Mike is a successful businessman who has run many businesses and over the years has made considerable profits. Mike has a keen interest in art, particularly paintings from the romantic era and has often toured Europe, enjoying the art galleries of France and Italy. His dream has always been to own a painting himself, but has never been able to justify the cost. He recently moved into a new office in an expensive part of the city and has decided that his office is just the right place to hang a painting, believing that it will add an air of sophistication to his office which will impress his potential clients.
After contacting Peter who claims to be one of Australia’s premier art dealers, Mike set his heart on a particular work of Art entitled ‘Venus at Play’ by renowned artist Angelo Michael that is listed on Peter’s website for sale at $2 Million. Mike has long been a fan of Angelo Michael’s work and was aware that such painting existed but always believed it was in a private collection in America and is surprised to see it for sale and available in Australia. He has also recently read about a growing problem of forgeries, particularly in respect of Angelo Michael pieces so although he would like to buy the painting, he is wary.
To quell his concerns, he arranges to meet Peter in person and discovers that, rather than being one of Australia’s premier art dealers, Peter has only just started his dealership business, still operates out of his parent’s basement and so far has only sold one painting. He admits to Mike that he while he does have big plans for his business, so far, he is struggling and spends most of his time working at a 7Eleven convenience store in order to fund his new venture. This does not concern Mike too much as he understands that all businesses must start somewhere and he respects what Peter is trying to do.
Peter pulls out a painting from behind a sofa in the basement, and presents it to Mike as the famous ‘Venus at Play’. He explains that Tom, an old school friend of Peter owned the painting and wanted to sell it. He had intended to sell it through one of the big established dealers in Sydney but agreed to use Peter as the dealer ‘as a favour to help my business get off the ground’.
Mike inspects the painting and while it does appear genuine, he still has some concerns. He decides to go away and think about it for a while. A week later an email arrives from Peter saying:
‘Mike, good to meet you last week. To follow up on our conversation, I hereby formally offer to sell you the painting for $2 Million. By the way, I know you were concerned as to the provenance of the painting. However, I can confirm that the painting is 100% genuine.
I have had it assessed by two independent art experts and I can attest to its veracity.’
Mike responded that night saying:
‘Peter, thanks for the email. I would like to buy the painting but am only prepared to buy it for $1.5 million. Please advise whether you will accept this lower price. If so I can transfer the funds to you and you can send me the painting.
Mike heard nothing back from Peter until a parcel arrived in the post. He opened the parcel and there was the painting and an invoice for $2 million. This was accompanied by a note from Peter stating ‘Mike, thanks for agreeing to buy the painting. Unfortunately I can’t do $1.5 million so the price remains $2 million. Look forward to receiving the money, nice doing business with you’.
Mike has since had the painting assessed by Australia’s leading expert in Angelo Michael paintings and he has confirmed the painting is a forgery and is practically worthless. The expert explains
to Mike that this is one of the many forged copies of Venus at Play he has seen, and the real painting is still held by a private collector in America.
Mike is now livid and wants to return the painting and refuses to pay the invoice arguing that no contract to purchase the painting existed In turn, Peter is now threatening to sue Mike for breach of contract for not paying the invoice.
PART A (9 MARKS)
Advise Mike whether you think a court would be likely to find that an enforceable contract between Mike and Peter has been formed.
In answering Part A you are required to identify the four basic requirements of contract formation and whether each of these requirements have been satisfied on the facts.
For the avoidance of doubt, even if your answer is that one or more elements are not satisfied, you must consider each of the other 4 elements.
In Part A do not consider any legislation.
By way of guidance, for each of the 4 elements of contract formation, you should provide at between 1 and 2 case authorities and you are not required to consider cases not covered in your lectures.
PART B (11 MARKS)
Mike has now called you back and thanked you for your advice in Part A. He asks you whether, if a court were to find that a contract did exist, would Peter be liable under s18 ACL?
Please address all relevant elements under this statute as set out and identify the problem facts that do/do not meet this standard and why/why not.
In answering Part B you are not required to discuss remedies or sanctions.
The following link has some useful resources in respect of the ACL and may be a good place to begin your research in respect of Part B: http://consumerlaw.gov.au/the-australian-consumer-law/legislation/
4. When researching Part B, remember that before 2010, the relevant legislation was contained in s52 Trade Practices Act and as a general rule, cases dealing with s52 TPA are applicable to s18 ACL. On that basis, cases dealing with s52 TPA can be cited in support of your arguments.
TIPS & GUIDANCE.
When giving legal advice:
You should always come to a conclusion one way or the other. Do not sit on the fence (but take careful note of the points below).
Legal advice is generally advising the ‘likelihood’ of a particular conclusion or decision by a court. Usually that means you will only be advising that one conclusion is more likely than another (e.g. ‘on balance, the more likely outcome will be…’ or ‘in conclusion the better view is…’ or similar language).
When analysing the most likely outcome – as opposed to the recommended course of action which may sometimes differ – you are not trying to win a debate or advocate for an outcome. You are simply explaining what the law is, the logic as to why this conclusion is most likely. Put alternately – you are identifying the strengths and weaknesses of the case/proposed argument. On that basis you need to note the arguments in favour and the arguments against (albeit come to a conclusion as to which is more likely).
Where possible, your sources and support for your answer should be primary sources only (e.g. Legislation & Case Law). Journals and guidance sheets are useful background but are not legally enforceable and therefore cannot be provided as primary support for a legal proposition. Text book quotes also fall into this category and are not primary sources of authority – although are a good starting point to read around the key points of law, principles, and cases.
Refer to the material around ‘getting started’ on this site. Similarly, an example of a prior problem, a sample answer and relevant material used in assessment are also set out and may be instructive.
FURTHER INSTRUCTIONS FOR ASSIGNMENT
This is an individual assignment weighted at 20%.
The word count is 1000 words – plus or minus 10%. Any text above that will not be
Please use 12 point Times New Roman font with 1.5 spacing.
Familiarise yourself with the Criteria Sheet for further information on what is required.
You will be marked in accordance with these criteria.
You must upload your answer via the link provided on the unit’s Blackboard site
under the “Assessment” link by the due date and time (this applies to Intensive,
Online and External students).
Your assignment and feedback will be returned to you online.
It is each student’s responsibility to check online submissions have been uploaded
correctly (i.e. you should open the file from Turnitin to check this, once your files
have been uploaded). Each student should check for a digital receipt from Turnitin
at their QUT email address as proof of submission. This email should be retained
until marks are received. No marks will be given for submissions where the file is
corrupt and unreadable.