BUSN2400-Case Study of Mario - Business Law Assignment Help

Assignment Task

Task

Question 1:

Mario, a developer, borrowed $2,000,000 from Greedy Finance Pty Ltd for a development project. The terms of the agreement required the full $2,000,000 to be paid within 60 days at 12% interest. At the end of the 60 days, Mario told Greedy Finance Pty Ltd that he would be unable to pay the full amount as the development had not sold as well as had been expected.He offered to pay $1,200,000 immediately in full settlement of the debt. Greedy Finance Pty Ltd accepted this payment. Sometime later, Greedy Finance Pty Ltd claimed the balance of $800,000 plus the interest. Mario argued that he should not have to pay more as Greedy Finance Pty Ltd had agreed to accept the $1,200,000 as a full settlement. Advise both Mario and Greedy Finance Pty Ltd:

(a) Of their legal rights, if any, that they may have in this dispute.

(b) Who is likely to win the dispute if the matter went to trial and why?

Question 2:

Costas operated a restaurant and wanted to change its image by buying some new furniture for the restaurant. He decided on some table and chairs which he purchased for a total of $45,000 from Liberty Furniture in Parramatta. Costas was handed a written sales contract which he was required to sign. However, before he signed the written contract, he asked the sales representative from Liberty Furniture, “I am only going to sign this contract if I have a guarantee that these tables and chairs are of good quality”. The sales representative then stated, “We stand behind every item of furniture, we sell and offer full refunds where customers are not fully satisfied. We have been in business for 50 years without any complaints”. Costas then said “That is exactly what I wanted to hear and so now I will sign this contract”. Immediately after this discussion, Costas and the sales representative of Liberty Furniture then proceeded to sign the sales contract. Included in this written sales contract were details about the items purchased (100 chairs and 50 matching tables said to be of commercial grade and long-lasting), the price paid, the delivery date and place.

There was also, hidden away in fine print at the bottom of the document, a clause, clause 5, which stated:

“Liberty Furniture accepts no responsibility for the furniture items supplied as these have been supplied by third parties to Liberty Furniture. Accordingly, Liberty Furniture provides no warranty, refund, or any other remedy if a customer is unhappy with any furniture item or items for any reason.”

Costas had never purchased any item from Liberty Furniture previously and no one at Liberty Furniture at any time pointed out to him what was contained in clause 5 of the written sales contract. The terms of clause 5 are unlike any terms used by any other furniture retailer in Australia.

The new furniture looked impressive but unfortunately for Costas the quality turned out to not be satisfactory. After only 2-3 weeks from purchase, Costas was made aware by some of his unhappy customers that some chairs started breaking and even some table legs from some tables had started coming off. What made things even worse was that the slightest of scratches against the items of furniture would leave noticeable and lasting marks. It seems this was because the type of timber used in the manufacture of the furniture items made them unsuitable for commercial use.

Costas is furious and has contacted the manager of Liberty Furniture and demanded that either the damaged items are replaced, at no cost to Costas, or that he should be able to return all the furniture and obtain a full refund. The manager of Liberty Furniture is refusing to take either of those actions and points to clause 5 of the sales contract denying any liability.

Less than 4 weeks after the purchase, on checking all the furniture carefully, Costas has determined that 48 of the 100 chairs purchased are either already badly scratched or broken. Of the 50 tables purchased; Costas has found that all 50 of the tables have already been badly scratched so much so that their appearance is unsightly and that 24 of these tables have lost either 1 or 2 of their four legs. Costas has also discovered that Liberty Furniture has had many hundreds of complaints over the years and is well known to consumer protection agencies in NSW.

He has also discovered in another clause written in fine print within the contract document that Liberty Furniture only offer full refunds when a customer agrees to pay an additional fee of 50% of the purchase price.

a) Advise Costas, referring to (separately) BOTH the common law contract law provisions AND the consumer law statutory guarantees as to what, if any, legal rights
Costas has against Liberty Furniture. 

b) What remedies, if any, can Costas seek from Liberty Furniture should he succeed in his legal action against them?

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