Question 1 (a)

The issue in this case addresses whether there is a valid contract occurred between
Avinash and the café.

An invitation to treat is the outflow of a person’s readiness to arrange an offer. It

basically means that the offeror is letting you to bargain on the price of goods. These includes
showing goods for sales, giving out brochures and advertising in the media though the
offferee accepts the price suggested. Displaying goods for sale came about when the court
considered Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern)
Ltd1, where offeree can put back the goods even when the offeror indicates the price to
display of the goods to sell. Therefore, it is an invitation to treat as they have placed it there
to just show the customers. Allied to Fisher v Bell2 case. However, any potential buyer has to
make an offer to the seller so they can decide on accepting or rejecting the offer.

In this case, the invitation to treat was the menu which was displayed on the touch
screen located at the counter of the café. In the menu, images of desired product are shown.
When Avinash wants to purchase his food he needs to use the menu. According to
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd3, display
of goods are considered as advertisements so this falls under invitation to treat.

So, offer is a promise made or refrain something in trade for something from another
party.4 Offer happens individually or publically and it has to be clear and unambiguous. Offer
is made if it is capable of acceptance to form a contract with the offeree. In the case of
Harvey v Facey5 where there was no contract made as Harvey sent a telegram (instantaneous
communication) of asking information about the product which has be advertised. Thus, there
were no proof that it was an offer.6

On the other hand, acceptance happens when you decide on accepting the offer. It has
to be expressed in a verbal or written contract or implied. When acceptances happen then

1
(1953) 1 QB 401.
2
[1961] 1 QB 394.
3
Ibid n 1, 89.
4
S Graw, An Introduction To The Law of Contract (Thomson Reuters, 8th ed, 2015)
5
[1893] AC 552.
6
[1962] 1 QB 394.
there will be a binding contract. The acceptance of offer will be considered not
communicated until the offeror receives any form of communication. Similar to Brogden v
Metropolitan Railway Company7 as there was a valid contract when the both parties agreed
on the price and paid and was delivered their purchased product. Even though there was no
communication of both parties but there was still contract made as they performed the
contract.

In the case given, offer and acceptance happens when Avinash accepts the condition
of the food when he saw the desired product and clicks ‘OK’ button to purchase his food and
submit his order and acceptance happens when the machine printed the receipt. In similar to
Hyde v Wrench8 case where the offerer accepts the offer made by the offeror. Acceptance
has to be communicated clearly. Therefore, the part when Avinash got his printed receipt
caused a clear communication. If communications is not delivered clearly then they might not
have contract as this relates to Felthouse v Bindley9 case where the court has decided that
they have no contract due to their communication issue.

Consideration is an exchange of promises that had been established. The promises

must have a value which can be both positive or negative.10 One of the rules that has in
consideration is that necessary in all simple contracts and past consideration. Past
consideration are consideration that happens in the future when the past consideration said it
was not a good consideration. This involves bargaining. It is illustrated clearly in the case of
Eastwood v Kenyon11 which did not cause any gratuitous promises12 and was missing on
an element (acceptable consideration).

Other than that, consideration is formed when Avinash pays and get his food. Also,
when the cashier takes his money. By applying the law to this situation, Avinash was doing
was he has to do to get his food. Just like in Dunlop Pneumatic Tyre Company v
Selfridge13 where Dunlop could not enforce the contract as he was not part of an agreement

7
[1887] 2 App Cas 666.
8
[1840] 49 ER 132.
9
[1862] EWHC CP J35
10
C Miles and W Dowler, A Guide to Business Law (Thomson Reuters, 20th ed, 2013)
11
[1840] 113 ER 482.
12
Defines as a promise made without consideration.
13
[1915] AC 847.
(third party). Also, Dunlop did not give any consideration to Selfridge and therefore there is
no binding contract14.
In conclusion, Avinash and the café are bound by the contract.

14
An agreement in written form between two parties or a party where court can impose
penalties if promises at neglected by any parties.
Question1 (b)
Issue
The issue of this case states the damage of Avinash tooth when eating the pastry, but the
manager mention there is an exclusion clause that states on the ticket as a term of contract. So
will Avinash successfully exchange his payment for dental procedures.

Rules
Exclusion clause is a unique term where in a contract there is a purpose of which it
can be fully ignored or limit in some way, if parties should breach the contract or not. It is
basically caused to prevent the consumer to use their legal right to sue the firm.15 There are
two main requirements that will make an exclusion clause valid. Firstly, the exclusion clause
has to be part of a contract. Second, is to have a clause which is clear and specific to cover
the type of loss suffered by the other party. If the exclusion clauses are satisfied by the two
requirements, then it will be accepted by the court. This is because it is legally binding and
the other party cannot sue as there is a breach of contract. There are two rules which is
unsigned documents and signed documents. In this case there were no signed documents so it
is a contract under unsigned document.

