable. Carl explained how many staff worked at the café, how many customers were served each day, and that the café was open for business seven days per week, from 5am to 8pm. Marge assured Carl the Coffee-2000 was the ideal machine for his café, good stocks are on hand, and immediate delivery & installation can be arranged.
Finalising the sale, Marge prepared the Coffee Co order form, which Carl signed. Immediately above the signature field was a printed statement in bold text: “This agreement is subject to the terms and conditions on the reverse side of this page”. Carl was very busy and did not read them. Marge told Carl that the form was their ‘normal sales order form’ for all sales of coffee machines. Among the various terms and conditions on the reverse side of the page was term #4:
4. Coffee Co Pty Ltd accepts no liability for any loss or damage, whether physical or economic, due to breach of contract, failure to perform, or any other reason whatsoever.
The machine is delivered to Carl’s café and installed. A few days later start complaining about a bitter aftertaste in their coffee. Consulting a coffee machine technician, Carl learns that the Coffee- 2000 has filters that require cleaning after 4 hours of operation. Each filter takes over an hour to remove, clean, and replace, and the machine cannot produce coffee during this time. Carl is furious that his expensive purchase is not suited to his business.
Researching the Coffee-2000, Carl also learns the manufacturer recommends the Coffee-2000 be used in cafes for the morning ‘coffee rush’ period only, to allow for daily cleaning of the filters, and to limit use to 5 days per week preferably in small cafés, to extend the life of the internal plumbing and mechanical parts. The Coffee-2000 is only expected to last one year in a high-volume café, and will then require an expensive refit. The manufacturer also sells a Coffee-4000 model for use in high volume cafés, with a completely different filter design and mechanical lifespan.
The manager at Coffee Co refuses to provide Carl a refund, and as his machine has been used also refuses to trade it in on a Coffee-4000 model [priced at $95,000]. The manager shows Carl the terms and conditions from the sale, which Carl claims not to have known about. Carl insists term #4 is not part of their agreement. They argue, with Carl threatening not to make any payments and the manager threatening to take legal action to recover the payments from Carl, plus interest.
Required:
1. Discuss contract law in relation to Carl’s situation, including remedies available and the likely outcome.
2. Discuss the Australian Consumer Law in relation to Carl’s situation, including remedies available and the likely outcome.
Part B – Research Task
Businesses within Australia operate within a legal framework based on the fundamental common- law principle of legal precedent, and an adversarial approach to dispute resolution. Some other countries also use similar common law systems, however many do not.
First, research the legal systems of other countries, and choose a country that does not use common-law.
Required:
Compare and contrast how the legal system of your chosen country differs from the Australian legal system, specifically regarding the role of precedent, and the role of judges in dispute resolution. You must include examples of each, to support your comparison. You must include relevant legislation and/or case law [as applicable].
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