LAW OF CONTRACT FOR CANON FINANCE

QUESTION

Assignment Objectives

Part A seeks to develop your ability to read, understand and answer questions on a case.  In
doing this you should develop an appreciation of the formal court hierarchal structure and the
importance and workings of the doctrine of precedent.
Part B is designed to develop your ability to answer a legal problem.
In answering all questions you are seeking to communicate effectively in this discipline using
appropriate style and terminology.
Assignment Details

Answer Part A and Part B

Part A    –  25 Marks

Answer the following questions on the case of:
Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42
(16 February 2006)
This case is available in Course Assessment on the Moodle web site.

1. In what court was the case heard?                                                                                            1 mark
2. Name the judge and explain her title.                                                                                      1 mark
3. Explain what is meant by the term ‘medium neutral’ citation. Which case citation should be used if a
case is subsequently reported in the law reports?                                                             2 marks
4. The crux of this case concerns the meaning of a unilateral contract, define a unilateral contract.
1 mark
5. Which case established the definition of a unilateral contract, what was held in that case? 3 marks
6. Which Australian case defined a unilateral contract?                                                         1 mark
7. Which of the parties did Dodds-Stretton J regard as the more reliable witness and what was the
significance of this?                                                                                                               2 marks
8. What was the decision of the court?                                                                               1 mark
9. Briefly state the plaintiff’s claim.                                                                                   2 marks

10. Why did the plaintiff’s argument fail?                                                                            2 marks
11.The plaintiff appealed the decision.
 give the case citation for the appeal;                                                                                     1 mark
  state the outcome of the appeal;                                                                                           1 mark
   what reservations did Kellam JA have in respect of the presentation of the plaintiff’s case?
3 marks

12. Do you think this case was dealt with fairly? Give reasons for your answer.                 4 marks

______________________________________________________________________________

Part B  –  15 Marks

Question 1
Raymond offered to sell his computer to William for $ 1000, stating he would keep the offer open
for 3 days. The next day Raymond phoned William and said he was withdrawing the offer
because he had received an offer of $1200 from Greg. William however said he would accept the
offer now Raymond did not have to keep it open for the full 3 days.
Who has R reached an agreement with?                                                                        5 marks

Question 2
Ian and Jenny have discussed Jenny buying Ian’s car. Ian sends Jenny an e-mail which says:
I am prepared to sell you my car for $20,000. Unless I hear back from you, and as you never
answer e-mails, I’ll assume we have a deal and I’ll deliver the car to your place on Saturday
morning at 10am.
Jenny, as Ian expected, did not answer the e-mail message. What would be the legal implications
if:
a) Ian delivers the car but Jenny refuses to pay or to accept delivery;               5 marks
b) Jenny waits for delivery but Ian fails to arrive and refuses to sell.                 5 marks

SOLUTION

PART – A

Mildura Office Equipment & Supplies Pvt Ltd v Canon Finance Australia Ltd [2006] VSC 42 (16 February 2006)

1. The case was heard in Supreme Court of Victoria, Melbourne.
2. The name of the judge is Dodds-Streeton. Her title is Honorable Judge who controls the courtroom and ensures the relevancy of the evidence and witness for giving the judgment based on the findings of the case. The sentence once given by the judge is final thus they need to check the relevancy of the evidences provided before them.
3. Medium Neutral citation means referencing of unreported judgments / decided cases with uniform code irrespective of their medium. These citations are published in electronic and print formats. This was introduced in courts in 1990’s so that proper referencing was done to the given judgment irrespective of the status of the judge. If any representative citation is found in the database in electronic format, it is not necessary to use that database, usage of Medium Neutral citation is sufficient.

The citation used for a subsequently reported case includes the name of the parties in italic format + year of publication + abbreviation of the court + unique court identifier number + judgment number and the word unreported with the name(s) of the judge(s) along with the judgment date.

To pinpoint the reference square brackets can be used as given in the below example:

Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42 (16 February 2006).

Ibid is also one of the forms of citation used for subsequently reported cases.

