Summary of the Constitution Developed by Your Tribe in Workshop 1

Foreign Country Selected – United Kingdom

The objective of the given task is to carry out a review of the UK legal system in wake of the description provided by Hart for legal systems.

• Rule of recognition

This is essential so that for sourcing of law there are only certain identifiable sources rather than an arbitrary power having the power to make laws. This is inherent in the legal system prevalent in UK as the sources of law can be identified.  One of the sources is common law which is essentially a provider of broad principles which adhered to in the formation of new law and judicial decisions. The other is stature law which indicate the laws formed by legislation. The last source of law in UK is EU law which may be explained on the basis of UK being a part of EU till recently when Brexit happened 

The various sources of law in Australia are also comparable are highlighted below.

• Constitution
• Statute Law
• Common Law
• Case Law

In Australian scenario, the role of constitution is significant which is absent in case of UK since it does not have any written constitution. Therefore, reliance in UK is on established processes and conventions.

In the UK legal system, the process of making law is well defined and there is no arbitrary process involved. Additionally, the rule making powers are vested with the legislature which is entrusted with the task of making new legislation and also repealing those old laws which are repressive and not appropriate. Additionally, through the petition system, it is also possible for the people to bring about a change in law for which there is overwhelming public support.

Australia also has a defined law making process which is on the lines of UK system owing to colonial ties. The legislature is entrusted with making laws based on the subjects on which they are authorised to make laws which is decided in accordance to the Constitution. Further, even though there are powers to change law available with the parliament, there are suitable checks and balances in the form of judicial review.

• Rule of Adjudication

It is essential that mechanisms to adjudicate on the various issues that arise must exist This is the primary role of the judiciary but in the UK, some judicial powers were also available with the other organs of the government. However, recent structural changes have corrected these imbalances. The UK boasts of a system of courts which forms a hierarchical system and is the primary provider of adjudication. This is not only provided to citizens but also to the government.

The separation of power as exhibited in Australia is significantly more rigid than in UK and hence the adjudication process is served by the courts which exist at different levels and deal with specific matters that may arise. To provide aid, administrative tribunals also exist on account of merits review system.

Issue

The major issue in the light of the situation presented is that can Barry hold the contract void if he wants to do the same.

Sources of Law in UK

With the intention of luring the buyer, a seller makes numerous representations about the product. However, it should not be expected that all of these are true since representations lack legal enforcement unlike terms. The act of intentionally indulging into misrepresentation with the underlying objective of luring buyer into execution of contract is known as fraudulent misrepresentation and such contracts are held as voidable on the request of the innocent party that entered the contract in good faith.

In order to establish misrepresentation, the plaintiff needs to be established that the following two conditions are satisfied.

• The nature of the representation which has been misrepresented must be factual. This is imperative since in relation to opinions, it is difficult to prove that these are falsely stated. Therefore, it is imperative that factual information must be conveyed wrongly by the seller to the buyer. Also, it is noteworthy that silence on the part of the seller does not amount to misrepresentation. 

• Another crucial requirement is that the information that is misrepresented should be significant to buyer in the context presented. As a result, misrepresentation would not be the result of falsification of non-material factual information. Additionally, it is noteworthy that if the buyer is given a reasonable chance to verify the representations made, then the buyer must not act negligently or later the misrepresentation claim would not arise. This is indicated in the Redgrave v Hurd 

Further, the relevant statute law that would apply is the Competition and Consumer Act, 2010 (Also called as Australian Consumer Law). For a consumer buying any vehicle, there are implicit customer guarantees which are extended that must not be breached. Additionally, s. 18 deals with misleading advertisement where it is essential that for the plaintiff to apply for relief must have suffered real losses. 

It is evident that in the given scenario, Angelo has presented wrong factual information dealing with the financial performance of the grocery business. These facts are significant from the buyer’s point of view and contractual decision making considering that to begin with, it was the impressive numbers that caught Barry’s attention. The result of this misrepresentation is to derive a higher consideration and also to tempt Barry into buying the grocery business.  Also, it is highly likely that if the financial performance of the business would have been presented correctly, then Barry would not have surely entered the contract at the valuation offered. On the basis of the above, it is evident that there is fraudulent misrepresentation on part of Angelo due to which the contract for grocery business sale would be considered voidable. 

