Problem 1: Tommy is a successful property developer who regularly attends Jay's Dry-Cleaning Service to have his expensive suits dry-cleaned. The owner of the business, Bob Jay, has been advised to limit his liability by the use of an exclusion clause on the back of the clothing dockets which are handed to customers for the collection of clothing items.
On the last visit to Jays, Tommy was given a clothing docket after he had paid his money and agreed on the price, containing the following clauses:
(1) The proprietor of Jay's Dry Cleaning Services does not accept liability for any loss or damage caused to clothing items during the dry-cleaning process.
(2) The consumer guarantees under the Australian Consumer Law are expressly excluded in respect to any dry-cleaning services provided by Jay's.
On returning to collect the suit, Tommy is informed by Bob that one of his employees had stolen the suit and that Bob was excluded from liability under clauses (1) and (2) of the docket.
Required
(a) Advise Tommy as to the application of the exclusion clauses?
(b) How would a court interpret clause (1) and would the clause cover Jay's liability for items stolen by its employees?
(c) Would clause (2) be effective to exclude the application of the consumer guarantees under Competition and Consumer Act 2010?
Problem 2: Roderick is the owner of Snacks Pty Ltd a successful food catering business. In January 2012 Roderick entered into a contract with the Queensland Government on behalf of the company to supply food to State Trains for a period of three years. The contract price per meal was $3.85, inclusive of delivery.
Six months after entering into the contract an industrial dispute between the company and its employees resulted in the court awarding to the employees pay increases of $20 per week. During this time the Queensland Parliament passed the Clean Food Act 2014 requiring caterers to modernise food preparation areas to meet new food standards and regulations. However, under the Act, Snacks could apply for a 12 month exemption to enable it to upgrade its food facilities.
Roderick needs to increase the price of each meal for the remaining 5 months of the contract to recoup some of the upgrade costs. The contract with State Trains is watertight and no price increases are permitted during period of the contract. In discussions with representatives from State Trains, Roderick indicates that the company will not be able to supply the meals owing to changes in the State food laws. He informs the representatives that an increase in the price would allow the company to make alternative arrangements to continue the supply of the meals. The representatives indicate that State Trains will not fund a price increase owing to current restrictions in the organisation's budget.
Two days after the meeting, Roderick writes to the State Trains to say that the contract had been frustrated owing to changes under the Clean Food Act. A week after receiving the letter, the company's factory is destroyed by a fire caused by an electrical fault in one of the company's ovens.
Required:
(a) Advise State Trains as to the remedies it might have under the common law.
(b) Assume that State Trains is unable to find another caterer to supply meals, what advice would you provide to State Trains if it reluctantly accepted the additional cost?
Problem 3: Read the case of Peter Smythe v Vincent Thomas [2007] NSWSC 844 from the Supreme Court of NSW in 2007. You are required to do a summary of the case setting out under headings the following;
- The Parties and their legal representatives.
- The Facts of the case,
- What each party was arguing.
- What important statutes and precedents were relied upon?
- What did the Judge decide?
- What was his reasoning?
- What statutory legislation has been introduced in Australia to deal with the increasing number of internet transactions.