Assignment:
Business and Company Law
Q1: Magda is a highly acclaimed professional photographer focussing on celebrities in the fashion, entertainment and sports industries.
Magda advertises and sells prints of her works via her website: madgaportraits, but she also sells directly to the public from her home studio.
The website sets out various categories of works including one entitled ‘Elite Sports' where she has thumbnail photos of limited edition, framed, photographic portraits that she has taken, showing prices (including postage and handling).
There is also a notice on the website indicating that these portraits are numbered and signed by Magda, and are printed on archive quality, acid-free paper.
Avinash visits her website and admires a photographic portrait of an Australian Olympic champion, Paris Stilton. The advertised sale price is $2,000 and it is described as ‘a limited edition of only 3 prints'. According to the website only one of these portraits remains unsold.
As described below, a number of exchanges take place between Magda and Avinash.
Sunday 19 February:
1) Using the supplied email address from the website, Avinash emails Magda saying, ‘l'll buy the Paris Stilton portrait for $1,600'.
2) Within minutes, Magda emails him back saying that she ‘cannot accept less than $1,800'.
3) An hour later, Avinash replies, indicating that $1,800 sounds like a fair price but asks her to ‘hold the portrait so he and his wife can discuss the matter'. Avinash points out that as his wife is overseas, the earliest his wife could do so would be the following Tuesday, 21 February.
4) Magda responds immediately by email agreeing to this and attaches the following scanned document:
I, Magda Kingsbury, hereby offer to sell Avinash Kapoor one framed print of Olympian champion, Paris Stilton, for $1,800 cash. This offer shall remain open until 11.59 pm on Tuesday 21 February.
Signed: Magda Kingsbury
Monday 20 February:
5) Avinash emails Magda at 9 am stating he had been able to consult with his wife earlier than expected and he was willing to pay $1,800 for the portrait on the condition that she provided a certificate of authenticity that verified the portrait's origin and status as a limited edition work.
6) Magda emails him back at 9.30 am saying that she could do so. She adds, "If you want to go ahead you must confirm with me by 4 pm today". Avinash hesitates and decides to think it over and does not reply that day believing he has until Tuesday 21 February to decide.
7) At 11 am, Elton, a sports enthusiast, who had visited Magda's website and seen the portrait of Paris Stilton, decides to pay a visit to her studio to see it on display. Without haggling over the price he purchases the painting for $2,000 cash and takes it away with him.
8) At 11.30 am, Magda emails Avinash informing him that the portrait had been sold.
The next day, Tuesday 21 February:
9) At 9.45 am, without having actually read Magda's most recent email ( in 8 above), Avinash telephones her informing her that he will buy the painting for $1,800. Magda informs him he has missed out.
REQUIRED
(a) Advise Magda and Avinash whether they had formed a binding contract with one another.
• You will need to address all the essential elements of a contract as well as analyse the legal status (if any) of each step or event that occurred, including information on the website. Refer to relevant case law and provide definitions of legal terms. In this part, do not discuss the impact, if any, of consumer protection laws.
• You may, but are not obliged to use the IRAC format for this part, given that each step or event needs to be analysed separately.
(b) Assume Elton discovered that the portrait he had purchased had only been printed on low quality photographic paper and was therefore susceptible to colour degradation (already occurring) which would not happen had high quality archive quality paper been used. Furthermore, he has discovered that recently, Magda had sold ten of the so-called limited edition prints of Paris Stilton to other buyers.
Advise Elton of his rights under the Australian Consumer Law (‘ACL').
• By reference to the ACL, explain whether
o Elton qualifies as a consumer
o Magda has breached any terms
o Magda has made any misstatements
• Refer to specific sections of the ACL and any relevant cases
• For your information, ‘limited edition' most commonly refers to the publication of an edition of a book, or reproduction of a print or object, limited to a specific number of copies.
• Use IRAC format.
Q2: ‘ In contrast to express terms found in a contract, implied terms can arise in a variety of ways and are beneficial to at least one of the parties to the contract. Some contracts may contain both express and implied terms, but the ways in which these two types of terms operate are significantly different from one another'.
Required
Discuss this statement by reference to cases and legislation, providing examples of each.
• In addition, include as an example in your discussion, references to the types of terms indicated in the facts of question 1.