1. Unilateral Contract means a contract where a promise is made by one party in return for completion of act by other party. Under this contract only one party is legal obliged for task completion. For example, an offer in form of a reward for return lost objects becomes a contract once the object is returned to its owner, then the owner is bound to pay the reward thus becomes a unilateral contract. It is a kind of a bargaining by the offeror for a completed task.
2. The class of unilateral contract is established in Carlill v Carbolic Smoke Company Limited. The case deals with advertisement given by the Carbolic company in using the carbolic smoke medicines as per the prescriptions printed on the bottle to avoid influenza, in brief the advertisement stated that usage of these medicines for continuous two weeks would prevent the user from getting infected to cold or any other such disease and plaintiff did use it but still got infected with influenza, thus claimed compensation as given by the company in the advertisement, the judge observed the presence of two considerations in this case, firstly the use of the tablet at the inconvenience of the customer and secondly the money gain for the company when the tablet is used by the customers. With many wagering points and lack of proper consideration the judge dismissed the appeal.
3. The Australian case defining unilateral contract is Carlill v Carbolic Smoke Company Limited [1], which states the class of unilateral contract. It is a landmark case stating the principles of unilateral contract.
4. Dodds-Stretton J felt the witness & evidence provided by Mr. Blancato as considerably coherent, detailed and reliable, because in his statement Mr. Blancato testified that the address was very general and he conceded that the opportunity to purchase the machinery for $1 was available only to the BISG dealers and not the machinery which were directly sold by Canon, some models were excluded from the offer such as the high end black and white and color photocopiers, he also stated that this condition was applicable only on the completion of the rental agreement or when the customer is does not have the requirement of the machinery, whichever is later. On the controversial view judge felt the witness & evidence of Mr. Janssen as inconsistent, shifty and unreliable.
5. The court felt that there was no evidence that the plaintiff currently retains any machines to which the defendant is entitled and also that the plaintiff had failed to establish the existence of unilateral contract constituted by the defendant’s offer. Although, the defendant claims that presence of more CFA machines with plaintiff there are no fully known facts. The judge felt that there is no basis for injunctive or declaratory relief. As the plaintiff failed to establish unilateral contract with the defendant and accepted its customer entry in to the rental agreement with CFA the Judge dismissed the claim of the plaintiff.
6. The plaintiff claimed that they accepted the offer by getting the first customer to enter into the rental agreement contract with CFA, thus they were entitled to purchase all the Canon copiers in the dealer area for $1. As a subsidiary argument the plaintiff contended that they were entitled to purchase all those machinery for which they had procured customers in the dealership area after the completion of the rental agreement. The plaintiff also contended that they could purchase the machinery for $ 1 as the original offer included an implied term that even if the rental agreement expired prior to the expiry date of the machinery. After the termination of the dealership the defendant refused to sell the equipment to the plaintiff. Mr. Bigmore, senior counsel for the plaintiff contended that CFA’s announcement at the New Zealand conference was mainly to obtain referrals of profitable finance and as the plaintiff had altered its business practice for funding the rental agreement of CFA, they should be entitled to the fruits of their labor. The plaintiff thus claimed that there was breach of contract by the CFA.
7. Plaintiff’s arguments failed on the grounds that they failed in establishing a proper unilateral contract as under the class of Carlill v Carbolic. The plaintiff did not present it claims on the basis of either category of cases as discussed in Vroon BV vs. Foster’s Brewing Group Ltd, but for completeness. The judge expressed that neither class are applicable here. The judge viewed that there was lack of proper evidence in supporting the plaintiff’s allegations that an offer for a certain promise was made at the conference under the legal terminology. Also, it was not impossible to ascertain what was said or what correspondence passed between the parties in the trial. Further, the conduct and communications after the conference does not establish that they were acting as per the norms existed in the contract. Thus, all the above reasons resulted in the failure of the plaintiff’s claim.
8.  (a) The case citation for appeal: Mildura Office Equipment & Supplies Pty Ltd v Canon Finance Australia Ltd [2006] VSC 42 (16 February 2006).

(b) The appeal was dismissed as the witness of Mr. Jansenn’s was inconsistent, shifting and sketchy and there was lack of proper details, whereas the witness of Mr. Blancto was coherent, reliable and certain. Also, there was lack of required consideration to confirm the scheme as an offer.

