Legal Studies Essay Joey Ager holm Exclusion clauses determine the liability of something that might go wrong within a contract. They are used by sellers as an attempt to avoid or limit their liability. The seller has the advantage over the buyer who must agree to the clauses to purchase the product / service. Because of the buyers disadvantage the court takes such cases, involving exclusion clauses, very seriously, and the content of the clauses are carefully interpreted. With the current Trade Practises Act and the Fair Trading Act the standard form of business contract is adequate and effective in protecting the buyer.
The Trade Practise Act is the most effective legislation for the protection of the consumer. It implies to the following situations: - - "A promise by the seller that the buyer will become the owner" If a car dealer breaks a promise or part of a contract, for example that he has the right to sell a car, and the car is stolen then although the buyer will have to give the car back he / she will get her money back. - " A promise by the seller that goods will fit the description supplied by the seller" In this case the buyer is protected if the seller makes a promise, which is a condition of the contract, describing the product, and when the buyer receives the product, it does not match the description. - " A promise where the seller is made aware of the purpose for which the goods are required, that the goods will be reasonably fit for that purpose" This condition is implied when the buyer makes the purpose of the goods needed known to the seller, and the buyer then relies on the seller's judgement in providing the correct product. For example it would not be reasonable if you made the seller aware that you wished to purchase something suitable for mowing the average suburban backyard and you were sold a tractor.
- "A Promise that goods are of merchantable quality" According to this act a good is considered to be merchantable if they are suitable for the prospect for which other similar goods are sold, involving the description applied to them, the price and any other relevant information. This act does however does not protect the consumer if he / she has examined the product and missed any defects that should have been seen or if the seller made him / her aware of the defect prior to the purchase of the product. - "A promise that goods purchased on the basis of a sample will match the sample" Here the consumer is protected if he / she purchase, for example paint, on the basis that it matches the sample shown in a sample booklet. These terms do provide adequate protection if the buyer is effected in such circumstances. There are a number of sellers who attempt to deceive the buyer through conditions of contracts however most standard form contracts contain reasonable exclusion clauses, meaning acts such as the Trade Practises Act are not necessary to resolve problems. For example the conditions of the attached RACQ advertising contract.
Each condition is fair and to be expected. For example condition 8, which states that the advertiser may at any time cancel or alter an advertisement so long as the publisher is notified in writing prior to the deadline date. It is common sense that the publisher would need to be informed of any changes before the deadline so the buyer, in this case the advertiser, is not being hardly done by. It may be said that the buyer is effected by the condition when it states that the change must be in written form.
It could be argued that if a decision is made within hours of the deadline it is unreasonable to expect the alteration in written form. However with current technology a letter can be faxed and received within seconds. The Fair Trading Act along with the Trade Practises Act has been introduced to ensure that the consumer in particular is protected. For example Section 53 of the Fair Trading Act which states "A person to whom unsolicited goods are supplied by another person in trade or commerce is not liable to make any payment for the goods and is not liable for the loss or damage to the goods other than loss or damage resulting from the doing of a willful and unlawful act in relation to the goods during the period specified in subsection 4." . This means that if the consumer is sent the wrong goods then they do not have to pay for them.
However the section also provides protection for the seller. If the goods are damaged within three months of the goods being delivered or within one month of the consumer making notification then the seller may be protected. The act and the following case study support the hypothesis that the buyer is protected. In the case of Ernest Beck and Co v Szymanowski and Co (1924) AC, "a contract provided that if the buyer did not return goods delivered within fourteen days the buyer lost any right to return the goods. The buyer discovered after the fourteenth day period that the goods received were not the goods ordered. The buyer returned the goods.
The seller tried to rely on the exclusion arguing that since the fourteenth day period had expired the buyer had lost the right to return the goods. The Court disagreed. It interpreted the exclusion clause very strictly and found that it applied only to goods delivered." Because the requested goods were not delivered the exclusion clause did not apply to this case. Exclusion clauses are also involved in articles not involving the signature of both parties. Such documents involve notices, signs and tickets. For the notice, ticket or sign to be passed it must be reasonably deemed that the purchaser knows of it.
For example the attached conditions of school train pass can be taken. The buyer or commuter should be aware of the conditions as they are placed on the back of the ticket. The conditions of the ticket, like the RACQ contract, are reasonable and do not extend the expectations for conditions of similar tickets. Although the commuter may be disadvantaged by some of the conditions they are not unfair. For example condition 8 states that "Non Refundable fare must be paid if ticket is not produced." Although the commuter may have paid for the fare in the price of the train pass / ticket, the ticket inspector needs proof (on the spot). In this case the condition does favour the seller however it is not unfair to the buyer.
In conclusion the standard form of business contracts and the Trade Practises and Fair Trading Acts do provide the seller and in particular the consumer adequate protection. Although the court and the current acts do solve cases debating exclusions clauses, if the few less honest sellers in particular could follow the phrase "Honesty is the best policy" and produce conditions of contracts not based on deception.