management & legal implications of ecommerce revision

35
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

Upload: evelyn-wagner

Post on 26-Mar-2015

221 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Revision

Page 2: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Acceptance Final & Unqualified Communication of acceptance Postal Rule

Page 3: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Consideration What is it? Privity of Contract Value of consideration Past Consideration Part Payment of a debt Promise to perform an existing contract

Certainty Courts will uphold a bargain if possible

Page 4: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms of the Contract

Page 5: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

What are the Terms Terms can be

Express In writing Oral Partly in writing and partly oral

Implied By the Courts By legislation

Page 6: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Express Terms The terms of the contract are ascertained by

examining the evidence Not all pre-contractual statements become

terms of the contract

Page 7: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Express Terms (cont.) Meaning of the terms may not be clear Where the parties have used language that is

incapable of any precise meaning the contract may be void for uncertainty

It is not the role of the Court to make a bargain for people

However, the Courts are reluctant to destroy a bargain

Page 8: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Pre-Contract Representations An oral statement can be a term Only promissory statements become terms All other statements are mere representations A statement does not have to be in the form of a

promise to be promissory Remedies

Term of contract – Remedy for breach of contract Representation – law of misrepresentation Mere puff – no remedy

Page 9: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Reasonable Bystander Test Which statements and representations would

a reasonable bystander, aware of the circumstances of the case, regard as promissory?

The test is objective Parties actual intention is irrelevant

Page 10: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Reasonable Bystander Test (cont) Guidelines

Was the representation included in a written document

When, in the negotiations, was the representation made

Did the representation sound promissory How objectively important is the representation to

the whole deal Did either party have special knowledge about the

subject matter of the representation

Page 11: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Was There a Written Document? If the statement was included in a document drawn

up by the parties then this is good evidence that the parties regarded the statement as sufficiently important to be a term

Alternatively, if it is left out, that indicates that the parties did not intend it to be a term. State Rail Authority of NSW v Heath Outdoor Pty

Ltd (S&OR p131) This is not conclusive of itself, it is merely one matter

to be considered

Page 12: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

When was the statement made? How much time elapsed between the

representation and the making of the contract?

Statements made only once early in negotiations are less likely to become terms. Van Den Esschert v Chappel (S&OR p132)

Page 13: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

How Important was the Statement Must be judged in the context of the

negotiations Van Den Esschert v Chappel (S&OR p132) Hospital Products v United States Surgical

(S&OR p134)What words were used The more precise the language, the more

likely it is a term Ross v Allis-Chalmers Australia (S&OR

p133)

Page 14: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Did a Party have Special Knowledge? Did one party rely on the other’s expertise or

special knowledge rather than form its own judgement Oscar Chess v William (S&OR p130) Esso Petroleum v Mardon (S&OR p134)

Page 15: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Parol Evidence Rule Courts presume that written formal contracts

that appear to be a complete record of the agreement, contain the whole agreement

Courts will not let a party ‘subtract from, add to or contradict the language of the written agreement’

Page 16: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms implied by the Courts

Implied as a matter of law Implied as a matter of fact

Past DealingsBusiness efficacyTrade Custom

Implied Terms

Terms implied by Statute

Page 17: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied by the Courts Cannot conflict with express terms Must not be unreasonable or unjust in the

circumstances Implied as a matter of law

Common situations which are so settled that terms “go without saying”

Implied as a matter of fact Arise out of the particular facts of the case

Page 18: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied as a Matter of Law Professionals and Clients

Professional must use reasonable care and skill

Service Contracts Provider must take reasonable care and skill in

providing the service Service must be reasonably fit for the purpose for

which it was acquired Costa Vraca v Berrigan Weed & Pest Control (S&O

p159)

Page 19: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied as a Matter of Law (cont.) Work and Materials

Contractor must use reasonable care Services must be fit for the purpose for which

they were acquired Materials must be of good quality Reg Glass v Rivers Locking Systems (S&O

p158) Helicopter Sales v Rotor Work (S&O p158)

Page 20: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied as a Matter of Law (cont.) Hire Contracts

Goods are reasonably fit for the purpose for which they are hired

Landlord & Tenant Landlord must give the tenant ‘quiet

enjoyment’ of the premise Tenant must

Pay rent Act in “tenant-like” manner

Page 21: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied as a Matter of Law (cont.) Employment Contracts

