Commercial Law Case

1. Advise whether Adam has any remedies in contract law under the Sale of Goods Act.

Issue: Whether the ‘slim quick’ pills Adam bought is a term of the contract. If it is a term, what are the clarification and the options available to Adam if the term is breached?

Rule: A term can be expressed or implied. A term is expressed if it was conveyed orally. Statement made before a contract is form may be representative or puff. A representation is a statement of fact. A term can be released on condition warranty or innominate term. A condition is a fundamental term which allows the other party to terminate and claim for damages if it is breached. Contract of sale refers to the legal contract of exchange of goods and is made from the conduct of the parties.

Application: There is a contract of sale of goods and the price is fixed when Adam paid $500 for the ‘slim quick’ pills from A1 pharmacy. The goods focuses here is the ‘slim quick’ pills which is an existing products, owned and sold by A1 pharmacy. However, A1 Pharmacy’s goods contain an exclusion clause, in small print. In the case of a contract of sale, Adam has the right to reject goods by reason of a breach on the part of the seller.

Conclude: A condition was breached and Adam can either terminate the contract. Damages are payable.

1. Advise whether Samantha would be able to sue Adam for breach of contract?

Issue: Whether there is a contract between Samantha and Adam and whether Samantha can sue Adam.

Rule: A contract is a legally binding or valid agreement between two parties. In order for a contract to be valid, it has to contain these four elements: (1) legal capacities of the parties to act, (2) offer and acceptance, (3) consideration to be paid for the promise made, (4) an intention between both parties to create the binding relation.

Rule: A breach of contract means failing to perform any term of contract without legitimate legal cause. The contract may be either written or oral. It is the most common causes of law suit for damages. This may include failure to deliver all the goods, substituting inferior or significantly different goods etc. A party to the contract may commit a breach of contract by: Anticipatory vs. Actual.

Application: Samantha has been consistently telling Adam about her overweight concerns. For the intention about being concern for his friend, Adam bought one of the ‘slim quick’ pills for Samantha. With Samantha being pleased, she then bought the pills from Adam. In this case, an agreement is form as there is an offer and acceptance between both Adam and Samantha. Before any contract comes into existence, there must be someone who is making the offer which is known as “offeror” and another who is willing to accept the offer also known for “offeree”. For this scenario, Adam is the “offeror” and Samantha is the “offeree”. Consideration is also made between both Adam and Samantha. In The Law of Contract, it states that in order for consideration to happen, both parties must each receive a benefit and suffer a detriment. Adam bought the ‘slim quick’ pills for $500 per bottle from the A1 Pharmacy. Samantha buys the pills from Adam, loses her money (price of the pills), while Adam gains the money. However, Samantha obtains the pills, and Adam loses a bottle of it. Both have received a benefit as well as suffered a loss. As for the last element of a contract, when Samantha bought the pills from Adam, it is to say that this intention consists of readiness of Samantha to accept the legal sequences of having entered into an agreement. However, it is also important to know that not all agreement leads to a binding contract which can be enforced through the courts. This scenario that Adam and Samantha faced brings us to the Social and Domestic Agreements context. Social and Domestic agreements are actually agreements that are made among both friends and family. In Balfour v Balfour (1919), the agreement was purely based on social and domestic agreement which means between family members. Let’s assume that Samantha and Adam are friends because Samantha always confide in Adam about her overweight issues. Therefore, it was presumed that both parties did not intend to be legally bound.