BULAW1502 Fundamentals of Law Assignment Help

Question 1 (Contract Law) 

On 1 October, Buyer saw a courier van parked in a carpark with a FOR SALE sign that included a telephone number and a price of "$25,000 cash." That night, Buyer called Seller. Buyer explained that he would have to borrow the money to purchase the vehicle but could get it ne. week. Seller provided his address to Buyer and told Buyer, "If you want the van, mail me a cheque for $5000 today. Pay the balance by 1 November." Later that same day, Buyer mailed Seller a $5000 cheque. 

The next night, at Buyer's 18th birthday party, Buyer discussed the deal with Investor. After buying the van. Buyer planned to start a document courier service. Since mailing Seller the $5000 cheque yesterday, Buyer had spent $1200 on business cards, flyers and a mobile phone. Buyer projected a profit of $50,000 in the first year. Investor was impressed with Buyer's plans and agreed to loan Buyer $20,000 to buy the van. 

On 25 October, Buyer called Seller to pick up the van. Seller refused and said someone had offered him $35,000 for the van. Seller had not cashed Buyer's cheque as yet. Seller offered to deposit the cheque and give him the van if Buyer would pay Seller $20,000 now plus $400 a month for 25 months. Buyer laughed and said, "Yeah, right" But without a van, Buyer would not be able to start his courier service. 

Answer the following questions in detail, providing reasons for your answers. Refer to relevant case law to support your arguments: 

1. What are Buyer's potential claims against Seller? What are Seller's potential is likely to prevail?

2. Assume Buyer preva: s IN awsuit against Seller. What remedy(s) is Buyer likel to receive from the court? 

Question 1

Issue

The buyer happens to see a van for sale at the rate of $25000 and as per the agreed terms, the buyer pays $5000 cheque on the same day and decides to pay the rest by 1 November. While the buyer has a planned to start a document courier service and has taken an investment of $20000 from his investor and also spent $1200 towards corporate stationery, he reaches back to the seller even before the agreed deadline of 1 November.

The issue here is the seller has denied the issual of van stating that another party has agreed to pay $10000 higher than the present buyer. Hence, the seller has changed the terms insisting the buyer to settle $20000 and then pay a monthly amount of $400 for another 25 months.

While the buyer has already initiated things as per the verbal agreement initially made, the seller has violated the agreed terms and confirmed a breach of good faith. Though the seller has not cashed the cheque, it is still unlawful to change the terms and cause loss to the buyer who has trusted the seller and acted as per the terms of contract.

The other issue to be addressed is the remedy that buyer will receive from court if he continues in a lawsuit against the seller.

Rule

There are 2 rules applicable in this case. One is the Australian contracts law and the other is Goods Act 1958.  According to the contracts law of Australia, two parties enter into mutually agreed terms and conditions either by oral format or written format. In this case, one party offers and the other accepts (Consult Australia, 2012). When either of the parties tries to violate an agreed condition, it is termed as breach and punishable by the law.

According to the Goods Act 1958, two parties enter into a contract where one of them sells a good and the other purchases the same. The formalities are either drafted in written format or conveyed in oral format and the valuation price is mentioned in advance.

Application

Applying both the rules mentioned above, it is clear that the contract occurs between both the parties orally and the seller receives a cheque to confirm the deal. Now, both the parties are stipulated to complete the transaction by November 1. The token advance of $5000 is meant to confirm that the vehicle will be owned by buyer upon settlement of balance amount.

The seller is liable to transfer the possession to the buyer when the complete amount is settled and any damages to the good shall be charged or repaired by the seller and the seller is responsible to bear the total costs. The sub sale or pledge is unlawful as per section 51 of Goods Act 1958. If the buyer has not paid the entire amount, it is the sole responsibility of the seller to issue a notice to the buyer and then take a decision. Receiving a token advance and transferring the rights of the good to another person due to a better offer is absolutely unethical.

In this case, the buyer has been legitimate throughout the transaction. Right from the token advance as per the agreement till the settlement of pending amount within the stipulated time, the seller has been prompt. The only problem here is that the buyer has not raised any query to the seller on why the initial amount was not cashed out. If that was asked out of suspicion, the buyer would have planned for alternatives.

Since the seller has changed the terms and conditions based on his own comfort without understanding the impact on the buyer, it is evident that the seller has to face the consequences. There are no faults identified on the buyer's side as he has been clear throughout.

Conclusion

To conclude, the seller is punishable under law.

As per sections 55 and 57, the buyer has all the necessary remedies for breach of warranty and non-delivery.

The Goods Act 1958 states that the seller has to compensate all the damages and estimated loss caused to the buyer due to breach of agreed conditions (Australian Government, 2011). Further, the court shall also punish the seller for wilfully reselling the good which is already booked by the seller with a token advance. The non-delivery of the vehicle will affect his business and the buyer shall also be responsible to answer his investor.

To sum up, seller compensates for all the losses caused to the buyer. On the other hand, a lawsuit filed between the seller and buyer would help the latter to seek justice and compensation for all the losses incurred during this transaction.

Question 2

Chattel Mortgage

When a purchaser tries to borrow amount from the lender towards the movable personal property purchase, it is called a chattel mortgage. In this case, the mortgage is applied though the chattel remains in the name of the purchaser. This is identified as a premium option available for the ABN holders and business owners who have already registered GST on cash basis. This is perhaps the best car finance option available to the business owner. The chattel is registered in the business activity statement as per Australian Taxation Office conditions.

Perfection

The extra steps that are required to secure interest and make it effective denote perfection. In other words, the sole idea of perfection is to apply security of a party against third parties like liquidator. As per the common law in the case of Dearle V Hall, security interests belonging to the same asset are ordered and perfection is offered. This is common among security interests that have proprietary support like a mortgage.

Fixture

The attachment of a fixed property to a real property is called fixture whereas the one not attached to a real property is chattel. Personal property security act is the law that governs the security of real properties owned by the individuals (FindLaw, 2019). Australian Provincial Assurance v Coroneo is one example where it was difficult for the Supreme Court of New South Wales to decide if the property is chattel or fixture. The concepts of renting and property leasing fall under this category.

Torrens

Initiated after Robert Richard Torrens, the purpose of Torrens title system is to record and register the ownership and interest in a systematic way. Accuracy, brief documents with detailed information and government guarantee are the three principles based on which the titling system works (Victoria Government, 2019). This is supposed to be a central registry and under the general law title system, it eliminates the need of a property owner to create multiple documents to confirm the authority. Even when the property is transferred or mortgaged, the chain still continues without requiring the property owner to create separate proofs or break the chain of records. This portfolio has proved to be extremely useful to the government.

Leasehold

Any land holding that is found to be leased to either a company or an individual as per the state law is called the leasehold land. Over two-third portions of state owned lands located in Northern Australia are said to be called the pastoral leasehold (Australian Government, 2018). The lessee gains the right to occupy the land exclusively during the period on certain conditions. It could be either term lease or freeholding lease or perpetual lease and the tenure is upto the owner.

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