Question one: CONSUMER LAW
a) Advise Tommy as to the application of the exclusion clauses?
The Australian Consumer law (ACL) started to apply on January 1, 2011. Previously the
national, state or territory consumer laws were applied and enforced by the relevant
national, territory and state consumer agency. Many consumers are usually confident that
businesses do the right thing, however lack of awareness of the rights and obligations
under the consumer laws has led to vulnerability of many consumers in society.
As in the case of Tommy, lack of knowledge of the rights and obligations of consumer as
provided in the Australian consumer law may lead to inability to solve disputes.
The schedule 2 of the Competition and Consumer Act 2010 provides that, the conditions
and warranties implied and the rights and remedies created by the Australian Law cannot
be excluded. Therefore, any attempt to exclude the conditions, warranties whether
statutory or otherwise is made void by the terms of the Act. This condition thus makes
the company liable to prosecution under the Act. This means that exclusion clauses are
not applicable.
b) How would a court interpret clause (1) and would the clause cover Jay’s liability for
items stolen by its employees?
Clause 1, states that the proprietor of Jay’s dry cleaning does not accept liability for any
loss or damage caused to clothing items during the dry cleaning process. The courts
interpretation will be as follows:

The section 60 of Australian Consumer Law provides that the contract for the supply of
services to consumers contain an implied warranty that the services will be rendered with
due care and skill. The warranty cannot be excluded.
That Bob Jay is thus liable to any damage caused on the clothing items by the employees
during the dry cleaning process. Similarly, any loss through theft or burglary is to be
charged against Bob Jay.
c) Would clause (2) be effective to exclude the application of the consumer guarantees
under Competition and Consumer Act 2010?
Clause 2, provides that the consumer guarantees under the Australian Consumer Law are
expressly excluded in respect to any dry cleaning services provided by Bob Jay.
The schedule 2 of the Competition and Consumer Act 2010 provides that, the conditions
and warranties implied and the rights and remedies created by the Australian Law cannot
be excluded. Therefore, any attempt to exclude the conditions, warranties whether
statutory or otherwise is made void by the terms of the Act. This condition thus makes
the company liable to prosecution under the Act. Based on this information, the clause (2)
may not be effective to exclude the application of the consumer guarantees.
QUESTION TWO:
a) Advise State Trains as to the remedies it might have under the common law.
The remedies of breach of contract under common law include damages and
liquidated claims. Before being awarded these remedies there should be certainity that
a financial loss resulted from the breach of contract. Similarly, the damages should be

foreseeable, in other words, at the time of making the contract the party who breached
the contract should have known the consequence of the breach. It should also be
noted that damages may not be awarded in the case that the plaintiff, through bad
faith or unreasonable action or inaction aggravated the damages then the defendant
will not be liable for the increase of the loss.
Damages for breach of contract are designed to put the plaintiff in the position they
would have been in the case that the contract was performed properly. They are thus
viewed as a substitute for performance. The loss should be associated with the breach and
the plaintiff should take necessary steps to reduce the extent of the damage.
Alternatively, State Trains have other remedies like liquidated damages. Liquidated
damages are used where there is a clause in the contract that provides the amount of
money payable in case of a breach of contract. The sum agreed upon should however not
constitute a penalty.
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?
Solution:
If State Trains is unable to find another contract and reluctantly agrees to the accepted
additional cost it means that there will be a bilateral contract modification. My advice to
State Trains is that, they should ensure that Snacks Pty Ltd meets the new food standrds

Analysis of Consumer Law, Breach of Contract, and Online Transactions: A Legal Perspective

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