Business Law- Hugh Runs - Bill And Jill - Assessmnt Answer

Business Law Assignment

Assignment Task1

Bill is 15 years old and his sister, Jill, is 22 years old. On July 1 this year Bill and Jill buy a Sydney cbd cafe, Fine Food Cafe. In the contract the seller, Dodgy Pty. Ltd., dishonestly states that the weekly takings are $10,000 and have been at this level for 5 years. The contract also states that the costs of the business are estimated at $3000 per week. In the contract there is a term stating that the seller will not run a cafe in the Sydney cbd for a period of 5 years from July After running the business for several months Bill and Jill find that takings are on average $2000 weekly and less than their costs.

Bill and Jill come to you for advice about the contract for the business and the remedies they may have against the seller

What are the key areas of business law that can assist Bill and Jill?

Assignment Task2

Hugh runs a pizza business, Homeslice Pizza. He has been using UberEats to pick up and deliver his pizzas around Sydney. Sales are very good and this food delivery service helps his business.

After a few months Hugh to cut expenses decides to stop using UberEats and arranges for his son, Theo, to use his car for deliveries. High and Theo do not register any documents but they advertise the service as UberPizzaDelivery.

To further cut costs Hugh decides to substitute old and out of date cheeses in his pizzas. In his advertising he states that his business, Homeslice, only uses the freshest ingredients with cheeses straight from the farm.

Many customers who buy the pizzas get very sick from the stale and out of date ingredients. One customer dies because of these ingredients.

What are the key areas of business law that are relevant in these facts?

Who can take legal action and what remedies could be given by a court?

Bill and Jill have fallen victim to misleading conduct by the seller if the café. In the contract they signed, they were given false information regarding the costs and profits that the café makes weekly. Provision of false information during trading is illegal, and there is a statutory prohibition in Australia to that effect. This statutory prohibition can provide them with an avenue of remedy in the situation that they are grappling with (Dorfman, 2012).

In Australia, Jill and Bill have the protection of the commercial law and subsequent trade acts that aim at protecting consumers as well as ensuring that all trade practices are fair. As such, they have an avenue for seeking legal redress based on the fact that they signed a contract that contained misleading information. They can also sue for damages due to the fact that they have suffered economic losses due to the information provided at the time they purchased the café (Sands, 2013).

Further to this, the provision of misleading information can nullify the contract that they signed with the Dodgy PLC. This is due to the fact that the information that is provided in the contract doesn’t represent the facts on the good. By providing this information, the seller acted in bad faith, and that could essentially nullify the contract (Poole, 2016).

In addition to nullifying the contract, Bill and Jill could also seek damages. In the trade act, any person who has suffered loss as a result of being provided with false information is entitled to compensation. In Bill and Jill’s case, they have suffered commercial loss due to the false information that the seller provided. If they factual information had been provided, they would probably have avoided buying the café. As such, they can sue for damages. The seller can also be faced with penalties according to the law due to the fact that they are in breach of Section 18 of the trade law (Sands, 2013).

Section 18 will be very essential in arguing Bill and Jill’s case. It seeks to protect consumers and business people from trade practices that are unfair. As such it protects against the provision of misleading information that results into loss or damages to the buyer. Bill and Jill are victims of this, and if they can prove that the information provided led them to make decisions that they wouldn’t have made if the correct information had been provided, they have a good chance of declaring the contract as void (Ayres & Schwartz 2014).

Further to this, the contract that Bill and Jill entered into can be declared void. A contract could be deemed as void if one party did not provide truthful information and the other party singed it without having all the relevant information. In Bill and Jill’s case, they signed the contract believing that the costs were 3000 and revenues were 10,000 on a weekly basis. If they had received the accurate costs and revenues information, they would have made informed decisions before agreeing to purchase the café (Dorfman, 2012).

Solution2:

Provision of misleading information is a key are of business law in this case. In their advertisements, Homeslice claims that the ingredients that they are suing in preparing their pizzas are fresh ingredients and that their cheese is fresh off the farm. By making this claim, they are providing false information due to the fact that they use stale ingredients and cheese that is out of date. This information is attracting customers who end up falling sick (Lee & Johnson, 2013).

