Principles of Business and Corporations Law Research Hypothetical ased Assessment

Hypothetical Question

Jack Sprat is a 43 year old resident of Brisbane. When Jack Spratt won $5,000 on the lottery, he decided it was time to go on a holiday to Los Angeles. Jack booked both his flights and accommodation as a package using the online booking service of AusFly Airlines. After reviewing flight options, Jack worked out that he would need to fly from Brisbane to Sydney, and then get a connecting flight from Sydney to Los Angeles. At the booking webpage, Jack noticed there were only 5 seats left on the cheapest flights, so he quickly selected his preferred dates, travel times and accommodation. Jack then progressed through the rest of the online booking process.

At payment area of the online booking process, and before payment could be made, Jack was required to click a button that stated he agreed to the airlines Conditions of Carriage. There was also a hyperlink which, when Jack clicked on it, opened a separate browser window containing lengthy document titled Conditions of Carriage. Jack started to read through this document, but noticed that a timer had started on his flight selection meaning that if Jack did not confirm his payment within 10 minutes, he would have to start the booking process again. Jack was concerned that he would miss out on the cheaper flights, and so he selected the button that indicated he agreed to the Conditions of Carriage, even though he had not finish reading the document. He then paid an amount of $7,000, being the total cost of the trip.

On his way to the airport for his Brisbane to Sydney flight, Jack was caught in a major traffic jam due to an accident on the Gateway Motorway. As a result, Jack arrived at the airport 5 minutes after the Check-in Deadline. However, the airport was relatively quiet and Jack managed to get to his flight with plenty of time to board.

In fact, Jack had enough time to do some airport shopping while waiting for the flight. Jack went to Smithys Fine Jewellers (Smithys) and found a silver watch that he liked. Jack then approached the counter to purchase the watch. Behind the counter was a large sign that stated:

Smithys will not be held responsible for any personal injury howsoever caused to any person in this store by actions of Smiths, its agents, contractors or employees.

Jack asked the salesperson (Alicia) whether the watch contained any nickel that is often found in silver jewellery and explained that this was important to him, as he was extremely allergic to nickel. Alicia responded by saying I guarantee that this watch is made of pure sterling silver and does not contain any nickel products. Jack purchased the watch and started wearing it immediately.

Jack then went to board his flight to Sydney. However, shortly after he settled in his seat, he was approached by one of the flight attendants, who explained that the flight was overbooked and Jack was required to vacate the plane. Jack refused to leave, as he was concerned he would miss his connecting flight to Los Angeles. However, an airport security guard then forced Jack to leave the plane.

After being kicked off the plane, Jack approached the AusFly Airlines service counter to see if he could reschedule his flights. He was informed that there would be an additional cost of $2,000 to reschedule. When Jack argued that this cost should be covered by the airline, he was directed to Clause 13 of the Conditions of Carriage, which stated:

If you are denied boarding due to overbooking of a scheduled flight for which you have a Booking, we will try to get you to your destination within a reasonable time of your original scheduled arrival time. If we do not, we will provide compensation and any care required by any law which may apply or in accordance with our policy if there is no applicable law. This clause 13 does not apply if you fail to meet the Check-in Deadline and boarding requirements in Clause 6 or we exercise our right to refuse to carry you.

Jack was advised that he was not entitled to costs as he had failed to meet the Check-in Deadline. Jack then requested a full refund and was advised that this was not possible on the flight that Jack had purchased.

Jack then realised that large, red welts had started to form on his arm around the area of the watch he had just purchased. Unfortunately, Jacks new watch did contain nickel. Jack had a severe allergic reaction to the watch, which resulted in a secondary infection that required major surgery.

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