Contract Analysis: Sue and Tom's Car Purchase Dilemma
Length and/or format: _1500 Words excluding footnotes (footnotes are only
to be used for citations, not discussions) and bibliography. Please note,
word limits will be enforced, however a 10% leeway is allowed.
Purpose: To enable students to develop their legal reading, research and
writing skills while applying and improving their knowledge and
understanding of contract law and also to develop comparative law
analysis.
Topics Examinable: Pt I Formation of Contract, Pt II Terms
Learning Outcomes assessed: LO1-LO4
How to submit: Online submission using Canvas.
Return of assignment: In accordance with the Assessment Policy,
assignments will be returned within three weeks of submission or at least
five calendar days before the next related assessment task is due.
Question
Sue has decided to change her car and Tom, her husband helped her find a 2014 KIA Sportage on carsales.com, advertised at $14,250. They visited the dealership and discovered it was run by Sam, Tom’s Uncle. After exchanging greetings, Sam handed them over to one of the customer service experts who took them to the vehicle. They inspected and took it for a test drive. During the test drive, Tom noticed an offensive odour in the car and informed the customer service expert who assured him it was “the smell of a freshly sprayed car” and it would disappear in no time”.
With this assurance, Sue and Tom offered $12,000 for the car and provided Sue’s details to the dealership. After extensive negotiations between the parties, the dealership agreed to take $12,000, prepared the transfer and registration document in Sue’s name and handed the sales agreement to them. The sales agreement provided among other things that “the seller provides no guarantee beyond the consumer guarantees provided by statute”. After Tom glances through the agreement, he tells Sue it looks all good and Sue signs the agreement.While Sue initially liked the appearance of the car, she expressed concerns about the offensive odour. After driving the car for a few days, the smell was persistent and was causing Sue respiratory problems. Sue has refused to drive the car and has told Tom, he got her a bad car.
Tom is frustrated with the situation and has called his Uncle Sam. Sam says, “you know we are family; I will see what we can do about it”. When Sam enquires about the vehicle, he discovers the smell was due to spilled diesel fuel which they had unsuccessfully tried to remove. He informs Tom who is disappointed with the dealership and wants a refund, to which Sam responds, you know that will be difficult because we do not do refunds.
- Does Tom or Sue (or both) have a valid contract with the dealership?
- Considering statutory warranties in the ACL, as per Part II of this unit,
Can they get a refund?
Note: Please support your answers with relevant case and statutory
authorities. Do not discuss misrepresentation. Keep your
answers/discussions within the topics covered in parts 1 and 2 only.
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