Posted: January 25th, 2017
Vanessa is looking for her first car. In the local paper she sees a full-page colour advertisement for Nikhil’s Car Sales Pty Ltd: Used car sale. Unbeatable offers on 3-year old models. Low kilometers. 12-month warranty. The featured vehicles include 3 model Mazda 2s priced at $9,999 drive away. On Saturday morning she goes to take a look. She takes a liking to the yellow Mazda 2, and has a good look around the outside and inside. She notes with satisfaction that the odometer shows 75,000. The salesman tells her: “Personally, I think this one is the best of the lot.” Vanessa asks Nikhil about previous ownership of the car and Nikhil replies: “The car had only one previous owner.” Vanessa replies that she would like to buy it, but the best she can do is $9,500 cash. He replies: “Alright. Come inside.” In the office Nikhil prepares a sale document with a description of the vehicle and a cash sale at $9,500 and gives a copy to Vanessa, which she reads. They agree that Vanessa will return with payment within 7 days. There is no mention of warranty. Vanessa signs the sales document. Next Wednesday, having visited her bank, Vanessa returns with a bank cheque for $9,500 and collects her new car. There is a zipper case on the driver’s seat containing the handbook and previous service record, which she puts in the boot. Three months later Vanessa finds that her car is slipping out of gear. Next morning she drops it off with Max, her mechanic. Max calls her that afternoon. The automatic clutch of the Mazda 2 is badly worn and needs replacing. The total cost for the work is $2,500. From the handbook and service details Max discovered that the previous owner was a company, and the Mazda 2 was a fleet car. At the time of the sale it had actually covered 175,000 kilometres. Problem-Based Questions QUESTION 1 Is there a contract between Vanessa and Nikhil’s Car Sales Pty Ltd? Refer to relevant case law and principles in answering this question. [5 marks]QUESTION 2Vanessa tells you that had she known about the true condition of the car, she never would have bought the car, and asks you to explain the legal situation to her. What rights does Vanessa have under the common law? Refer to any applicable case law and principles in answering this question. What remedies can Vanessa obtain under the common law? [7 marks] QUESTION 3Does Vanessa have any rights under the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Schedule 2)? Discuss any applicable legislative provisions and relevant case law. What remedies can Vanessa obtain under the Australian Consumer law?
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