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WA Buyer Demanding Refund Over Alleged Breach of Contract - Thoughts?

Discussion in 'Australian Consumer Law Forum' started by Belinda _S, 8 October 2015.

  1. Belinda _S

    Belinda _S Member

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    Hello!

    I have a predicament. There is a situation where my mother-in-law has received a letter from a client, apparently written under the guidance of her lawyer demanding a refund. The story is - mother-in-law (MIL) sells horse floats that are custom made in China, then shipped to WA where my MIL picks them up from the dock and delivers them/has then picked up by clients. Clients pay in full when or shortly after they order. The order to China is not put through until payment.

    My MIL does not have a contract (I've told her she needs to get one) but there is offer, acceptance and consideration here. She has a signed order form from the 2nd of June with specifications for the clients float and payment. Payment was not made until the 16th June.

    My MIL send a notice to the client letting her know that the float was ready to ship in China and may take a little longer than estimated due to an explosion at the port in China. This notice was given before being emailed back with the demand for refund from the client. The client asked for a copy of the order for her 'accountant' befor emailing back her demand.

    The client has emailed asking for a refund based not be allegation that my mother-in-law told her it would be ready by 12-14 weeks and the float is still not here. She says she relied on this as she required the float for shows in September/October and that she made this clear to my MIL and that she should know this is an important time of year being a 'horse person'. This is not not the written document.

    My MIL says she never made such a statement of guarantee nor did the client communicate about needing it by a certain date or for certain shows. MIL says she said it takes approximately 12-14 weeks to build and then needs to be shipped from China. She also told her that this may be longer due to build or shipping problems and quite often it is longer. My MIL says different horse shows are all throughout the year and no set months are more important than others overall and she could not have been expected to know her needs. She received the clients letter of demand on the 1st October in which she quoted she did not receive the float by the 2nd September as agreed.

    The client has demanded a full refund plus the costs of any fees for the finance she took for the payment of the float, including cancellation fees (in the range of 3k).

    We want to know where my MIL stands.

    As my MIL notified the client about the float being ready to ship, would this fall under specified goods in a deliverable state. Therefore the property in the float has passed to the client already? Does my MIL have the right to resell?

    As the float is custom made with certain specifications it will likely need to be sold under price as it is hard to find sellers wanting the exact same specifications. Will the client need to pay damages for the difference?
    Under Australian Consumer Law was there a breach of contract by my MIL with he client refusing to accept the float and unlawfully terminating the contract?

    The client is threatening to sue if she does not receive a refund with all fees paid.

    Thank you for your time
     
  2. Belinda _S

    Belinda _S Member

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    Sorry I posted before I had a chance to finish. I am really interested in this as I am a law student so would really like to understand the legalities behind this. It seems to me that the client doesn't have much of a case. The term she is saying my MIL breached is not a guarantee? Not promissory? It was made clear by my MIL that it was an approximation and can greatly vary depending on factors. Can the client claim that it was promissory and that she relied on it? Notwithstanding the fact that the conversation was verbal and not documented.
     

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