Consumer Law
Vitiating Factors of the Contract
A valid contract, such as the one between Eva and Winnie may be avoided due to the presence of possible vitiating factors in the contract. Most of these factors involve some unfair and unjust means.
Misleading or Deceptive Conduct
The contract between Eva and Winnie had various issues of misrepresentation from both parties. There was misrepresentation through silence when Winnie failed to disclose that besides holding a wedding, the wedding would also be showcasing her wedding dresses. On Eva’s side, she failed to disclose that the Troll was her son’s band, which played rock and metal music and not romantic wedding songs. Noteworthy, in misrepresentation, the party that misrepresents always stands to gain from this act. For instance, it is likely that Winnie would have been charged more fees if she had disclosed that her wedding would also be displaying her dresses. Therefore, by misrepresentation through silence, she stood to benefit. On Eva’s side, if she had disclosed that her son’s band does not play romantic wedding songs, it would have been denied the opportunity to perform in the wedding.
In a case of Caffey v Leatt-Hayter (No.3) (2013), the defendant misrepresented facts in the pre-contractual negotiations. In this case, Mrs. Leatt-Hayter (Vendor) entered into a contract with the Caffey’s (Purchasers) for $1.9 million. In the advertisement of the business, the vendor had said that the Australian government would be issuing more funds to libraries due to the increase in population. Moreover, the business was in good condition and its main competitor Adelaide Library Service (ALS) was having operational difficulties. However, court findings disclosed that the Vendor was aware of the government’s plan to reduce funding to libraries, which would have resulted in a reduction in the price of the library business. In addition, ALS was performing much better than Mrs. Leatt-Hayter library. Specifically, the failure to disclose all relevant information such as the reduction in funding made the vendors lose the case. Similarly, Eva and Winnie had issues with misrepresentation through non-disclosure of important information.
Unfair Terms of Contract
There were various clauses in the contract between Eva and Winnie that resulted in unfair terms of the contract. In particular, ERF used statements such as:

  • In small writing at the end of the contract: “Substitutes may be used at the hotel’s discretion.” (For the “Asian Finger Feast.”){ hotel’s discretion}
  • In small writing at the end of the contract: “Tropical Punch is a secret recipe and its contents cannot be disclosed.” {secrete receipt}
  • ERH is not liable for any damage or harm caused, even by its own negligence. {not liable}

In the Australian Consumer Law, section 23 provides that a contract is unfair if  the terms used in it are unfair, a contract is a standard form, the contract can continue to be binding without the use of the unfair terms, and the agreement is a consumer contract. Section 24 emboldens this law by giving an in-depth interpretation of the meaning of the words unfair. In this case, an unfair consumer contract refers to an agreement that results in a significant imbalance between the parties, it is detrimental to one party if it is applied, and it is not necessary for the agreement.
The terms used by ERF are unfair since they give the hotel the right to adjust the customer’s menu, and contract without consulting him/her. Further, they also limit their liability, notwithstanding their unlawful acts. In a case of ACCC v ByteCard Pty Limited (2013), the court ruled that ByteCard Pty Limited had used unfair terms of contract with its customers. In this case, ByteCard Pty Limited said that it had authority to unilaterally vary its prices without giving customers the chance to terminate their contracts. Additionally, customers were to indemnify ByteCard in any circumstances even where they had not violated the original contract but the liability was due to ByteCard’s breach of the contract. ByteCard also had the authority to unilaterally terminate the contract with or without cause. Similarly, the right to alter the menu that the client had ordered and lack of any liability on the part of ERF for any wrong doing was the use of unfair terms in the contract. Further, the statement that the contents of the “Tropical Punch” could not be disclosed was unfair since the customer was left unaware of what they were buying.