(c) Kellam JA was one of the trial judges who observed that the presentation by the plaintiff as a comical skit and felt that the presentation was not sufficiently certain as there was lack of details about the identification of the machinery and its usage in scheme. She felt that there was no proper clarity in details relating to the date of the conference, number of customers to enter into the rental agreement, and all the dealings in the course of acceptance and termination of agreement. The power point display, details were not produced or discovered at the trial. Her honor held that there was no distinct promise or offer for the act of the promise necessary for establishing a contract. In her opinion the plaintiff had failed to establish a unilateral contract of Carlill v Carbolic class. Her honor concluded that the presentation of claim by the plaintiff lacked the required certainty and that there was no distinct promise in the language which was perfectly unmistakable. It was true as per the evidences before her that the offer made was uncertain and however, she was less convinced that the words used by Mr. Blancato cannot be regarded as promise offered for consideration of completion of the act. Her honor’s finding was that the evidence of the plaintiff had no weight in the construction of legal nature of the parties to the contract dealings as stated by Heydon JA in Barambels Holdings [2].

1. Yes the case was dealt fairly for the below reasons.

• Plaintiff’s evidence was inconsistent and unreliable.
• There was absence of the existence of unilateral contract by the plaintiff
• As the plaintiff put its case solely to the contract it had to face many hurdles in its claim.
• There was no information relating to the machinery or any equipment retained with the plaintiff.
• The presentation of Mr. Blancato was general rather than detailed nature.
• The counsel for the defendant was of the view that Mr. Jansenn’s was an unreliable witness.
• The counsel contended that the statements made at the conference too vague and uncertain to amount for a contract in contrast with Carlill v Carbolic class.
• Mr. Jansenn’s amending his witness statement with counter claim.
• His oral evidence did not support the plaintiff’s central allegation of offer.

PART – B

(1)  Raymond had reached an agreement with Greg for $1200 in selling his computer. As per the facts of the case, he made an offer to William for $1000 and kept it open for 3 days, but before he received acceptance from Williams he had offer from Greg for $1200. Later, William made an offer of acceptance to Raymond, but as he did not receive any acceptance for his offer from William within 3 days he had all the rights to withdraw the offer. As per the legal definition of contract the offeror can withdraw his offer if he does not receive any acceptance from the offeree with in the specified time, thus as he did not give his acceptance within the specified time William cannot accept the offer as it was already withdrawn by Raymond who has all the rights to withdraw if before receiving the acceptance. Therefore, Raymond reached in agreement with Greg.

(2)

(A) As per the given facts, Ian assumes it as acceptance from Jenny even if she did not answer his E-mail. Thus, this contract was made on assumption and there was no acceptance from Jenny either orally or in written format. As per the definition of contract acceptance from the other party either orally or written format is very essential for a valid contract. Firstly, it depends on the discussion between the parties on what they have agreed upon. If they have agreed that no reply from Jenny as her acceptance then Jenny has to accept the car and make its payment. In this process Ian can even sue Jenny for compensation and court can approve it.

(B) If as per the discussions Jenny accepts to buy the car then Ian has to sell his car to Jenny as it is an oral contract. If Ian fails or refuses to deliver the car then under legal implications he is bound to pay damages or sell his car. Because it was an oral contract the communication through e-mail is of not much importance, even in the absence of the e-mail Ian would have to sell his car to Jenny. Under legal implications the court would order Ian to sell his car for $20,000. This conclusion is made if the parties agree to the contract either oral or written, mere assumption of Ian would not bind Jenny in accepting the contract.

If there was no discussion between the parties with regards to the form of acceptance then even if Jenny waits for the delivery of the car Ian has complete rights to not sell his car and in same way Jenny is not bound to buy the car as she has not send in her acceptance for offer made by Ian.

REFERENCE:

v [1] [1893] 1 QB 256.

v [2] Barmbles Holdings at p.164

v Barron, M.L., & Williamson, C. (2009). Fundamentals of Business Law (6th ed.). Australia: McGraw-Hill Australia.

v Terry, Andrew, & Giugni, Des, (1949). Business & The Law (4th ed.). Thomson

JI89

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