The general rule for unsigned document is when there was no document that had been
signed by either party to a contract.16 Usually exclusion clause is included in tickets or
dockets because the terms can be seen by the public visibly. Also, it could be made when the
ticket or docket is given. The courts apply two simple test which is called nature of document
test and the reasonable notice test.

This test contains the court to check the facts and decide whether the exclusion clause
is placed visibly. If customer has considered that purpose of the document as a transaction or
payment of proof, then it concludes that the business operator did not notify them so they are
unable to rely in the clause. The court will conclude saying the document was a contractual
document which therefore will lead to reasonable notice test. Similarly, to Causer v Browne

15
S Davenport and D Parker, Business and Law In Australia (Thomson Reuters,2012)
16
A Gibson and D Fraser, Business Law (Thomson Reuters,3rd ed, 2011)
17
case where the dry cleaning agency gave him a docket which contained his name and few
details which included a clause in small.

This test will be applied when the the customer fails. Also this requires reasonable
steps that are needed to be taken by the business operator to bring the clause to customer by
giving them attention. It may possible to revoke the test. This applies to Parker v South
Eastern Railway Co18 case when Parker did not know about the terms at the back of his
ticket.

Under section 60 of the Australian Common Law, contracts are for the supply of
services to consumers that have implied warranty that their services will be rendered with due
care and skill. In the case of Kovacevic v Holland Park Holdings Pty Ltd19, Kovacevic was
hurt while exercising at the gym and she told beforehand for her purpose of exercising which
is by having a safe and guided manner trusting on HPH’s guidance while exercising.
Therefore, The Queensland District Court held exclusion clause as it allows risk with slipping
when exercising on timber floors on timber floors.

Application
In Avinash case, Avinash did not know there was a contract behind the ticket. There
was an exclusion clause behind the ticket. However, he assumes that the ticket that is given to
him is an evidence or proof of his order. So this is an exclusion clause.

When the ticket is printed and there is an exclusion clause was printed at the back of
the ticket. This could not be relied on because the exclusion clause has not been told or
shown publically. Therefore, Avinash should not be blamed. The clause was too general and
did not state the liability limit towards the company.

According to Avinash's case, he broke his tooth due to the metal scrap found in the
pastry while consuming the pastry. This states clearly that the employee in the café did not
have care and skill in creating the pastry which is violates in the Australian Consumer Law. It
will be an ineffective exclusion clause according to section 60.

17
[1952] VLR 1.
18
[1877] 2 CPD 416.
19
[2010] QDC 279.
Conclusion
In a nutshell, the exclusion that has been stated on the ticket does not achieve the
terms for an unsigned document. So the Australian Consumer Law will void this contract
because if notice of the exclusion clause is not clear. By looking at section 60 of ACL, the
café has to take responsibility of their carelessness. Therefore, my suggestion to Avinash is
that he can successfully recompense his dental care fees from the café if he sue them.

Question 2
Express terms is when all elements are expressed of the terms in an agreement or
material either orally or in writing. Both the written and oral contract fall under express
contracts. Referring to case of Buckenara v Hawthorn Football Club Ltd20, Buckenara has
made agreement to not play for the competing club but then she insisted to play but then
Hawthorn did not allow as it will lead to breach of contract.

Next, implied contracts are contracts which are implied by law if the parties intended
or not. Although, parties may not have been intended but the law will imply this contracts.
Firstly, Implied terms are terms that are not in a form of written and spoken contract.21
Implied terms can arise in industry convention or custom where terms are combined in a
contract. Such as the British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd.22 In this
case, the both parties have made a contract through electronic device(phone). The terms and
conditions was given when the delivering the crane. However, the defendant did not know
about the contract. The court has implied it into both the parties.

Secondly, is having past dealings contract. It is referenced from previous dealings

between two same parties. 23It happens when the court wants to search in detail from the case
and to imply the missing terms in the current contract. According to Balmain New Ferry Co
Ltd v Robertson24, Robertson has to pay even though he has missed the ferry. There was a

20
[1988] VR 39.
21
Jane Knonwer and Charles Rickett, ’Implied Terms In Australian Contract Law: A
Reappraisal After University Of Western Australia v Gray’ (2011) Monash University Law
Review 145
22
[1974] 2 WLR 856.
23
C Miles and W Dowler, A Guide to Business Law (Thomas Reuters, 20th ed, 2013)
24
[1906] 4 CLR 379.
rule that is made from the previous dealings. It also similar with Hollier v Ramblier Motors
(AMC)25 case where exclusion clause was implied from the past dealings.

Thirdly, implied terms happen in business efficacy where the court imply missing
terms needed into the contract. According to the case of The Moorcock26, the owner of
vessel (case involving ships) sued them successfully as there were purposes under business
efficacy. Therefore, the river’s bed was safe from plaintiff’s barge and the term has implied
intro the contract.

