BSB111 Study Guide - Final Guide: Contributory Negligence, Dry Cleaning, Rebuttable Presumption
WEEK 13 – REVISION – IN-CLASS
Note that these cases do not cover all topics that will be examined. These questions
are aimed at reinforcing some of the principles learned during the semester; the final
exam questions will not take the same format (see the practice exam for an example
of the types of questions that will be in the final exam).
CASE 1
Brendan’s Bikez is a shop run by Brendan that sells bicycles. Peter wants to buy a
bicycle for mountain biking. He visits Brendan’s Bikez, and buys a mountain bike that
costs $10,000, the most expensive mountain bike sold in Brendan’s shop. When
finalising their transaction, the shop assistant gives Peter a sheet of paper and tells
him to read it and then sign it, which Peter does. On the sheet it says (actual size):
‘IMPORTANT – TERMS OF SALE
Brendan’s Bikez Pty Ltd is not liable for any loss or damage howsoever caused,
through the use of a bicycle or bicycle accessory purchased. This includes, but
is not limited to, defects in the gears, brakes, pedals or frame’.
The first time Peter uses the bike, a crack in the carbon fibre of the frame causes the
bike to break and Peter to fall off. He breaks his arm. He returns to the store seeking
a refund, but is told that the exclusion clause prevents the store being liable.
Ken goes to Brendan’s Bikez Pty Ltd wanting to buy a bicycle helmet. He sees a helmet
on display for $15. He thinks this is a good price for a helmet and takes the helmet to
the cashier. At the cashier, the cashier tells Ken that the helmet is actually $25, not
$15. Ken is furious. He thinks that if the helmet is displayed at $15, the shop is obliged
to sell the helmet for $15.
(a) Is Peter a consumer for the purposes of relying on the Australian Consumer
Law consumer guarantees?
Section 3 ACL – is Peter a consumer? – (1)(a) $40,000 – the bike cost $10,000
(assuming no re-sale) therefore Peter is a consumer. [domestic use? – household,
personal etc. Is it a fixture? – can it be moved or stolen easily? Re-sale? Coathangers?
Plastic Cutlery?]
(b) Assuming Peter is a consumer, advise Peter if Brendan’s Bikez Pty Ltd has
breached a consumer guarantee under the Australian Consumer Law. If there is
more than one consumer guarantee applicable, you only need to state one.
Section 54: guarantee that goods are of acceptable quality
The bike is not of acceptable quality as it has shown a major defect in its frame on the
first ride = it is a mountain bike so you would expect (its only purpose) is for mountain
biking.
There has been a breach of s54 and Brendan’s Bikez would be liable.
Also note that we could argue harm to Peter, possibly other property damage (phone).
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(c) Applying the Australian Consumer Law, can Brendan’s Bikez Pty Ltd rely on
the exclusion clause to prevent Peter from taking action?
S64: suppliers cannot limit, exclude or restrict consumer guarantees
The term here appears to be an attempt to exclude a statutory consumer guarantee –
this is not allowed – the bike must be of acceptable quality.
Brendan’s Bikez cannot rely on the disclaimer to prevent Peter from taking action.
(d) Advise Peter if he can bring an action against the bicycle manufacturer
Cervelo Ltd to recover for his injuries using the Australian Consumer Law
NB: any damages for personal harm or property (walls, carpets etc)
S9 and S138: Goods have a safety defect if their safety is not such as persons
generally are entitled to expect + manufacturers may be liable to individuals harmed
because of a safety defect.
Peter could sue Cervelo for any costs of his injury as the bike had a defect not expected
(S9) – its level of safety was not what a reasonable person would expect, and due to
the crack in the carbon fibre of the frame it caused Peters injury.
Therefore, in the circumstances Peter could bring an action for damages against the
manufacturer (+pain and suffering, loss of income, medical bills, transport costs, carer,
‘meals on wheels’).
(e) Advise Ken if he is correct. Do not discuss the Australian Consumer Law or
any other industry regulation. Therefore, asking us to discuss case law.
Pharmaceutical Society: displaying goods on shelves (window etc) reflect a willingness
to negotiate - an ‘invitation to treat’ – and not an offer.
Display of the helmet is only an invitation to treat – Ken makes an offer to buy the
helmet for $15, this so rejected by the store.
Ken is incorrect – no obligation to sell for $15.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Note that these cases do not cover all topics that will be examined. Brendan"s bikez is a shop run by brendan that sells bicycles. Peter wants to buy a bicycle for mountain biking. He visits brendan"s bikez, and buys a mountain bike that costs ,000, the most expensive mountain bike sold in brendan"s shop. When finalising their transaction, the shop assistant gives peter a sheet of paper and tells him to read it and then sign it, which peter does. Brendan"s bikez pty ltd is not liable for any loss or damage howsoever caused, through the use of a bicycle or bicycle accessory purchased. This includes, but is not limited to, defects in the gears, brakes, pedals or frame". The first time peter uses the bike, a crack in the carbon fibre of the frame causes the bike to break and peter to fall off.
