2105AFE-Terminate Of The Contract Essay

Question:

After a few months of overindulgence, Karen decides that it’s time to get fit. She searches for local gyms on the internet and comes across a nearby gym called “Gym & Tonic” which is owned and run by Grace. An advertisement on the Gym & Tonic website says “On sale for this month only! Monthly gym fee reduced from $60 per month to only $30 per month! Unlimited access!”. The advertisement shows members of the gym using all different types of gym equipment. The following day she goes to Gym & Tonic and tells the receptionist Jack that she wants to become a member of the Gym. Jack shows Karen the Gym’s standard form contract. He asks Karen for her address, date of birth, contact details and bank account details and he inserts this information into the contract. Karen tells Jack that she would like to sign up for 12 months. Karen signs the contract and Jack gives her a membership card.
Karen returns the next day, eager to start her first gym session. She shows her membership card to Grace, the owner, who is working at the reception desk, and asks Grace to show her where the treadmills are. Grace explains that the $30 membership fee only includes the weight equipment, and that she must pay an extra $20 per month if she wants to use the cardio equipment. Karen becomes angry and says that the advertisement on the website said “unlimited access” so she should be allowed to use all the equipment. Grace explains that “unlimited access” means unlimited visits to the gym each month, not
unlimited access to all the equipment. Karen tells Grace that the advertisement created the impression that she could use all of the equipment, and that the only reason she signed up was because she wanted to use the cardio equipment. Karen tells Grace that she wants to terminate her gym membership immediately, however Grace draws Karen’s attention to Clause 5 of the membership contract that Karen signed the previous day which says:
“The Gym may terminate the contract at any time, without notice and without penalty. If the Member wishes to terminate the contract for any reason, the Member must pay a $100 early termination fee to the Gym”.
Karen tells Grace that the gym is a complete rip off and that she’s never coming back. As she is walking to her car, she runs into her friend Will who works at the restaurant next door to the gym. Karen tells Will what happened at the Gym and Will tells her that he’s heard a few restaurant customers complain about the same thing. He also tells her that the gym has never offered monthly memberships for $60 per month. The usual cost is $40 per month. Karen comes to you for advice. She would like to know if she can terminate the contract with Gym & Tonic, and if she is liable to pay the $100 fee. As part of your answer, you should discuss whether Gym & Tonic has breached any of the provisions of the Australian Consumer Law (Schedule 2 Competition and Consumer Act 2010 (Cth)) and any remedies available to Karen. Also discuss how the common law applies to this scenario. Do not discuss any liability under contract law.
Required
1.In the Mabo case, native title was being claimed over a particular island. What is the name of the island? What is the name of the Aboriginal peoples who occupy that island?
2.In the Mabo case, the claimants were successful with their claim. What were the claimants entitled to do with the land? According to Justice Brennan’s judgement in the Mabo case, when will the foundation of native title have disappeared?
3.As explained by Graeme Neate, President of the National Native Title Tribunal, what is the difference between “land rights” and “native title”?
4.What was the name of the Act that was introduced after the Mabo decision? What was decided in the Wik case?
5.The Yorta Yorta people were among the first to lodge a native title claim after the Mabo decision. How much time passed between the time the claim was lodged and when the final decision was handed down? Why were they unsuccessful?

Answer:

Issue

Whether Gym & Tonic can enforce Karen to pay back the $100 cancellation fee as per the terms of the contract? Whether any provisions of the Australia Consumer Law is violated by Gym & Tonic, and if so, did Karen have any remedies available?

Law

The Australian Consumer Law has been established by the Australian government to ensure that corporations operating in the company did not violate the rights of customers and provided them high-quality products and services. In order to implement these regulations on individuals, the government has enacted the Competition and Consumer Act 2010 (Cth) which applies to all territories of Australia. Based on the guidelines of this act, the corporations are prohibited from engaging in any trade or commerce related conducted which is misleading or deceptive as given under section 18. Furthermore, the act provides that while advertising their products, the corporation should not make false claims regarding their products or services to induce customers into buying them. A company can be held liable under section 29 in case an advertisement is posted by the company which is a misleading or deceptive advertisement or likely to mislead or deceive.

In Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) HCA 54 case, the court held the company liable for violating section 18 and 29 of the act. In this case, a company advertised that it is giving ADSL2+ unlimited broadband for $29.99 monthly. A notice is also written in the advertisement in small print which provided that this offer is only available for customers who have a home line rental which costs $30 monthly. The court provided that the advertisement of the company is misleading and deceptive and imposed a penalty on the company. As per the guidelines of the common law, a contract becomes voidable which is formed based on misrepresentation, and it can be set aside. The remedies available for parties include rescission, specific performance, repudiation, damages, and injunction.

Application

Karen got the gym membership based on the advertisement of Gym & Tonic in which the company depicted that it is giving unlimited access to the entire gym for $30 rather than $60. This advertisement was false since access was only available to weight equipment and the original monthly gym membership was for $40. Gym & Tonic has breached section 18 and 29 of the Competition and Consumer Act based on which the court can impose a penalty on the company. Karen can rescind the contract since it is voidable, and she can demand damages as the remedy.

Conclusion

To conclude, Gym & Tonic cannot enforce Karen to pay $100 cancellation fee because the contract is voidable which can be set aside by Karen. Section 18 and 29 has violated by Gym & Tonic, and Karen can demand damages

Short Response Question

1.The island name is Torres Strait Island which is in Queensland, Australia and the name of aboriginal people is Torres Strait Islander.

2.Based on the judgement given in the Mabo case, the claimants receive their land rights. These rights depend on traditional laws and customs of those people who are claiming the title. The court provided these rights under the Torres Strait Islander Land Act 1991. The land rights established from the birth which include freehold and perpetual lease titles. The procedure for transferring, claiming and granting the land rights is also established by the court. Justice Brennan provided that after the abandoning of the traditional customs and laws the foundation of native titles was disappeared which happened when the British took the lands from aboriginal people

3.According to Graeme Neate, the land rights are given from the birth whereas the native titles are given by the Australian government based on the traditions and customs of aboriginal people. Land rights are considered as a birthright because aboriginal people did not sell their land, instead, they belong to the land, and they consider themselves responsible for protecting the land. For example, the land rights give the authority to aboriginal people to block mining on their lands, whereas, the native title gives them the right to negotiate.


4.The act which was introduced after the Mabo case is the Native Title Act 1993 (Cth). In Wik decision, it was held that the native titles of aboriginal people coexist with pastoral leases which prevail in case of inconsistency.

5.Twelve years passed between the claim and final decision of the native title claim of Yorta Yorta people. They were unsuccessful because their traditions and customs were lost due to the time and the High Court made it more complicated to claim for native titles by implementing strict requirements.

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