In their information, Homeslice offers quality guarantees to the customers. Their guarantees state that all their ingredients are fresh. By offering this guarantee, they attract customers who probably only purchase the pizza due to the freshness guarantee. Once they make the purchase, they suffer health issues because the guarantees offered are false (Lee & Johnson, 2013).

Contributory negligence is also a core issue brought up in this case. In Australia, if a company provides misleading information to a customer and a customer suffers due to this information, the seller can be deemed guilty of contributory negligence. In the current case, the information that Homeslice provides regarding the freshness of their ingredients has led consumers to purchase the pizza, and the consumers have experienced physical illnesses and even death as a result. In this case, Homeslice is guilty of negligence because if they had offered the correct information, the consumers would have made reasoned decisions regarding whether or not they want to purchase the pizza (Corones, 2014).

The issue of unfair business practices is also evident in this case. Homeslice pizza has been using UberEats for their pizza delivery services for a long time. He then decides to stop using them as a way of cutting costs and breaks the contract that he has with them and starts using his son’s van as a delivery service. Further to this, he names his delivery service as UberPizzaDelivery which is copyright infringement on the UberEat’s business name. By using this name, they have engaged in unfair business practices because they have taken up UberEats name (Abdullah & Rahman, 2015).

They are also advertising business that they have not registered yet which is a legal issue. In such a case, they are engaging in deceptive advertising because they are taking advantage of the UberEats name to launch their delivery service. They are also deceiving the public that they have a registered company by performing the advertising. In actuality, they have not even filed any documentation showing interest in registering the service as a business (Gifford & Robinette, 2014).

The issue of consumer rights is also evident in this case. In Australia, consumer rights have been protected by the law and thus consumers are entitled to receiving products that have met all the quality and safety standards that have been guaranteed by the safety board. In Homeslices scenario, they have contravened the consumer protection act because they are selling products that contravene the safety act to the customers. Due to this, they expose the customers to health risks especially because they deal with consumer goods (Abdullah & Rahman, 2015).

Who Can Take Legal Action and What Remedies could be given by a Court?

Customers can take Homeslice to court and sue them for providing them with misleading information. This is due to the fact that Homeslice advertised their pizzas on the basis of freshness while they knew that they weren’t using fresh ingredients in their pizza preparation. As such, they are guilty of misleading conduct (Gifford & Robinette, 2014).

Consumers can also sue Homeslice on the basis of contributory negligence. Contributory negligence implies that Homeslice through their actions has contributed to losses incurred by the customers by providing information that wad not factual. In this case, Homeslice made quality guarantees to the customers. Armed with these guarantees, consumers made pizza purchases which led to the loss of life and other health complications. If they had been armed with factual data, they would have avoided purchasing pizza that was made from stale ingredients (Butler et al., 2013).

The courts can award the consumers compensation in terms of money. If they can establish the extent to which the pizza has caused health damage to the customer, they can get the monetary compensation that caters for the damage caused. Further to this, the customer who lost their life due to consuming the pizza can be compensated if it was established that the pizza directly caused the customer to lose their life (Hillman, 2012).

UberEats can also take legal action against Homeslice based on non-performance. They ended their contract due to cost cutting g measures which are not a valid reason for them to nullify their contract. Due to this, uberEats can claim for damages that occurred due to the loss of income from the cancellation of contract (Hillman, 2012).

If UberEats can prove non-performance and if the courts found that Homeslice is at fault, the court can order the reinstatement of the contract on the same terms. They can also order Homeslice to compensate UberEats of the income that they have lost from the end of the contract. Further to this, UberEats can sue for copyright infringement and unfair competition. They can be served with a notice of infringement, and an injunction can be served to them to stop them from using Uber’s name in their service (Butler et al., 2013).

By creating a service that bears a striking resemblance to UberEats, Homeslice can be sued by UberEats for infringing on their copyright. If this is proven, the courts can order Homeslice to stop using the Uber name for its delivery service. In the unfair competition issue, the courts can order Homeslice to stop marketing their service similarly to UberEats because it contravenes the trade practices act in the statutory obligations (McAdams et al., 2015).

By making their pizza using ingredients that are stale, Homeslices is in contravention of both the consumer protection act and the food safety act. As such, the court can impose fines on them for failing to adhere to the laws that govern both the consumer rights and food safety. Furthermore, they are advertising business that has not been registered. This could also have legal implications because it is in contravention to the laws governing business operations (North & Flitcroft, 2016).