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Business Law

Task 1: Report Application of the Main Principles Affecting the Legal Relationship between Organizations and Consumers

Introduction

Case Study

Ben’s car was old and the costs of repairs were increasing which is when Ben decided to buy a new car. In a magazine he saw an advertisement of a Blue Passat Model 1.8, according to the advertisement it was 2 years old and had only 1 owner. It also had 6 CD changers alloyed weeks and had driven for 18500 miles. The sale price was only GBP 10,000. The next day, Ban visited the car dealer but was informed that the car was in a showroom which was 80 miles away and Ben had to pay a non-refundable deposit of GBP 150 to show his seriousness to buy the car. Ben deposited the money and the next day when the car arrived Ben bought the car. The car dealers delivered it the next day to Ben’s house. On the first weekend Ben took his family out in the new car but the speed was blocked. The service history of the car showed that the car had two owners and not one. The car dealers refused to take the car back quoting their clause 9 which claimed that they did not accept responsibility for the quality of the car and the advertisement of the car once it was sold. It was the responsibility of the buyer to check the car out before paying.

The two laws that would apply in this case are the Sale of Goods Act of 1979 and the Contract Law Section 2(1) of the sale of Goods Act of 1979 would apply in this case.

According to the Act there are 3 primary requirements for a relationship to be developed between a consumer and a seller. These are

According to Mark, (2015) the money considerations of the Act refers to any transaction that takes place where the buyer pays money for a product and the ownership changes immediately on the completion of the financial transaction.

The second is there has to be an agreement to buy something and sell something in this case the product in question is the car that has been mentioned above in the case study.

The third is the transfer of ownership when on the payment of the money the ownership of the product will be transferred to the buyer.

Ben can seek legal assistance from Section 12 of the Act which explains the implied terms of the Act of 1979 which is that the buyer will pay for the goods which have been identified and the condition of the goods when sold will be in the condition as advertised (Case Brief, 2017).

The Contract Law states when an agreement is made between 2 parties a contract has been made. A contract in this case is legally binding where the Auto dealer sold the car and got Ben to sign it which included the clause 9 that has been mentioned above. This agreement to buy and sell between Ben and the Auto dealer is enforceable by law. It includes all the body of laws that apply to the contracting parties and which all parties are under obligation to fulfil. When the auto dealer advertised one previous owner but the history showed 2 previous owners this is misleading the customers for profit and amounts to cheating the customer. Therefore even if the Auto dealers have refused to  take the car back the can be made to take it back, replace the car or provide a refund to Ben for misrepresenting the quality and the previous ownership of the car (In Brief, 2017).

In Rowland V Divall, (1923) a person bought a car from a seller painted it and sold it to a customer in the showroom. The police impounded the car from the new owner saying it was stolen. The showroom owner returned the money to the buyer as he did not know it was stolen. The seller breached the contractual agreements when accepting money as a payment this allows the buyer to reject the goods at a later date especially if the goods have been misrepresented, this can be used not only as a breach of warranty for the car but also a breach of the product condition (E Law Resources, 2017).

Ben is entitled to get his money back even if the car is not exchanged by the auto dealer.

The second case that confirms that Ben is entitled to get his money back and can enforce the sale agreement legally is the case of Microbeads v Vinhurst Road Markings 1975. The claimant bought some road markings machines from the seller who is also the defendant in the case. According to Mendes, (2017) once the purchase was made a third party was given the patent right of the machines. This meant that the buyer could not use the machines unless he was granted a license to do so by the third party. Even though there was no violation under section 12(1) of the sale of Goods Act there was a violation of section 12(2) of the Act since the buyer could not enjoy the goods that he had bought. Ben would also able to use this to either get a refund or to get another car in exchange.

Conclusion

Having gone through the case of Ben’s experience under the Contract Law and the Sale of Goods Law section (1) and (2) Ben can seek redressal from the courts. Ben has a good case because clause 9 in a sale agreement would only be placed when the auto dealer knowingly misrepresents the quality of the car to sell it knowing that the buyer will return for a replacement or to get their money back for being cheated though advertisements.

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