Case Study

Instructions

Read the factual accounts and answer ALL of the questions with reference to the principles law covered in:

Topic: Employing Staff

Topic: Dealing with Customers and Competitors - Parts 1 & 2

This is not an essay, therefore, you do not need to have an introduction and conclusion. You are required to answer the questions in a series of sentences and paragraphs using the numerical value for each question as a guide to how much you need to write.

Question 1

Mike is completing a business degree at the university. He has a part time job doing deliveries for Pasta to Go, a fast food outlet. For this he provides his own vehicle, however, is required to wear a shirt with Pasta to Go's logo on it, in addition to carrying an identification card bearing the same. Mike can choose when to work and is paid by the hour. On one particularly busy night, Mike left the engine of his car running while making a delivery to a customer's home. However, he forgot to engage the hand brake of his car which then rolled down the customer's driveway finally smashing into their garden wall. The customer is now claiming compensation from Pasta to Go for the damage caused to their wall, however, Pasta to Go is denying responsibility claiming that it is Mike they should be seeking compensation from.

With reference to the principles distinguishing employees from independent contractors, explain whether or not Pasta to Go is correct in denying responsibility for the damage caused by Mike's car to their customer's wall.

Question 2

Max and Alex are the proprietors of a suburban pet shop called ‘Feathered Friends' which specialises in bird supplies. The business has been in operation for two years now and since it is making a reasonable income they can now afford to employ a part time assistant, Tom, whose usual jobs include, cleaning the premises and stocking the shelves. Tom is instructed to direct all customer inquiries to Max or Alex, since most of them concern the particular dietary requirements of birds for which Tom does not have sufficient knowledge.

One day while Tom was working alone in the shop, a representative from Super Seeds, a local grain supplier, came in and asked Tom if he would like to place an order for some parrot mix that was on special. Normally priced at $31.50 per 20 Kg bag, it was now only $25 per bag; however, the offer closed at 5 pm that day. Tom believed that this offer was too good to refuse, so assuming that Max and Alex would agree, he placed an order for 10 bags for which Feathered Friends was invoiced $250.

When Max and Alex found out what Tom had done they were furious and immediately contacted Super Seeds to come and collect the bags of parrot mix, explaining that Tom had no authority to buy stock on their behalf and further informing them that they would not be paying the invoice.

Super Seeds is refusing to take the parrot mix back claiming that as far as they are concerned it was a perfectly legitimate transaction and that any dispute is entirely between Feathered Friends and Tom.

(1) With reference to the law of agency explain whether Super Seeds is correct in refusing to take the bags of parrot mix back and insisting that their invoice be paid.

(2) Assume that Max and Alex now realise that the parrot mix was a ‘really good deal' and are prepared to forgive Tom for exceeding his authority, explain how Tom's actions can now be validated.

Question 3

On its website Feathered Friends advertises a special blend of parrot food as follows:

‘Super Parrot Food'

Our own unique blend of parrot food containing the best quality ingredients lovingly prepared by us.

Tim, the proprietor of ‘Pets on Parade', a competing pet shop, knows that Max and Alex buy the parrot mix in bulk from ‘Farmer's Choice', an interstate pet food supplier, to which they then add their own food colouring, package it on site, then market the product as: ‘Feathered Friends' - Super Parrot Food'.

Tim accuses Max and Alex of misleading consumers into believing that the parrot food is entirely their own recipe, whereas in fact it is prepared by Farmer's Choice.

Max and Alex respond to Tim's accusation by reminding him that the food colouring which they add gives ‘Super Parrot Food' its uniqueness.

(a) Explain whether Tim has any legal right to bring an action against Feathered Friends under the Australian Consumer Law (ACL).

(b) In which court would the action be taken?

(c) Applying the test from Taco Company of Australia Inc. v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177 discuss whether Feathered Friends has engaged in conduct that is in breach of section 18 of the ACL.

(d) If the court decides that Feathered Friends has breached section 18 of the ACL discuss what remedy (or remedies) would the ordered by the court.