There is clear violation of the implied customer guarantees in relation to the van since Angelo did not inform Barry that the van is not owned but has been leased. This provides Barry the right to demand refund on the van. Besides, Angelo’s conduct has also violated s. 18 due to use of advertisement which was potentially deceiving for possible buyers and in wake of the actual losses suffered by Barry. Hence, Barry can demand compensation in lieu of the damages suffered due to violation of s. 18(1). 

Conclusion

The application of the relevant law to the given situation clearly highlights that on account of misrepresentation, the contract for grocery business sale is voidable. Also, Barry can be granted relief under the statutory law i.e. Australian Consumer Law due to violation of key provisions as has been discussed above.

Issue

The possible course of action needs to be discussed here based on the assumption that Barry cannot come out from the contract. Hence, the issue is to determine whether there is a breach of contract or not based on the given facts

The key significant aspect in regards to prevent the breach of contract would be to comply with contractual terms. The terms may be expressly highlighted in the form of written contract or the terms may not be stated directly and hence would be categorised as implicit terms. The representations of the seller would be terms of the contract only when the following aspects are satisfied. Any contract would assume to be breached only when the term of the contracts has been breached.

Sources of Law in Australia

In accordance with parole evidence rule, the representation of the seller which has found a place in the written contract form would be called as term of the respective contract.. Similarly, oral representation by the seller would not be taken as contractual term because if the contract enactment relies on the representation done orally, then contracting parties must have placed these representations in the written form.

The representor must have sufficient skill or position to verify the authenticity of representations. According to the decision given in Oscar Chess Ltd v Williams case, if the seller has the ability to verify the authenticity of the representation, then it would most likely be categorised as term for the contract. This is the case, where the buyer party who does not have sufficient knowledge and hence, has to rely on the skill of the representor seller to verify the functionality of the product.

When the representation is itself significant for the buyer to enter into contract, then the representation would become contractual term. The decision announced in Bannerman v White case is the evidence of the above scenario. The hobs quality of being treated with sulphur was an imperative aspect on the part of buyer. Also, during the pre-contractual, the buyer had stated that he would ready to buy hobs only when they are treated with sulphur. It indicates that sulphur treated hobs is an essential element for contract enactment and hence, is a term of contract. Further, seller did not provide him sulphur treated hobs and hence, there was a breach of term of contract by seller.

Applying the above highlighted rules and understanding to the case, it can be said that the representation stated on behalf of Angelo is very critical aspect for the decision of Barry to enact a contract with Angelo. Therefore, it would be fair to conclude that these representations are terms of the contract. The following are the evidence of the above decision.

Barry wants to enhance the income and therefore, he wants to leave job and buy a business.

It is apparent that searching a business with good financial position is the pre-requisite condition for Barry.

Angelo has put an advertisement which shows good financial position of the business with significant revenue, less expense and no competitors.

It is also apparent that Barry is impressed with the advertisement and decides to buy the business by enacting a contract with Angelo.

Also, Angelo does not extend him any books related to the business financial status. Hence, the only source of information for Barry is the representation of Angelo.

It is apparent that if Angelo has provided the real figures of the business financial status, then Barry would not have purchased business especially at the current price.

Hence, it would be fair to conclude that the representation of Angelo is considered as term of the contract. The actual figures of the financial figures are entirely different from the real figures. Further, it is also noticeable that the express terms for contract i.e. worth of van and loader are also not as per the representation made by Angelo. This is because Angelo has mentioned that loader worth is $2000 which is not correct and also the van is on lease and hence, it is essential to pay the lease amount. Hence, it can be said that contractual terms have been breached and thus, Barry is innocent party and  can demand the respective damages from Angelo.

Conclusion

It can be concluded based on the above understanding that the representation made on the part of Angelo are significant parameter for Barry to enter into contract of buying business. Therefore, the representations of Angelo would be term of the contract. Also, there is a breach of contractual term and thus, innocent party Barry can claim for the financial damages from Angelo.