Employer must Provide a safe system of work Not require employee to do an unlawful act

Employee must: Obey reasonable instructions Use reasonable level of skill and competence Act in good faith to employer Keep employer’s trade secrets confidential

Page 22: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Terms Implied as a Matter of Fact Past dealings Custom or trade usage To make the contract effective

Page 23: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Past Dealings Term is clearly identifiable Previous dealings are numerous and consistent Present dealing fits into the course of dealing No conflict between implied term and an express

term Henry Kendall v William Lillico (S&O p181)

Page 24: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Custom or Trade Usage Can state term with precision Custom is so well known & widespread that all

contracts can be said to have the term Custom is reasonable No conflict with an express term British Crane Hire v Ipswich Plant Hire (S&O

p161)

Page 25: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

To Make a Contract Effective Term is capable of clear and precise expression The term is necessary to make the contract

effective not just reasonable The term is obvious (“officious bystander test”) The term is fair & equitable to both parties No conflict with an express term The Moorcock (S&O p162) Codelfa Constructions v State Rail Authority

(S&O p163)

Page 26: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Exemption Clauses A clause that limits or excludes the

consequences of a breach of a party’s obligations

Courts are biased against them Bias is less noticeable in commercial

contracts Courts adopt a 2 step process

Has the exemption clause become a term of the contract?

If so, does it cover the breach in question?

Page 27: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Is It a term of the contract? Essentially the same test as for all terms An exclusion clause cannot be incorporated after the

contract has been made (e.g. parking ticket) Past dealings may imply an exemption clause but the

Courts are reluctant to do this Signed documents will usually be binding even if the

party was unaware of the term unless Signed document could not reasonably be

regarded as likely to contain contractual terms Estoppel exists Exemption clause has been misrepresented See Curtis v Chemical Cleaning Co (S&OR p142)

Page 28: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Is It a term of the contract? Unsigned exemption clauses will be binding if

The innocent party was aware of it; or reasonable notice of it has been given to

the innocent party

before the contract is made.

Page 29: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

What is reasonable notice (cont) What is reasonable notice depends on:

The nature of the document; The nature of the transaction; and The nature of the exemption clause.

Would it be reasonable to expect the document to contain an exemption clause (e.g. a receipt)

Page 30: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

What is reasonable notice Is the transaction one where you would

expect an exemption clause to exist The wider the exemption the greater the

steps to be taken to bring it to the attention of the other party

Cases Thornton v Shoe Lane Parking (p144) Parker v South Eastern Railway (p126) Oceanic Sun Line Special Shipping v Fay (p127) DJ Hill & Co v Walter H Wright Pty Ltd (p124)

Page 31: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Does the Clause Cover the Breach? Courts will examine the clause carefully to determine

its effect and limit its scope where possible Generally, the Courts will give effect to the parties

intentions as evidenced by the natural and ordinary meaning of the words

There are 3 rules that courts use to limit exemption clauses: The Contra Preferendum rule Negligence Clauses The Four Corners Presumption

Page 32: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Contra Preferendum Rule Any ambiguities in the exemption clause will

be construed against the party seeking to rely on the clause Andrews Bros v Singer Car Co (S&OR

p145) Alex Kay v General Motors Acceptance

Corp & Hartford Fire Insurance (S&OR p145)

Page 33: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

The Negligence Rule Liability for negligence may be expressly or impliedly

excluded but if the words could reasonably be applied to protect against some ground of liability other than negligence, then liability for negligence will not be excluded White v John Warick & Co (S&OR p146)

To exclude liability for negligence, clear words are required Tech Pacific v Air Pacific (S&OR p146)

Page 34: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

The 4 Corners Presumption The exemption clause will only cover matters within

the 4 corners of the contract Whether an event falls outside the contract depends

on the reasonable person test – would a reasonable person aware of the terms of the contract conclude that the parties must have had the relevant event in mind in drawing up the contract.

Sydney Corporation v West (S&OR p148) TNT v May & Baker (S&OR p149) Darlington Futures v Delco Australia (S&OR p149)

Page 35: MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision

MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE

Statutory Reforms In many cases, it is Illegal to attempt to

exclude terms implied by statute e.g. Trade Practices Act

Attempting to exclude statutory liability (where not permitted) may be misleading and deceptive conduct contrary to section 51 of the Trade Practices Act