Illegal Contract
The contract between Eva and Winnie had parts that made it illegal. Specifically, the clause that stated ERF could not be held liable for any liabilities, even those are due to its own negligence. According to the Australian consumer law, all suppliers must guarantee the quality of their services and goods. In addition, this statement by itself was an unfair term in the contract. Specifically, this is a case of statutory illegality; therefore, the contract is void. Nonetheless, Winnie can still file a claim to the contract due to ignorance on her part. Basically, if a contract is ex facie lawful and legal as performed, where one party is ignorant of the illegality, that party can be able to claim a remedy for his/her loss. In the case of ACCC v ByteCard Pty Limited (2013), the use of unfair terms made the contract illegal. However, since the other sections were okay, the company had to remove this portion. In addition, it paid a fine for using the unfair terms.
The contract between Winnie and Eva did not have an element of mistake. In general, mistakes occur when one or both parties are unable to clearly understand the terms of the contract. Mistakes are usually classified as common mistakes, mutual mistakes, unilateral mistakes, and non est factum. In general, parties to a contract are bound by what they agree, however, under non est factum rule, if an individual can prove that he/she  did not understand the contents of the document that he/she signed, he may not be bound by it. In this regard, an individual may prove that he/she was a minor or mentally incapacitated at the time he signed the document.
Remedies and Damages Available to Winnie
Misleading and Deceptive Conduct
Eva should compensate Winnie for the losses that she suffered by providing her with an incompetent music band. Although Winnie had misrepresented her presentation to Eva, Eva did not get any loss. Her inability to provide an attractive wedding venue for Winnie resulted in the latter getting huge losses. As a result, she cannot claim any damages due to Winnie’s misrepresentation. On the contrary, the provision of an incompetent band made Winnie’s wedding not to be attractive. Primarily, it damaged the most important element of the contract, which was organizing a colorful wedding. In as much as good songs would have enabled Winnie to showcase her clothes, this would have been an overriding event of the wedding. Therefore, ERF is bound to compensate for the provision of a poor quality band while it was fully aware that Winnie wanted a band that could sing in a wedding. Nonetheless, ERF would not compensate Winnie for the losses that her clothes business suffered due to the event. On her part, Winnie had failed to disclose this information. Therefore, it was not part of the contract. In a case of Campbell v Lane (No 2) (2013), the court found the defendant guilty when he sold the plaintiff a horse that could not perform in shows while he knew the intention of the buyer was to use the horse in these events. In its ruling, the judges made the defendant pay the plaintiff for the losses he had suffered.
Unfair Terms and Illegality of the Contract
Despite the presence of unfair terms of the contract that exonerate ERF from liability, the hotel would still be bound to pay Winnie for the damages. According to the Australian law, all suppliers have a duty of providing a warranty of the condition of goods and services that they offer. Therefore, the clause that the hotel is not liable for any loss is illegal. In a case settled in July 2013, Hewlett-Packard, a computer hardware company, was ordered by the Federal Court to pay $3 million as a civil pecuniary penalty since it had made false and misleading representations to its consumers and retailers concerning consumer guarantee rights (ACCC v Hewlett-Packard, 2013). Further, the Australian Consumer Law required suppliers to provide high quality goods o their customer. As ruled in the case between Australian Competition and Consumer Commission (ACCC) v Reckitt Benckiser (Australia) Pty Ltd (Reckitt Benckiser), the court said that all suppliers have a duty of selling goods that are of acceptable quality.
Further, the Australian law protects consumers against unfair terms used in contracts. In particular, the use of unfair terms makes a contract void. However, since Winnie was unaware of the illegality caused by the use of these terms, she is not bound by them. In this case, the court will expunge the unfair terms of the contract. In a case of ACCC v Bytecard Pty Limited (2013), the court fined Bytecard Pty Limited for using unfair terms of trade. By this act, it is clear that ERF would have to compensate Winnie for the poor quality of food, drinks, and overall service that they offered on her wedding day.
Works Cited
ACCC v Bytecard Pty Limited (Federal Court, 24 July 2013, VID301/2013).
ACCC v Hewlett-Packard [2013] FCA 653.
Caffey v Leatt-Hayter [No.3] [2013] WASC 348.
Campbell v Lane (No 2) [2013] QCATA 307.