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Commercisl Law Study Essay

3008 words - 13 pages

Assignment Task 1:

The Advertisement - Term of contract, Misrepresentation or Mere Opinion?

The initial issue is to classify the University of Kew’s advertisement that induced Brad to enter into a contract. If it constitutes a term of the contract, then contractual remedies would be awarded if there was a breach[1]. If it is a misrepresentation, then Brad would be provided with remedies for common law misrepresentation. However, if it is a mere statement of opinion or a prediction about the future, then it would have no legal consequence[2].

In JJJ Savage & Sons Pty Ltd v Blakney[3], the purchaser was denied damages, even when he was induced to enter into the contract by a ...view middle of the document...

In order to determine if the conduct is misleading or deceiving, the court must first be satisfied that the University of Kew is a corporation and that the conduct was made in trade or commerce. Given that the university has been incorporated as a separate legal entity and exists independently from its members, it is clearly a corporation. The court will then consider if the conduct relates to dealing of a trading or commercial nature[9]. Given that the university is providing a service that was provided to and paid by Brad, this requirement would be satisfied.

Brad signed up with the Doctor of Accountancy course at the University of Kew on the basis of their newspaper advertisement. As the advertisement is aimed at a class of persons rather than a specific individual, the relevant test therefore is whether the ordinary or reasonable member of that class would be or likely to be misled or deceived by the advertisement[10]. An ordinary, reasonable person wishing to attain the Certified Practising Accountant (CPA) or a Chartered Accountant (CA) accreditation will be excited at the claims of the advertisement of becoming a CPA/CA in just two years of study when it usually takes many years of work and study. Since the University of Kew is an established institution, it is likely that people who have read the advertisement may be led into thinking that completing the course will allow them to become a CPA/CA.

Any conduct that is capable of conveying a false impression[11] or leading a person into error[12] is capable of being misleading or deceptive. There is no need to prove intention to mislead[13]. The court will use an objective test to decide if the conduct is misleading or deceptive. The test involves asking whether the statement “would lead an ordinary member of the public to be influenced by the statement into error”. The advertisement claims that a person can become a CPA/CA with just two years of study with the University of Kew. This is not true as the course has not yet been approved by the relevant accreditation bodies. As such, the advertisement is likely to mislead as it conveys a false impression and is capable of leading a reasonable person into error.

S4[14] states that a corporation which makes a representation with respect to any future matter without any reasonable grounds, is taken to be misleading. With the status of the accreditation application still pending, the university has no reasonable grounds to claim that potential students would be able to become a CPA/CA through its two-year course. Without the reasonable grounds for its representation, the advertisement can be taken to be misleading.

While the pending status of the accreditation application was brought up in the advertisement, it was not disclosed within the main body of the advertisement but through an asterisk at the bottom. Generally, a disclaimer or an asterisk is not sufficient to avoid liability[15] under s18. However, the presence of the...

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