Competition and Consumer Act 2010 (Cth) that replaced the Trade Practices Act
1974 (Cth) and Australian Consumer Law (Cth) (ACL) are the contracts under terms implied
by statute. Trade Practises Act 1974 (Cth) seeks to have a fair trading and providing safety
for consumers. On the other hand, ACL is when the seller gives information’s about the
goods to the buyers. Statutory implied terms are terms applied in ACL allows consumer to
have guarantees of their goods. Under this, it replaces consumer guarantees and breaches of
condition and warranty.

The example of both implied and expressed term case is BDM Grange Ltd v
Parker27 where the implied contractual terms happen when New Zealand High Court
breaches for its statutory duty. Expressed terms happen occur between employee and
employer as they did not have the Employment Relations Act 2000 (ERA)s5. Relating back
to Avinash case in question 1, implied term is the past dealings which the exclusion clause is
applied by the café and when Avinash paid for his food. Express term came in when he was
clicking ‘OK’ button on the displayed goods.

There are few benefits that implied terms have for the business. Firstly, by having
past dealings is beneficial to the company as it will be against the customer who did not
follow regulations of the business that has been operating for long28. In this case customers
cannot prevent themselves from getting sued due to they were not willing to pay. This
ensures that the business will keep operating as it continues to protect customers.

25
[1972] 1 All ER 399
26
[1889] 14 PD 64.
27
[2005] BCL 741
28
D Parker and G Box, Business Law for Business Students (Thomson Reuters, 3rd ed, 2013)
 Moreover, implied terms happen in industry convention or custom which is terms that
can incorporate in a contract even if parties did not express. Like for an example, companies
usually require a medical check up for employees that have registered. This is a term that
should be implied even though it was not stated in the contract. Now, implied terms that are
in written and verbal form will not be used in any rules. In the case of Hutton v Warren 29
where Warren did not corporate with the law due to the lease was quiet on that matter.
Indeed, Hutton was successful in his claim.

There are a few differences between implied and express terms. Express terms are
when terms are in written or orally. However, they need evidence which involves the
contractual terms from the actions conducted by the parties. Then it is decided by court when
there is a problem.30 This does not happen in implied terms. On the other hand, an implied
term is conducted. There was no agreement made but you have obligated to give something
in return. In short, when a party received benefit from other party then the other party will
have to get something in return. Implied term has to be reasonable and rightful. So, express
terms show more validation as it has valid terms and agreement.

All in all, implied and expressed terms have their own ways to operate. Expressed
terms are terms that have agreement with the agreement of both parties. Nevertheless,
implied terms are terms that are assumed to be agreed by parties but parties will still have
legally bound. As a result, there is a significant difference between implied and expressed
term as they have various ways in conducting the agreement between parties.

(2399 words)

29
(1836) 1 M & W 466.
30
S Davenport and D Parker, Business and Law In Australia (Thomson Reuters,2012)
Bibliography

Books

Christine Miles, A Guide to Business Law (Thomson Reuters, 20th ed, 2013)

David Parker and Gerald Box, Business Law for Business Students (Thomson Reuters, 3rd
ed, 2013)

Shayne Davenport, Business And Law In Australia (Thomson Reuters, 2012)

Stephen Graw, An Introduction To The Law of Contract (Thomson Reuters, 8th ed, 2015)

Website

Kellam, Jocelyn, Product Risk Year in Review 2010 (March 2011), Claytonutz.
<https://www.claytonutz.com/ArticleDocuments/178/Clayton-Utz-Product-Risk-Review-
2010.pdf.aspx?Embed=Y>

Journal Articles

Knower, Jane and Rickett, Charles,’Implied Terms In Australian Contract Law: A

Reappraisal After University Of Western Australia v Gray’ (2011) Monash University Law
Review 145

Cases
Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 37

BDM Grange Ltd v Parker (2005) BCL 741

British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd (1974) 2 WLR 856

Brogden v Metropolitan Railway Company (1887) 2 App Cas 666

Buckenara v Hawthorn Football Club Ltd (1988) VR 39

Causer v Browne (1952) VLR 1

Dunlop Pneumatic Tyre Company v Selfridge (1915) AC 847

Eastwood v Kenyon (1840) 113 ER 482

Felthouse v Bindley (1862) 142 ER 1037

Fisher v Bell (1961) 1 QB 394

Harvey v Facey (1893) AC 552

Hollier v Ramblier Motors (AMC) (1972) 1 All ER 399

Hutton v Warren (1836) 1 M & W 466

Hyde v Wrench (1840) 49 ER 132

Kovacevic v Holland Park Holdings Pty Ltd (2010) QDC 279

Parker v South Eastern Railway Co (1877) 2 CPD 416

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953) 1 QB
401

The Moorcock (1886-1890) All ER 530

Legislation

Australian Common Law

Competition and Consumer Act 2010 (Cth)